Comments on: 2008 Investment Guides Are HILARIOUS

By: Barry Ritholtz

Barry Ritholtz — Wed, 31 Dec 2008 20:51:09 +0000

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 . . .

By: Scott F

Scott F — Wed, 31 Dec 2008 20:49:23 +0000

Here’s the full BW forecast:

ELAINE GARZARELLI, PRESIDENT, GARZARELLI CAPITAL

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.”

By: DL

DL — Wed, 31 Dec 2008 16:49:48 +0000

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.

By: Tom K

Tom K — Wed, 31 Dec 2008 16:33:23 +0000

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

By: leftback

leftback — Wed, 31 Dec 2008 16:17:10 +0000

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

By: kblasi

kblasi — Wed, 31 Dec 2008 15:24:10 +0000

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: http://www.youtube.com/watch?v=IjXUgxR4Z10

By: Kent @ The Financial Philosopher

Kent @ The Financial Philosopher — Wed, 31 Dec 2008 15:13:22 +0000

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

By: wally

wally — Wed, 31 Dec 2008 14:30:54 +0000

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.

By: Charlatan

Charlatan — Wed, 31 Dec 2008 14:25:09 +0000

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.

By: Steve Barry

Steve Barry — Wed, 31 Dec 2008 14:07:03 +0000

Birinyi Favorite stock for 2008…AIG…funny stuff.