I empathize with Wall Street strategists who are forced to provide precise forecasts for the stock market (and profit growth, interest rates, etc.) as of specific dates, usually year end. I've long thought that if one can get the direction of a market right with some sense of magnitude and perhaps a rough time frame, that is about all one can reasonably hope for.
The record of forecasters is generally abysmal, for obvious reasons. The future is unknown, and any number of factors affect market prices. But with so many media outlets these days, people demand forecasts and explanations after the fact to explain why things happen. So that's what they get, misleading though that may be.
So the forecasters are at it again. After the S & P 500 declined by 14% in the third quarter ended September 30, leading forecasters are on record with (at least public) optimism. Twelve prominent strategists are looking for the biggest fourth-quarter gain in stock prices in thirteen years (with an average gain of 15%). The last time they were this bullish was in 2008, when they predicted a fourth-quarter gain of 27%. Instead, the S & P 500 fell 18%. For those of us who are long, let's hope they're right this time.
Steve Lehman
LehmanInvest.blogspot.com/
S & P 500: 1195
No comments:
Post a Comment