Market gurus and their predictions

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?

This is part 1 of a series. Also, make sure to check out part 2 and part 3.

Some of these analysts 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 want 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 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 whatnot, what does all that mean for the stock market? Somehow many people keep thinking of the stock market as a sort of deterministic machine. But if we're honest, it has proven to 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 outperform the simple coin flip, but I'm afraid most of them are not able to do that and are even underperforming 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.