"Guru Stock Market Forecasting Grades"

Nords

Nords

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CXOAdvisory.com updated their guru rankings at http://www.cxoadvisory.com/gurus/. Scroll down to the bottom of the page for the details on each individual's overall market forecasts.

Ken Fisher leads at 69%. Marketwatch and Zacks had a couple more over 50%. As for the rest... flip a coin.

I was a bit surprised to see Jim Jubak come in so low, but again these rankings look at overall market forecasts and not individual stocks. And of course I was happy to have my bias confirmed on Jim Cramer & John Maudlin Mauldin.

If I was seriously contemplating following a guru then I'd start with a subscription to Hulbert's newsletter rankings.
 
Nords said:
If I was seriously contemplating following a guru then I'd start with a subscription to Hulbert's newsletter rankings.
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Wouldn't you agree that Hulbert only has an excellent rear view mirror? By subscribing to him you're assuming/accepting that the past performance will persist.

Or, are you saying, "if 7 newsletters are buying this stock, then the choice to buy must generally be right"?

-CC
 
Anyone below 50% should be taken out and shot ... or at least FIRED.

Tried Hulbert's letter for 1 year. Didn't do anything with it ... seemed like a "snap shot" of current letter positions. Really not forward looking.

Been following Bob Brinker since his fateful call in January 2000 ... had good luck with him (back in the market March 11 2003!) but agree this could all change.

Disclaimer: Stocks less than 20% of my wad ... so I don't mind timing them.
 
The article presents a summary of the percent of correct predictions on the movement of the market. The pundits were correct on average 50% of the time (equal to a coin flip).

If it is true that the market goes up 67% of the time, wouldn't a permabull be correct 67% of the time? What does this say about our market pundits? :D
 
CCdaCE said:
Wouldn't you agree that Hulbert only has an excellent rear view mirror? By subscribing to him you're assuming/accepting that the past performance will persist.
Or, are you saying, "if 7 newsletters are buying this stock, then the choice to buy must generally be right"?
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You're off the mark. Let me restate.

I've watched people spend thousands of dollars trying to find the "right" newsletters but it never occurred to them to pay a couple hundred for expert advice on choosing their expert advice. IMO Hulbert publishes the only unbiased ranking of newsletter/guru forecasts. He's a convenient one-stop shopping center for picking newsletters or gurus who you'd want to follow around. His subscription is expensive but it's better than randomly sampling newsletters and in the end it's probably cheaper than a bunch of trial subscriptions. The nicest thing I can say about the newsletter system is that Hulbert is the best voice of reason.

I don't know any credible evaluation tool other than a rear-view mirror. In fact I don't know any better evaluation tool... FIRECalc is based on it and Monte Carlo has a ton of drawbacks. A concensus forecast is just another way of telling you what you should have bought last month.

Having said that, I don't subscribe to newsletters and I doubt I ever will. I don't pay financial advisors and I don't buy mutual funds, let alone loaded mutual funds. I don't need to spend the extra money (or the extra work) in the hopes of extra return. It's easier to DCA into no-load index mutual funds or, in the withdrawal phase of life, to consider moving to ETFs. It may be more profitable to use a newsletter or other "professional" advice, but it's more work with no guarantee of more return.

I would, however, be interested in two unprecedented newsletter subscriptions:
1. A newsletter money-back guarantee that refunds your subscription fees and your losses if their recommendations don't happen, and
2. Peter Lynch's fabled copy of tomorrow's newspaper delivered today.
 
Wow - uber-bear Bill Fleckenstein at the absolute bottom with 27%! Gosh - I guess that makes him a great contrarian indicator!

I used to follow Don Hays - I'll have to go find him again at www.marketwatch.com.

Audrey
 
justin said:
The article presents a summary of the percent of correct predictions on the movement of the market. The pundits were correct on average 50% of the time (equal to a coin flip).

If it is true that the market goes up 67% of the time, wouldn't a permabull be correct 67% of the time? What does this say about our market pundits? :D
Click to expand...
Hey - maybe that explains Don Hays score! LOL!

(actually, if the score is based on the last 5 years or so, a perma-bull wouldn't score too well)

Audrey
 
I subscribed to Hulbert's meta newsletter for a year. I'm not particularly interested in newsletters these days, but I figured maybe there was something I was missing out on. Reading Hulbert made me secure in knowing that newsletters won't give me any significant edge over a well allocated portfolio of indexes. Maybe some newsletters could reliably give me a small fraction of a point edge in gains on a risk adjusted basis, but predicting which ones would do that and then taking the time to follow the trades just isn't worth it.

Besides the data, I actually found the articles useful; he always writes based on quant evidence rather than speculation. One of the most wise pieces of advice I have ever heard is that buy and hold doesn't work for everyone. He points out that buy and hold only works if you can actually do the hold part through severe downturns. If you can't (or won't or don't want to), then you are a market timer and you should focus on doing your timing right (or getting comfortable with a newsletter doing it for you) rather than pretending you are a buy and holder.

This insight comes in useful when advising other people about finances. If you tell them buy and hold an index fund most people hear the buy part. But when the market tanks they will hear the pundits inciting people to run for the exits and they are left with a failed portfolio.
 
tryan said:
Anyone below 50% should be taken out and shot ... or at least FIRED.

Tried Hulbert's letter for 1 year. Didn't do anything with it ... seemed like a "snap shot" of current letter positions. Really not forward looking.

Been following Bob Brinker since his fateful call in January 2000 ... had good luck with him (back in the market March 11 2003!) but agree this could all change.

Disclaimer: Stocks less than 20% of my wad ... so I don't mind timing them.
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Tho I am skeptical regarding the methodology, I am glad to see Brinker rank highly on this list since I also follow his guidance (generally), and its not comparable to other marketimers as he primarily only identifies broad trends in the S&P......that's not nearly as difficult to get right as picking individual stocks.
 
