Not to pick on Kenneth Fisher, but lets play an analytical game: How many reasoning errors can you find in this article from Fisher in this month’s Fortune:

"Last month I promised to explain why I expect stocks to be up 25% this year. Well, they sure haven’t started out robustly. But I’m not throwing out my rose-tinted glasses. My reasoning: First, forecasters have a very tight and strong consensus for low-single-digit stock returns this year, yet historically the consensus has almost always been wrong.

So stock returns should be either into double digits or else negative. Now, the first year of a President’s term has almost always been sort of 50-50, either negative or up a lot–nothing in between. Since I don’t expect a negative year, I expect the market to go up a lot.

Next, positive first years of Presidents’ terms average 28%. The numbers for second-term Presidents (11 cases since 1900) are also blessed, with 64% positive years (see chart) and those years averaging a 24% gain. Third, the inverse of the market’s P/E–that is, the earnings yield–is now higher than ten-year bond rates in every important country. This is the case for the first time in decades. Stocks are cheap globally, just when people think they aren’t."


It’s a Beautiful World
Kenneth L. Fisher,
Fortune, 02.28.05, 12:00 AM ET

Category: Markets, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

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