This has prompted me over the years to formulate some other rules I have found helpful in distinguishing between useful and useless research.

The first of these is this: "Don't rely on what anyone says they are doing. Look at what they are actually doing." Just as comment is free, but facts are sacred, so too market punditry is cheap, but actual investment decisions are the only thing that really matter. I recall a meeting of IFAs in March 2003 at which, on a show of hands, a clear majority of those present disputed a claim by Anthony Bolton that his then public bullishness on equities was a contrarian call.

A second show of hands revealed that, although being bullish was what the majority professed to be, only a tiny minority had positioned clients' portfolios to reflect that view. While the audience was talking about loading up on equities, Mr Bolton was one of the few who had already done so. A year later many in the audience were struggling to catch up with the renewed bull market they had called, but failed to act on.

A second valuable rule is: "Never waste any time on investors who appear to be telling the markets what to do." Saying something will happen is a good way to generate a headline, but a poor way to make money. Every investment call can at best be an assessment of probabilities. Those who proclaim that an outcome is a virtual certainty are either deluded, charlatans or professionals who are paid to believe it. Those who are hesitant and make liberal use of phrases such as "my guess", "the most probable outcome" and so on are the ones talking the true language of the market.

A third useful empirical rule is: "Don't use Japanese experience as proof of anything." Many of us have fallen at this hurdle over the years. Just as the great equity bull market of the 1970s and 1980s powered on beyond any possible rationalisation, so too the subsequent 20-year period has been full of commensurate disappointments. The Japanese economic experience of the last 40 years serves only to demonstrate that Japan, for reasons that are open to analysis, marches to different rules from almost every other market, society and economy. It is the exception to almost every rule in the book. Those who claim the US must follow Japan into 20 years of debt deflation are breaking both the second and the third rule.

If forecasts are no use, then what is the basis on which investors can or should make decisions? Value has to be part of it. Momentum is also a useful tool: consistent as long as it works and then periodically catastrophic when it breaks down. Technical analysis, if used as a guide to probabilities, has a place; ditto good fortune. A good deal of the time, however, markets can appear to be neither obviously dear nor cheap. Who is buying government bonds today out of unalloyed conviction.