Its all just "Financial porn" to me, worthless trash. I prefer the 'cone of silence' approach. :)
 
depends on the newsletters. the ones that try to pick the next microsoft, or claim to have insight into the future moves are useless. the market timing ones and their proprietary methods are useless.

but some are excellent. they are informative, informational and have a better inside look at things than you or i have access to.

case in point is current holding of mutual funds. what you see on morningstar is months old usually . you can choose 3 or 4 funds from fidelity and end up with overlapping stocks and similiar weightings and not even realize it looking at morningstar data. i enjoy the newsletters i get and use them as guidance as their info is very current and they pay for this insight so their model portfolios are usually far better balanced and diversified then i can do on my own.


its nice also to have a little hand holding and guidance when things hit the crapper too. its like a sports team , you can have lots of talent but the team coach kind of harnesses and puts that talent into a co-ordinated effort and helps when emotions run high or individual personalities take over and you just may do the wrong thing like selling instead of buying.

bottom line is their is lots of talent out their and lots of useless crap. its up to you to find what works for you but i certainly wouldnt make a blanket statement that all newsletters or financial advisors are rip offs.
 
Some of these may be a function of their style. I know Fisher makes very few "predictions" and they are for major market moves. He's been in Forbes for decades so he is averaging only a few predictions (on average) each year. From what I've heard of Tobin Smith on the radio, he's calling the market on a regular basis and makes many more calls each month.

I used to subscribe to a newsletter many years ago. It didn't do me any good using their "hot tips." If all the subscription cost me was the subscription cost, I'd be much better off today. It was the final straw after my days as a chartist. Since then, I've been an diversified, buy and holder. As index funds have grown, I've migrated almost entirely to them. I've done much better since doing these latter moves.
 
the reason buy and hold works so well , think about this aspect of it.

while looking back historically to see how you should have timed things it is an easy task like monday morning quarterbacking. the fact is trying to time things on your own is very hard. a person that usually bails at the hint of a down turn is usually a nervous nelly who is afraid of loosing money or gains. just the opposite of the personality it would take to get back in near the bottom, a battle hardened ,damn the torpedos full speed ahead kind of personality. most of us dont have dual personalities and so we set ourselves up for failure
 
mathjak107 said:
most of us dont have dual personalities and so we set ourselves up for failure
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Good insight, to be a trader you have to know when to buy and when to sell. For me, at a minor scale over a few years and a few bucks I got the impression that I know when to buy. . Someone else might get nervous at highs and intuitively know when to sell. The buying part is easier then when to sell, at least for me, and it works because 1) the market tends, over time, to go up 2 my intended hold time was 'forever', I want dividends, something to sell if an unexpected need arises and something to leave to the kids, 3) some insight or luck in finding undervalued stocks. But it does take p dual personality to be a successful trader IMHO.
 
mathjak107 said:
depends on the newsletters. the ones that try to pick the next microsoft, or claim to have insight into the future moves are useless. the market timing ones and their proprietary methods are useless.

but some are excellent. they are informative, informational and have a better inside look at things than you or i have access to.

case in point is current holding of mutual funds. what you see on morningstar is months old usually . you can choose 3 or 4 funds from fidelity and end up with overlapping stocks and similiar weightings and not even realize it looking at morningstar data. i enjoy the newsletters i get and use them as guidance as their info is very current and they pay for this insight so their model portfolios are usually far better balanced and diversified then i can do on my own.


its nice also to have a little hand holding and guidance when things hit the crapper too. its like a sports team , you can have lots of talent but the team coach kind of harnesses and puts that talent into a co-ordinated effort and helps when emotions run high or individual personalities take over and you just may do the wrong thing like selling instead of buying.

bottom line is their is lots of talent out their and lots of useless crap. its up to you to find what works for you but i certainly wouldnt make a blanket statement that all newsletters or financial advisors are rip offs.
Click to expand...
For some folks going with a guru or newsletter is worth it. If it makes you feel better or helps you to sleep at night, by all means give it a go. Having spent several years as licensed broker in the past, and having spent the past 20 years continuously educating myself on investments, it is not something that appeals to me. I would rather use and advanced index strategy with the lowest fees possible and take my chances with the averages. I don't feel the need to beat the market averages. :)
 
Alex said:
For some folks going with a guru or newsletter is worth it. If it makes you feel better or helps you to sleep at night, by all means give it a go.
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I believe one of the benefits/goals of this forum is to help people learn to manage their own money and part of that is learning that the "gurus" don't have any pipeline to a higher knowledge.

I've recommended this forum to several people but so far no one has come up to ask me if I'm "2B." If they are hanging around here, I'm just as bombastic and opinionated in real life so I should be immediately recognizable.
 
2B said:
I believe one of the benefits/goals of this forum is to help people learn to manage their own money and part of that is learning that the "gurus" don't have any pipeline to a higher knowledge.

I've recommended this forum to several people but so far no one has come up to ask me if I'm "2B." If they are hanging around here, I'm just as bombastic and opinionated in real life so I should be immediately recognizable.
Click to expand...


i think a very important goal of this forum is to teach where to go for correct information , how to evaluate on your own if advice is bull , and just a good general education in finance, but not necessarily doing it on their own. as we say in my engineering business you dont need to know all the answeres just where to go for the correct answeres
 
mathjak107 said:
... as we say in my engineering business you dont need to know all the answeres just where to go for the correct answeres
Click to expand...
Also you need to always remember that "gurus" are in the publishing business. Following what they publish without DD and your own strategy is similar to subscribing to a medical newsletter and following the contents rather than figuring out what you really need.
 
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