Via New York Magazine, comes this amusing collection of bad forecasts for the 2008 year:

• Jon Birger, senior writer, Fortune Investors Guide 2008
Smart investors should buy [Merrill Lynch] stock before everyone else comes to their senses.”
Merrill’s shares plummeted 77 percent.

• Elaine Garzarelli, president of Garzarelli Capital, Business Week’s Investment Outlook 2008
Buy some of the most beaten-down stocks, including those of giant financial institutions such as Lehman Brothers, Bear Stearns, and Merrill Lynch.
As of January 1, none of these firms will still exist.

• Sarah Ketterer, CEO of Causeway Capital Management, Fortune Investors Guide 2008
“Fannie Mae and Freddie Mac have been pummeled. Our stress-test analysis indicates those stocks are at bargain basement prices.”
Fannie and Freddie had lost 90 percent of their value.

• Jon Birger, senior writer, in Fortune Investors Guide 2008
Our bet is that in a stormy market investors will gravitate toward, GE, the ultimate blue chip.

GE’s stock price tumbled 55%, and it’s on the verge of losing its triple-A credit rating.

• Archie MacAllaster, chairman of MacAllaster Pitfield MacKay in Barron’s 2008 Roundtable
“Bank of America will [not cut its dividend], I think they’ll raise it this year. My target price for the stock is $55.”
BofA share price now hovers around $14, and it has slashed its dividend in half.

• James J. Cramer, “Future of Business”  New York Magazine
“Goldman Sachs… finishes the year at $300 a share. Not a prediction — an inevitability.”

Goldman Sachs’ share price was $78, and the firm announced its first quarterly loss — $2.2 billion.

Yes, the 2008 investment guides were HILARIOUS — but what makes you think the 2009 guides will be any different.


The Folly of Forecasting Contributor
6/7/2005 1:05 PM EDT

Worst Predictions for 2008 (December 2008)

2008 Investment Guides Are HILARIOUS
By: Daily Intel
New York, 12/22/08 at 6:01 PM

Category: Financial Press, Humor, Markets, Really, really bad calls, Trading

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.

11 Responses to “2008 Investment Guides Are HILARIOUS”

  1. Steve Barry says:

    Here is one that is so bad…and it was made in Barron’s on September 22, 2008! Google is now close to 300…a loss of 30%

    The Case for Google Still Looks Compelling

    ONE OF THE COOL THINGS ABOUT A MARKET in disarray is that it creates rare opportunities. In the fall of 2002, with the Nasdaq about 1,000 points lower than it is now, stocks by the dozens were trading at discounts to their balance-sheet cash: It was one of the all-time great buying opportunities. I’m not convinced we’re seeing bargains of that variety right now, but there certainly are some tech stocks that clearly look too cheap.

    Let’s pick one to illustrate: Google (ticker: GOOG). Back in my March 31 column, I argued it made sense to start building a position in the stock, which was then in the high 430s. The call looked brilliant for a while, as GOOG climbed into the 590s in May. But now the stock is almost exactly where it was in March. And I once again would assert that the stock is too cheap to ignore.

  2. Steve Barry says:

    Birinyi Favorite stock for 2008…AIG…funny stuff.

  3. Charlatan says:

    Yes, but like you say, all commentators are wrong sometimes. The difference is that only one of those people would later write: ““Was there anyone out there who more loudly announced this credit crisis before it happened than I did?” — Jim Cramer, April 1, 2008.

  4. wally says:

    Saying that what happened yesterday will happen tomorrow is not much of a prediction system, is it! Unfortunately it was not just commentators who did that, it was the whole cadre of mainstream economists. Time to throw out that whole profession and all their theories and begin anew.

  5. Poor predictions are made every year at this time. In fact, they are made every day. 2008 just happened to be a year in which these poor predictions are more pronounced as we look back.

    The real “fools” are those who sheepishly follow the predictions and invest accordingly…

    “The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.” ~ Jesse Livermore

  6. kblasi says:

    These examples are why I subscribe to Costanza-style investing: When reading some sage investment advise from a “guru”, FIRST question why you shouldn’t “do the opposite”. The consensus 2009 advice: The market has bottomed. Now is the time to (prudently) buy.

    The Opposite:

  7. leftback says:

    Beware the conventional wisdom. Many of those fools are still out there.

  8. Tom K says:

    Predicting where any market will be 12 months out is just plain silly.

  9. DL says:

    Elaine Garzarelli had one good call in August of 1987.
    She was completely unhedged and definitive: get out of stocks.

    Since then, her market calls have ranged from mediocre to lousy.

  10. Scott F says:

    Here’s the full BW forecast:


    Best known for advising clients to sell just before the 1987 stock market crash, Garzarelli is a big bull today. Like many others, she expects economic growth to be sluggish in the first half of the year before the impact of the Fed’s interest rate cuts starts to turn things around.

    But while most are expecting modest stock market increases next year, Garzarelli is looking for something more: a 20% gain on the Dow and the S&P 500 stock index. Why? While most analysts are worried about negative earnings surprises, Garzarelli is betting that earnings will hold up: She says they will rise some 7%, as lower interest rates reduce the cost of borrowing for corporations and a weak dollar fuels strong export growth. Of the 14 indicators Garzarelli follows, which measure everything from investor sentiment to stock valuations, most are flashing favorable signals. ”

    Our models show the S&P 500 is undervalued by 25%.”

    Garzarelli is advising investors to buy some of the most beaten-down stocks, including those of giant financial institutions such as Lehman Brothers (LEH), Bear Stearns (BSC), and Merrill Lynch (MER). What would cause her to turn bearish? Not much. “Our indicators are extremely bullish.”

  11. Geez, that’s awful.

    Someone from her office (Friend? Associate?) tagged me via email, trying to convince me she isnt’/wasnt a perma-bull.

    Glad I didn’t bite at that line of nonsense . . .