As a trader or investor, you certainly have noticed the tons of analysts and self-proclaimed gurus out there who all give their opinion about what will likely happen next in the markets. But are they any good?
Some of them run free blogs and just want to share, others are on some financial TV channel secretly promoting a particular bank or investment/trading vehicle of any sort. Then there's also the group of analysts that usually wants to spread bad news, because bad news just seems to sell better, the "oh by the way, here's my new book to prevent all that"-analysts.
And let's not forget about the economists (or people who refer to themselves as such). These 'economists' sometimes have a very convincing economical reasoning, there's just no way around it, or so it seems. And even if we have a housing bubble, fluctuating currencies, sky-high commodity prices and what not, what does all that mean for the stock market? Somehow many people keep thinking of the stock market as sort of deterministic machine. But if we're honest, it has proven us many times it's not. It's much more about randomness, irrational behavior and probability.
As with so many subjects, finance and trading in particular, the internet and other media outlets have a cacophony of opinions to offer that's just extremely overwhelming. How some of those analysts made it to the ranks of 'credible analysts' is completely unclear, other than that they're probably good at (secretly) promoting a product or service. The quality of their analysis is not really the key issue here, it's how well they perform in attracting new business in any shape, way or form. And last but not least, they are damaging the reputation of the good and honest sharing analysts out there.
Also, let's be clear about one thing: it's good to have many (opposing) opinions, otherwise there wouldn't be any trading. This post is not about that, it's about the value of all these opinions. I prefer the opinion of consistent winners in the market, not just any opinion. But who's a consistent winner? The professional analysts opinions should at least out-perform the simple coin flip, but I'm afraid most of them are not able to do that and are even under-performing the coin-flip.
Below you'll find a table with predictions done by random analysts I came across. I am certainly not claiming that any of these analysts below have a hidden agenda, or are otherwise practicing unfair or unethical behavior because very often there's no easy way of telling that. They could, but there's no proof. They could also be completely honest with their analysis, but never wondered whether their work has any (trading) value.
I was particularly interested in analysis that had some concrete advice or actual numbers in it, which is mostly a rare phenomenon (surprisingly). Also, many analysts preach an either-this-or-else-that story that is always right in hindsight (but also just as wrong and untradeable).
There's a link to the original article, but also to a pdf copy of that original post. It's not uncommon to have failed predictions silently removed from the publishing website. At some point in time, the claim will be checked and then validated as true, false or something in between if it's not really clear.
If you happen to find more interesting guru predictions, let me know.
|Claim that was made||Date||Link to original post||Link pdf copy||Validation date||Validated as...|
|Scott Wren, Wells Fargo Investment Institute senior global equity strategist: "We're looking for a few headwinds in terms of valuations, and not a heck of a lot getting done in Washington," Wren wrote that his year-end target range for the index remains 2,230 to 2,330. (source: CNBC)||July 4th, 2017||The 2017 rally is about to fade, warns Wells Fargo strategist|
|Marc Faber, the editor of "The Gloom, Boom & Doom Report' and a perennial bear, isn't backing down from his latest dire prediction that would send stocks plummeting by 40 percent or more.
Faber is known for correction calls over the years which have never materialized. But he's sticking by his latest call, acknowledging critics have "questioned my sanity." (source: CNBC)
Let's look at this again in 6 months
|June 24th, 2017||It’s going to end ‘extremely badly,’ with stocks set to plummet 40% or more, warns Marc 'Dr. Doom' Faber|
|David Stockman: "This is one of the most dangerous market environments we've ever been in. It's the calm before a gigantic, horrendous storm that I don't think is too far down the road"
Stockman believes the S&P 500 could easily fall to 1,600, about a 34 percent drop from current levels. He's made similar calls like this in the past, but they haven't materialized. (source: CNBC)
Let's look at this again in 6 months.
|June 11th, 2017||'Horrendous storm' to hit stocks, Wall Street not rational: David Stockman|
|Bank of America's Stephen Suttmeier believes the S&P 500 could run up as high as 2,500 in the short term. (source: CNBC)
Let's look at this in 6 months.
|May 3rd, 2017||This chart points to S&P 2,500: BofA technician||Aug 15th, 2017||Suttmeier: true|
|David Tice is predicting that the economy is months away from a deep correction that will send stocks down as much as 50 percent.
