Who is better at making predictions - the hedgehog or the fox? These two archetypes were famously examined in Isaiah Berlin's essay "The Hedgehog and the Fox," based on Archilochus's aphorism "the fox knows many things, but the hedgehog knows one big thing."
In today's lesson, Ruchir Sharma gives us a different spin on the fox and hedgehog dichotomy in looking at the shifting global economic landscape. Hedgehog forecasters tend to assume that certain trends - like rapid growth in emerging markets - will continue ad infinitum. And yet, Sharma explains the importance of being on the ground and paying attention to what the locals are doing. If they are voting with their money and taking it out of the local economy, that is an ominous sign that a hedgehog global investor is likely to miss.