In business, and in daily life, we live by predictions. Weather forecasts, predictions of mortgage rates, economic forecasts and business plans are some of the most important manifestations of our belief that trying to foretell the future is preferable to not trying at all. We assume some logic and orderliness exist.

Back in the 1990s, while awaiting an appointment with an investment client in Jakarta, Indonesia, one hot August day, a copy of The Far Eastern Economic Review from January of that year lay at hand, and the cover story, "Where to Put Your Money," was enticing. It featured the forecasts of the region's leading investment experts on stock markets, currencies, commodities, precious metals and other investments.

In nearly every area, the experts had been proven to be wrong: The markets that they had predicted would fare the best were performing the worst, and the same thing with regard to industry sectors and individual stocks. The markets, sectors and stocks that they had predicted would fare the worst were by and large doing the best. The same perverse reversals were also true in currencies, commodities and precious metals.

The nearly universal wrongness of predictions that year provoked an examination of why forecasts so substantially miss their marks. Is the future always unpredictable, or are the tools or the psychology of us humans so deficient that forecasting will always be more art than science? Should we trust predictions at all? Or should we analyze them to see what biases went into them, and correct for those biases, to the extent we can?

Wrong predictions, large and small, have plagued even the brilliant and mighty:

y Thomas Edison, the world's greatest inventor, called talking pictures "a hopeless novelty the public will not support."

y Chauncey DePeuw, head of the New York Central Railroad, advised a relative not to invest $5,000 in Ford Motor Company, "because nothing has come along to beat the horse."

y British Field Marshall Douglas Haig said in the early days of World War I that "the idea that cavalry will be replaced by these iron coaches (tanks) is absurd."

y Bela Lugosi, at the height of his fame and fortune for portraying Dracula, was offered the role of Frankenstein's monster, and turned it down because it involved no dialogue; the role was then offered to an unknown 41-year-old bit player named Boris Karloff, who became the most famous actor in horror films for decades, while Lugosi died in poverty.

Predictions most often fail because they are usually mere extrapolations of the present. They fail to incorporate the incredible dynamism of markets; they exclude the possibility of extraordinary events (which occur more often than we calculate) and they reflect our own biases and our self-reference criteria whereby we project our own tastes and circumstances on to others.

Political polling this early in the 2008 elections is an example of a forecasting minefield. Even if polls were precise (they aren't; they contain major flaws), they are largely irrelevant at this point. Superficial metoposcopy will be succeeded by reasoned analysis.

Too much has happened in past campaigns, and will happen in this one, in the last few weeks and even the last few days. Events exterior to the campaign (such as the Cuban missile crisis in 1962) or the candidates' own gaffes (such as Ford's first debate with Carter in 1976) can change the results. The next two months are like an eternity in politics, where October can be the cruelest month.

In Greek mythology, Cassandra, daughter of the last king of Troy, was endowed by the god Apollo with perfect prophetic powers. When she spurned his amorous advances, however, he ordained that her prophecies never be believed. She later died in the very fall of Troy that she had predicted.

That the sun will rise in the east and set in the west each day is one predictive certainty, but on that score President Martin Van Buren, famed for his indecisiveness, begged off an answer when baited by a critic.

Van Buren told the questioner that he didn't know because he didn't rise that early in the morning.

John Quinn, a professional investor for 40 years, and a 28-year veteran of Wall Street and Asia, is director and executive officer at National American University's Rapid City campus. Contact him at JQDrBoom@aol.com.