The problem is that when we predict future investment returns, we often refer to events like the Great Depression and World War II, treating them as the worst-case scenarios that could occur. However, before these events occurred, there were no precedents that were equally bad. Therefore, when forecasters use the worst (or best) events from the past to predict future worst (or best) scenarios, this behavior itself goes against historical patterns. They are using historical accidents as a yardstick to measure the future.
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