....Every year Duke collects survey data from the chief financial officers of America’s largest corporations. Among other things, they ask the CFOs to estimate returns from the Standard & Poor’s index for next year.
The researchers looked at 11,600 forecasts and found that the overall correlation between the CFOs’ estimates and the market’s actual performance was slightly less than zero. That is, the CFOs also did worse than chance. This is troubling, because unlike political pundits, CFOs often have a great deal of skin in the game—their career, yearly bonus, and sometimes even their corporation’s future is on the line. And yet, their performance is bad.
And to make matters worse, the CFOs were grossly overconfident. Specifically, the actual market’s performance fell beyond their confidence interval more than three times as much as it should have, if they were properly calibrated....
However, they may be decent bookkeepers.