Are market gurus / forecasters accurate?
Source: CXO Advisory Group LLC
The above table summarizes the results of our
reviews of the publicly available forecasts of experts regarding the future
direction of the overall U.S. stock market. For each expert, the table shows
the total number of measurable forecasts, the numbers of forecasts we judge
to be essentially right and essentially wrong, and the accuracy rate.
We have accumulated reviews of the public U.S. stock market forecasts of
various investing/trading experts for about a year. These
measurements include bulls and bears and technicians and
fundamentalists. We restrict reviews to publicly available material, putting
ourselves in the place of an individual investor trying to locate value in
the marketplace, and mindful of concerns about copyright and trade secrets.
Sometimes we find public records on the web sites of the experts themselves
and sometimes on web sites of other parties.
Random gurus in the list: Ken Fisher, Cliff Droke, Don
Luskin, Marc Faber, James Dines, Don Hays, Jim Cramer, Tim Wood, Bernie
Schaefer, Jim Puplava, Bill Cara, Richard Russell, John Maudlin, Gary
Shilling, Bill Fleckenstein, Bob Brinker, John Hussman
Rewriting History
Rewriting History by Alexander P. Ljungqvist (Stern School of Business,
NYU), Christopher Malloy (London Business School) and Felicia Marston
(University of Virginia) provides evidence that nearly 20,000 records in
I/B/E/S, a database of research analyst recommendations owned by Thomson
Financial and widely used by investment professionals and academics, were
manipulated between September 2002 and May 2004. This took the form of
selective, ex post removal of analyst's names from some of their historical
recommendations. These were not random; they were concentrated among the
worst performing recommendations.
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