Over at Marketwatch, Paul Farrell sifts through a book (sitting on my shelf) and pulls out these embarrassing quotes.

15 reminders of how happy talk misled us a decade ago

  1. October 1999: James Glassman, author “Dow 36,000.” “What is dangerous is for Americans not to be in the market. We’re going to reach a point where stocks are correctly priced, and we think that’s 36,000 … It’s not a bubble. Far from it. The stock market is undervalued.” (Fact: dot-com PE’s were astronomical, most over 40)
  2. December 1999: Joseph Battipaglia, market analyst. “Some fear a burst Internet bubble, but our analysis shows that Internet companies account for only 7% of the overall Nasdaq market cap but carry expected long-term growth rates twice those of other rapidly growing segments within tech.” (Fact: Internet Index lost two-thirds within six months.)
  3. December 1999: Larry Wachtel, Prudential. “Most of these stocks are reasonably priced. There’s no reason for them to correct violently in the year 2000.” (Fact: Nasdaq lost 50% in 2000.)
  4. December 1999: Ralph Acampora, Prudential Securities. “I’m not saying this is a straight line up. I’m not saying you can’t have pauses. I’m saying any kind of declines, buy them!” (Fact: He also predicted a 14,000 Dow by year-end 2000, and an 11-year bull.)
  5. February 2000: Larry Kudlow, CNBC host. “This correction will run its course until the middle of the year. Then things will pick up again, because not even Greenspan can stop the Internet economy.” (Fact: This faux economist is still hosting a cable show.)
  6. April 2000: Myron Kandel, CNN. “The bottom line is, before the end of the year, the Nasdaq and Dow will be at new record highs.” (Fact: In September he even predicted a rally to 12,000 by election day 2000.)
  7. September 2000: Jim Cramer, Mad Money host. “SUNW probably has the best near-term outlook of any company I know.” (Fact: Within four months Sun Microsystems dropped from $60 to $30. Down to $10 in a year. Below $3 in two years.)
  8. November 2000: Louis Rukeyser on CNN. “Over the next year or two” the stock market “will be higher, and I know over the next five to 10 years it will be higher.” (Fact: The market continued sinking, we fell into a recession, and tech lost 70% within two years.)
  9. December 2000: Jeffrey Applegate, Lehman Strategist. “The bulk of the correction is behind us, so now is the time to be offensive, not defensive.” (Fact: A sucker’s rally.)
  10. December 2000: Alan Greenspan. “The three- to five-year earnings projections of more than a thousand analysts, though exhibiting some signs of flattening in recent months, have generally held firm. Such expectations, should they persist, bode well for continued capital deepening and sustained growth.” (Fact: In 2008 he admitted he misled America.)
  11. January 2001: Suze Orman, financial guru. “In the low 60s here, I think the QQQ, they’re a buy. They may go down, but if you dollar-cost average, where you put money every single month into them, I think, in the long run, it’s the way to play the Nasdaq.” (Fact: You lose — the QQQ lost 60% more by October 2002.)
  12. March 2001: Maria Bartiromo, CNBC anchor. “The individual out there is actually not throwing money at things that they do not understand, and is actually using the news and using the information out there to make smart decisions.” (Fact: Maria sounds more like a writer for The Onion.)
  13. April 2001: Abby Joseph Cohen, Goldman Sachs. “The time to be nervous was a year ago. The S&P then was overvalued, it’s now undervalued.” (Fact: The markets continued down for another 18 months.).
  14. August 2001: Lou Dobbs, CNN. “Let me make it very clear. I’m a bull, on the market, on the economy. And let me repeat, I am a bull.” (Fact: The market was actually in bear territory for another year as the Dow and Nasdaq lost another third.).
  15. June 2002: Larry Kudlow, CNBC host. “The shock therapy of a decisive war will elevate the stock market by a couple thousand points.” (Fact: For Larry, war is just another “economic stimulus program.” He also said the Dow would hit 35,000 by 2010.)

