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Can experts, whether self-proclaimed or endorsed by others (publications), provide reliable stock market timing guidance? Do some experts clearly show better intuition about overall market direction than others? [NO is the answer to the first question and YES to the second. Let us explain how we came to those conclusions.] Words: 360
So says CXO Advisory Group (www.cxoadvisory.com) in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com has further edited below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
The article goes on to say, in part:
We have accumulated reviews of the public U.S. stock market forecasts of various investing/trading experts for more than two years. [Go here for that list.] With approximately 6,000 measurements for more than 60 gurus, including bulls and bears and technicians and fundamentalists, we have critical mass for:
- assessing the forecasting acumen of the stock market gurus as a group; and,
- ranking experts according to the accuracy of their past forecasts.
This kind of forecasting ability is different from, but may be related to, stock picking expertise.
[Editor’s Note: I did some further analysis of their findings. I reduced their macro list of 60+ gurus down to just the 36 who have been rated in the last 6 months in an effort to provide a more concise period of comparison and came up with the following findings:- 65%+ forecasting accuracy: 1 (Jack Schannep @ 66%)
- 60-64% accuracy: 3 (Ken Fisher – 64%; David Dreman – 64%; the Aden sisters – 61%)
- 50-59% accuracy: 8 (Jason Kelly – 59%; Cabot Market Letter – 59%; Louis Navellier – 57%; Steve Sjuggerud – 57%; Carl Swenlin – 55%; Richard Moroney – 54%; Gary Kaltbaun – 53%; Bob Brinker – 50%)
The above represents only 33.33% of the total meaning that 66.67% of the supposed gurus were wrong the majority of the time. On average their forecasting acumen was ONLY 46.2%. Notably inaccurate forecasters were Robert Prechter @ 23%; Steve Saville @ 28%; Robert McHugh @ 32%; Abby Joseph Cohen @ 35%; Richard Russell @ 37%; Bill Fleckenstein @ 37% and Bob Hoye @ 38%!]
Note that the overall assessment of the stock market forecasting ability of experts in aggregate is far more reliable, based on sample size and duration, than the evaluations of individuals…
*http://www.cxoadvisory.com/gurus/ (To access the article please copy the URL and paste it into your browser.)
Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
Articles by some of the above “Gurus”:
1. Richard Russell: The Dow at 400 is Nolonger an Absurd Joke – Got Gold?
My old friend, Bob Prechter, is talking about Dow 400. I used to think this was an absurd joke. I no longer think it’s a joke. The ultimate result will be a primary bear market shocking in duration and extent. Words: 524
2. Richard Russell: The Last Currency Standing Will Be Gold
Inflation is the central banks’ method of avoiding the pain of austerity. Inflation is the current economic narcotic that is used by modern nations. It’s the old ‘beggar thy neighbor’ system, and it will ultimately result either in all out hyperinflation and a collapse of the fiat currency system or a corrective deflationary crash. Either way, the last currency standing will be gold.
3. Buffett, Russell and Hoisington: Deflation or Inflation?
“Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.” says Warren Buffett. Words: 982 In the following edited excerpts from the original article* Cam Hui (www.questfunds.com) puts forth the case for both inflation and deflation by the likes of Richard Russell, Warren Buffett and Van Hoisington: The Case for Deflation 1. […]
4. Robert Prechter’s Elliott Wave Theory: Dow Set to Tumble to 8,000
U.S. stocks could sink by more than 20 percent if the neckline of a head-and-shoulders pattern on the Dow Jones Industrial Average is breached, according to Robert Prechter’s Elliott Wave International Inc. Words: 524
5. Aden Sisters: Buy Gold NOW as it Corrects on its Way to $2,000
When you just consider the downgrade of U.S. debt, the jobs problem, the housing situation, the European bankconcerns and their debt crisis, the negative outlook for the global economy, not to mention that the Fed will likely seek new measures to help the economy, we just don’t see gold coming down any time soon, other than having a normal downward correction [as currently is the case. Let us show you why.] Words: 1102
6. Marc Faber: Gold Could Fall to $1,100 “We overshot on the upside when [gold] went over $1,900.We’re now close to bottoming at $1,500, and if that doesn’t hold it could bottom to between $1,100-$1,200.”
7. A Look Back at the Performance of Gold vs. Stocks in Times of Crisis (by Carl Swenlin)
We are in the midst of turbulent times, and it seems inevitable that things can only get worse. Most investors are of the opinion that gold is one of a very few areas of safety…however, when we look at historical charts, it is obvious that gold doesn’t always behave in the way we would expect. [Let me explain.] Words: 541
8. 2 Misguided Assertions About Gold – Read On Mr. Buffett! (by Steve Saville)
In which form would you prefer to hold your monetary savings — in the form of money that banks can create in unlimited amounts out of nothing, or in the form of a metal that has been used as money for thousands of years and whose supply never increases by more than 2% from one year to the next? The answer…isn’t necessarily straightforward [as] a lot depends on the policies being implemented at the time by central banks and governments [- but let me try.] Words: 1300
9. Dow Theory Signals New Bear Market is Imminent
In a first since the bear market bottom of March 9, 2009 and the Dow Theory bull market indication on July 24, 2009, the Dow Jones Industrial Average and the Dow Jones Transportation Average have signaled the beginning of a bear market. [Let us explain.] Words: 824
Articles on Timing the Market:
1. Ride the Market Waves With These 6 Momentum Indicators
It is hard to know what to buy or sell let alone just when to prudently do so. Thank goodness there are indicators available that provide information of stock and index movement of a more immediate nature to help you make such important decisions. This article describes the 6 most popular Momentum Indicators. If ever there was a “cut and save” investment advisory this is it! Words: 1234
2. Here’s How to Time the Market!
There are many indicators available that provide information on stock and index movement to help you time the market and make money. Market strength and volatility are two such categories of indicators and a description of six of them are described in this “cut and save” article. Read on! Words: 974
3. Yes, You Can Time the Market – Use These Trend Indicators
Remember, the trend is your friend and now you have an arsenal of such indicators to make an extensive and in-depth assessment of whether you should be buying or selling. If ever there was a “cut and save” investment advisory this article is it. Words: 1579
4. Understanding the Patterns, Trends, Indicators and Formations of Technical Analysis
Technical Analysis is the discipline of finding reliable patterns, trends, indicators and formations, mainly in price, for buying and selling assets…To a large degree, technical analysis is a self-fulfilling prophesy [in that] it is effectively an unofficial agreement amongst market participants to impose more order on what would otherwise be more random. The key is to understand which patterns, formations and indicators are widely adhered to, so as to become useful predictors of price action [and this article does just that. Let me explain.] Words: 470