He's calling for a 30 to 50 percent S&P pullback over the next six to 10 months. He also made that prediction in 2012 and 2014. It never happened. (source: CNBC)
|May 6th, 2017||Investors are missing the glaring risk of a recession: David Tice|
|Frank Holms, who runs an investment management firm specializing in gold: this is the time to buy gold. It should rally more than 20% within the next 12 months.||May 4th, 2017||Gold is tumbling, but here's why now might be the time to buy|
|Tom Lee, a longtime equity strategist now with Fundstrat Global Advisors: be cautious this year on the S&P 500, it should drop 5% to around 2275 by years end.||May 2nd, 2017||There’s a strange ‘disconnect’ in the market, warns strategist Tom Lee|
|Robert Shiller, economist at Yale University: "With stock valuations high, it’s time to reduce your holdings." (source: CNBC)
Shiller clearly states that this is a long term view. Let's look at this in 6 months. If the S&P 500 is significantly lower or higher, this could mark the forecast as true or false.
|Feb 24th, 2017||Reduce stock holdings||Aug 15th, 2017||Shiller: false|
|"Crossing Wall Street" blog editor Eddy Elfenbein described the Monday slip as a "short-term pullback," and predicts another rally on the horizon thanks to the potential of higher interest rates, which would benefit the banks.
From a technical standpoint, the chart of the financials looks promising to Evercore ISI's Rich Ross. According to Ross' chart of the financials-tracking ETF (XLF), a "bullish flag formation has formed at the end of the chart, a pattern suggesting that XLF could be headed higher. [The chart] projects an upside to as high as $27, $28 on that XLF ETF." (source: CNBC)
Let's look at this in three months and evaluate.
|Mar 7th, 2017||Strategists spot a buying opportunity in the financials (original article had wrong title)||July 11th, 2017||Elfenbein: true, Ross: false|
|Discussing the retail sectore (XRT), two analysts predict more downside for the XRT, in particular Target. Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management, sees several signs flashing "sell" on Target shares.
Ari Wald, technical analyst at Oppenheimer "We recommend staying away from the traditional retailers; we think they continue to underperform". (source: CNBC)
Let's look at this in three months and evaluate.
|Mar 1st, 2017||Retail stocks, ‘decimated’ by tech, could fall even further||July 11th, 2017||Schlossberg: true,
|Despite its recent gains, utilities (XLU) not an attractive sector to invest in according to Erin Gibbs, equity chief investment officer at S&P Global and Zachary Karabell, Head of Global Strategies at Envestnet (source: CNBC)
||Feb 27th, 2017||This sector just had a historic run – but may no longer be an attractive pick||July 11th, 2017||Gibbs false
|Analysts expecting upside for the energy sector (XLE). "You want to take advantage of this pullback, and you're going to see some reversion," says Evercore ISI head of technical analysis Rich Ross. "The energy space is not going to appear unloved for long", said Stacey Gilbert, head of derivatives at Susquehanna. (source: CNBC)
Let's look at this in three months and evaluate.
|Feb 27th, 2017||The strange energy slide could spell opportunity||May 6th, 2017||Ross: false,
|Boris Schlossberg, BK Asset Management's managing director of foreign exchange strategy thinks oil price per barrel could quickly drop below $50. "So I think we're in a perilous territory".
David Seaburg, head of sales trading at Cowen & Company says "I think from a trading perspective here for the near term, it looks like it's a level you probably want to step in and take a look from the long side" (source: CNBC)
Let's look at this again at the end of March and evaluate.
|Feb 9th, 2017||Why oil could now be in a danger zone||May 6th, 2017||Schlossberg: true, Seaburg: false|
|Eddy Elfenbein editor of the Crossing Wall Street blog, likes energy sees an upside for the energy ETF (XLE) in roughly 6 months to a year.
Jonathan Krinsky, chief market technician at MKM Partners is expecting the XLE to come down to the lower to mid-60s. (source: CNBC)
|Jan 31st, 2017||The energy sector is nearing a critical level||July 11th, 2017||Elfenbein: false,
|Tony Dwyer, senior managing director and chief market strategist at Canaccord Genuity expects a nasty drop of 4 to 7% from current levels. At the claim date, the S&P 500 is at 2300, so that would make a target range of 2140 to 2200. Dwyer is expecting this drop in the 'near term', so let's say before the end of March. (source: CNBC)||Jan 26th, 2017||Bullish strategist says don't buy yet - a 'nasty' market drop 'may be imminent'||May 6th, 2017||Dwyer: false|
|According to Marc Faber, Commodity prices will go higher, crude oil will go to $70,- a barrel in the 'not too distant future'. Let's assume that's within a month or two, so the beginning of 2017. (source: CNBC)||Oct 24th, 2016||Dr Doom Marc Faber on why commodity prices will rise, oil to hit $70 soon||Jan 8th, 2017||Faber: false|
|Rich Ross, technical analyst at Evercore ISI, expects the S&P to drop roughly 4% from current levels. This means a drop from 2120 to 2036. The S&P is now sitting on the neckline of a head and shoulders pattern. (source: CNBC)||Oct 13th, 2016||S&P is just inches away from doing something bad||Jan 8th, 2017||Ross: false|
|Ari Wald technical analyst at Oppenheimer "This pessimistic sentiment is one more reason we're bullish on equities."