Quite amazing.


The Folly of Forecasting
Barry Ritholtz
Apprenticed Investor Series
The Street.com, 06/07/05 – 01:05 PM EDT


Don’t buy Wall Street’s latest con
Paul B. Farrell
MarketWatch, 7:14 p.m. EST Jan. 5, 2009


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

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.

31 Responses to “Beware Wall Street’s Happy Talk”

  1. INTC just warned….look out below!

    Intel sees fourth-quarter revenue drop of 23% from year ago

  2. awilensky says:

    Where are the dozens of analysts that kept yelling, “Google to 2000″?; they are still on CNBC yelling about the other stocks they chant like mantras, “Freeport Mcmoran!!!!”

    How do these people look in the mirror?

  3. Moderately along-topicarticle on CNN about “Putting your financial house in order”… A bit ‘quaint’ if you ask me, the summary:
    * Have a mortgage and invest 1 month’s payment (he quotes $600) per year in the market, for an easy annual compound rate of 10%.
    * Pay off your credit cards and don’t carry a balance.

    Where in the fcuk do they find these people?! First off: a $600 mortgage? Good luck finding that in a trailer park in Arkansas, has he not missed the biggest asset bubble in the history of the planet? Try $2600/mo for a mortgage, on a house that’s underwater and sinking fast, plus taxes and maintenance… Owning should almost never be more expensive than renting, that should be in every grade school social studies class!!

    Oh, and pay off CCs? That makes a lot of sense, except for the fact that millions of jobs around the world rely absolutely on Americans _not_ doing that, tens-to-hundreds of thousands of them in the USA. Didn’t he hear the news? Thrift and sobriety are unAmerican!!! SPEND SPEND SPEND and leave the bills to the grandkids, they’ll have a war soon enough and all will be swept clean anyway…

    Sweet Zombie Jesus…

  4. zell says:

    Thank you BR. Just threw in the towel on TWX. What is now being missed by many pundits is that we are not in a Bear Market per se, but are in the early stage of a paradigm shift that will be with us for a decade or two. Investors soured on stocks in the 70′s but that is nothing compared to the fundamental changes our society is barely starting to experience. Underpinning economic fundamentals is the psycho-social framework in which we all live. The new frugality is an early indicator.

  5. beatstreet says:

    Let’s have a little love for Joe B. While the rest of the guys on that list have either faded into well-deserved obscurity, or have lost their jobs, or have continued to encourage the public to throw money at our Ponzi-like stock market, Joe B has been on target with his economic and market calls for the last couple of years.

  6. Of all those people, Rukeyser should have known better. I laugh at anyone who takes The Money Honey seriously. She is nothing but a shill. I have to wonder how much of a “pump and dump” game a lot of those people were/are playing.

  7. bonghiteric says:

    A week or so off-topic, but IMHO Equity Private’s rebuttal to your post on the death of the Chicago School was overly defensive, pretentious as hell and I think missed your point.

  8. phb says:

    Does Ken Fisher’s multiple misses (2002, 2004, 2007, 2008) count as embarrassing? He does write a column for Forbes…

  9. Rusty says:

    This list couldve gone on forever…anyone notice how battapaglia went from being Joe the Bull to Joe the Bear? His pendulum swings too far both ways methinks

    in the meantime, my moneys on Johnny Upside



  10. willid3 says:

    maybe they were drinking too much of the cool aide?

  11. JMH says:

    I believe what we are observing as the bubble tide goes out are the many diplomas from the College of Naked Emperors… I have suggested in other posts that most business TV hosts are not to be considered objective. Their primary function is to maintain the ratings of their respective programs. The correlation between an individual’s interest in their personal portfolio and the TV host’s interest is rather low. TV hosts are the custodial staff on campus. The faculty is populated by a large number of economists. There is a profession which has a very high tolerance for poor forecasting. Well, forecasting is extremely difficult. By why does the profession tolerate it?

