(p. B1) Nearly all of us try forecasting the market as if each of the past returns of every year in history had been written on a separate slip of paper and tossed into a hat. Before we reach into the hat, we imagine which return we are most likely to pluck out. Because the long-term average annual gain is about 10%, we “anchor” on that number, then adjust it up or down a bit for our own bullishness or bearishness.
But the future isn’t a hat full of little shredded pieces of the past. It is, instead, a whirlpool of uncertainty populated by what the trader and philosopher Nassim Nicholas Taleb calls “black swans” — events that are hugely important, rare and unpredictable, and explicable only after the fact.
For the full commentary, see:
JASON ZWEIG.  “THE INTELLIGENT INVESTOR; Why Market Forecasts Keep Missing the Mark.”  Wall Street Journal  (Mon., January 24, 2009):  B1.  
The reference for Taleb’s book, is:
Taleb, Nassim Nicholas. The Black Swan: The Impact of the Highly Improbable. New York: Random House, 2007. 
A brief, idiosyncratic review of Taleb’s book, is:
Diamond, Arthur M., Jr.  “Review of:  Taleb, Nassim Nicholas. The Black Swan.”   Journal of Scientific Exploration  22, no. 3 (Fall 2008):  419-422.  