Kathy Lien a macro strategist and currency trader at BK Asset Management "So I do fear that we could see a deeper correction in stocks. [...] a Christmas collapse could be in the offing" (source: CNBC)
|Sep 28th, 2016||Technical analyst finds counterintuitive reason for stocks to rise||Jan 8th, 2017||Wald: true
|Boris Schlossberg at FX strategy at BK Asset Management on the S&P 500 at the end of this year: "The air is coming out of the balloon, you're going to see it lower."
Jeff Weiss, chief technical analyst at Clearview Trading Advisors: "Key support in the 2125 vicinity." This translates to something like: if we're staying above 2125, we're above, else we're below. This is what we see in many technical analysis. The claim is always right in hindsight (source: CNBC)
|Sep 21st, 2016||These are the two key levels for the market right now: Technical analyst||Jan 8th, 2017||Weiss: false, statement is useless for investing/trading
|Eddy Elfenbein editor at Crossing Wall Street: "With the Fed leaving short-term interest rates as they are for September, it's time for investors to buy stocks." Gina Sanchez at Chantico Global: "investors should really think about taking some profits." (source: CNBC)||Sep 21st, 2016||Math tells you to buy stocks right now: Strategist||Jan 8th, 2017||Elfenbein: true,
|Adam Kobeissi at The Kobeissi Letter: It's time to jump into U.S. Stocks. “We have increased long exposure and still believe 2,200 on the S&P is a potential by year end”. (source: MarketWatch)||Sep 20th, 2016||Buy the S&P because the Fed’s hawkishness is already baked in||Jan 8th, 2017||Kobeissi: true|
|Albert Edwards at Société Générale: US economy on the brink of recession and S&P 500 set to plummet to 550. Edwards: "If you’re buying stocks today, you need a psychiatric evaluation." (source: MarketWatch)||Sep 20th, 2016||Meet the affable bear who expects the S&P to tumble to 20-year lows||Jan 8th, 2017||Edwards: false|
|Sven Henrich at Northman Trader: S&P 500 will drop 20-25% before the end of 2016, so somewhere between 1600 and 1700. (source: CNBC)||Sep 14th, 2016||Stocks are primed to drop 25 percent before the year is out: ‘Northman Trader'||Jan 8th, 2017||Henrich: false|
|David Kostin at Goldman Sachs: we expect the S&P 500 to end 2016 at 2100, a target that represents a decline of 1.7% from current levels. (source: MarketWatch)||Sep 13th, 2016||Pain may be in store for the S&P 500, says Goldman||Jan 8th, 2017||Kostin: false|
|Andrew Keene at AlphaShark: Gold going down next two weeks, GLD down to $120 en $113 next. (source: CNBC)||July 7th, 2016||I’m going to make a 400% profit on gold–here’s how: Trader||Sep 13th, 2016||Keene: false|
|Craig Johnson at Piper Jafray and Phillip Streible at RJO Futures: Gold going up 12% short term, up to $1525. Maybe a short pull back first. (source: CNBC)||July 6th, 2016||This chart shows why gold is about to rise another 12 percent: Technician||Sep 13th, 2016||Johnson: false|
|John LaForge at Wells Fargo: Gold will drop $300,-, to December 2015 level around $1050,-. Gold is a commodity and commodities are in a long term bear market. (source: CNBC)||July 6th, 2016||Gold’s run is done — look out for a $300 drop: Wells Fargo strategis||Sep 13th, 2016||LaForge: false|
|Jeremy Siegel, finance professor at Wharton: Stocks will go up 10-15% second half of 2016, so on the S&P 500 from 2090 to the 2300-2400 range. (source: CNBC)||July 5th, 2016||Siegel: Stocks may jump 15% in the 2nd half of 2016 — here’s why||Jan 8th, 2016||Siegel: false (but close)|
|Tom Lee at Fundstrat Global Advisors: New highs in stock market matter of time, a lot of money still waiting on the sidelines to get in. (source: CNBC)||July 1st, 2016||Tom Lee: It’s just ‘a matter of time’ until we hit record highs||Sep 13th, 2016||Lee: true|
|Rich Ross at Evercore ISI, Boris Schlossberg at FX strategy at BK Asset Management: Stocks will continue to fall, Brexit is just the start. Cut losses on stocks and expect S&P 500 to go lower. (source: CNBC)||June 28th, 2016||Better buckle up—market turmoil may not be over||Sep 13th, 2016||Ross: false
|Craig Johnson at Piper Jafray, Eddy Elfenbein at Crossing Wall Street: Stocks will continue to go higher, S&P 500 to rise to 2350 by the end of 2016 (source: CNBC)||June 23rd, 2016||America’s $1.35 trillion cash hoard could drive stocks higher, technician says||Jan 8th, 2016||Johnson, Elfenbein: both false (but close)|
|Sandy Jadeja at Core Spreads: Stocks could very well crash between August 20th and 30th, on September 26th and October 20th 2016 (source: Businessinsider)||June 18th, 2016||The man who accurately predicted 4 market crashes told us 3 more dates to worry about this year||Oct 25th, 2016||Jadeja: all three claims: false|