As I apparently enter my second or possibly third childhood, I found myself every bit as disappointed as the thousands of local school kids who expected to spend this week sledding and building nonbinary snowpersons. But once again, teased by sophisticated computer models, satellite imagery and highly-educated meteorologists, Knoxville’s youth were forced to endure photos of their out-of-town friends and family frolicking in a rare—but widely predicted—winter wonderland.

Local meteorologists were so confident in their inaccurate forecasts that, at times, I almost thought I was listening to economists predict the stock market.

I have long joked that the best weather forecasting system is probably just to assume that tomorrow is going to look like today. Sure, I would miss the inflection points, but I would be right most of the time. Apparently, this approach—known as “persistence forecasting”—is indeed a real thing in meteorology. It is commonly used as a baseline method to benchmark more sophisticated models. And as it turns out, persistence forecasting is fairly reliable over the next hour, but trails numerical weather models by 20%-to-50% over 24 hours and beyond.

That, too, sounds a lot like economists.

Over the past 20 years, the earnings of the S&P 500 companies have grown an average of 7% annually. Last year was unusually strong, with earnings increasing 12.9%. Instead of projecting that earnings might revert back to a more normal level, the early consensus S&P 500 forecast for 2026 earnings calls for 13% growth—simply a repeat of last year’s well-above-average results.

The same pattern shows up in most finance data. Inflation? The Consumer Price Index (inflation) increased 2.7% in 2025. The consensus expert forecast for 2026 inflation is between 2.5% and 3.0%. Shocker.

Persistence forecasting is remarkably common in finance—far more so than in meteorology. This holds true for both amateurs and well educated (and compensated) professionals. We instinctively extrapolate the present, believing that whatever dominates today’s narrative will persist indefinitely. When markets are rising, we assume the reasons are durable and increases will continue. When markets are falling, we assume the causes are overwhelming and permanent. In both cases, we mistake the present for the future.

Stein’s Law (Herbert Stein) tells us that if something cannot go on forever, it will stop. Intellectually, that makes sense. But emotionally, the present always feels permanent.

Weather forecasters sometimes get it wrong, but at least they attempt to model change. In finance, what happened yesterday is often treated as the forecast.

David Moon is president of Moon Capital Management. A version of this piece originally appeared in the USA TODAY NETWORK.