    I have come to believe the subset of economists who appear on TV as “experts” all recognize that without each other to debate, there would be no market for their services, and therefore substantially reduced opportunities for those in the group. TV economists have a symbiotic relationship with media companies, but a rather parasitic relationship with the public (See: David Lereah) How is it that Martin Feldstein continues to appear on TV as an expert offering his thoughts about the economy when he has been on the board of directors of AIG since 1988? Why does he have any credibility at all? Of course there will be no accountability among the “faculty” of the CNE, as that would lead to the collective loss of their privileges…

    The student body of of the CNE is populated by future mutual fund managers, stockbrokers and other investment “advisers” who will happily talk to the public about the latest pronouncements from the oracles of the CNE for an asset management fee or a commission or both. As Jim Cramer says, “There’s always a bull market somewhere”, and clearly there are monotonically increasing returns for the staff, faculty and students of the CNE, who all are experts at “pretending to know.” Odd, Madoff offered monotonic returns, too.

  12. phb says:

    Granted it is just puffery, but ‘ol Kenny boy claims he has buoyant feet and no one seems to ever call him out on his BS claims. Plus I am sick of all his mail to my zip code…

  13. CPJ13 says:

    Fisher has been sending me material incessantly for the past two years, trying to get me to let him manage my money. They’ve got sales reps that literally call every six months, to the day. First time I spoke with the guy and did a little research, I decided I wasn’t going to bite because of how badly he whiffed on a couple key predictions in 04 and 05. Not what the rep wanted to hear. I wonder how they did last year…

  14. call me ahab says:

    everyone has to go to the link left by Rusty @ 10:37AM- what a freakin’ riot! I laughed my a$$ off!

  15. VennData says:

    “I will run the TARP for free” — Bill Gross, PIMCO (9/25/2008)


    Costs to run TARP Expected to Jump (1/7/2009)


  16. jwc says:

    I refuse to watch anyCNBC program that has Larry Kudlow on it. None. If he comes on during the day, I turn it off. He was a Republican polly anna shill – when Bush was president and you can see that he will be a “Bad Obama will ruin the economy” Republican shill now.

    And yes, I realize that CNBC is entertainment only, not facts. But some of the anchors are pretty decent and funny, especially in the morning.

  17. DL says:

    Look at the bright side: these guys make life a little easier for the short-sellers.

  18. constantnormal says:

    meh — shooting fish in a barrel. Not much sport in that, or skill, or anything to be learned. If you look at the body of statements ANY public person has made, you can find outlier instances where they look like idiots.

    I’ve certainly made such (despite being a definitely non-public persona), and I suspect that everyone here has as well, including BR.

    The test is to look at the body of a person’s statements, and see how they hold up. Using that metric, many of those quoted still come off as fools, but others (like Ruckeyser, who merely mistook the dot-com collapse for another 1987-style quick and deep dunking) look not so bad in the totality of their work.

    I’ll go ahead and make a potentially stoopid statement now: If you accept that the global equity markets reflect the growth of the global economy, then given the soaring growth in population, and the rise in the emerging nations, then over the longer term, we should see global equities markets do quite well, providing that the explosion of people does not overwhelm the capacity of the planet at our current technology levels, and drive the world into a Malthusian collapse.

    There. Did I include enough equivocation?

  19. scepticus says:


    What matters for economic growth is the population growth rate, not the absolute pop numbers. Right now the growth rate is slowing even as we continue to add more billions to the world pop. See here


    Japan and europe are already beginning to decline and the rest of asia moving into to a stage 3 demographic transition. World population is forecast by the UN to peak in 2050, which requires significant moderation in growth rates between now and then. If the pop growth rate is slowing between now and then, then so will the component of economic growth that is a result of population expansion.

    We’ve pretty much had the demographic dividend from increasing population, from now on its downhill in terms of absolute GDP, especially for the developed nations. Add in labor arbitrage and you end up with a very unpleasant future…

  20. Struggling Man says:

    I had no idea Larry Kudlow was an economist until I saw reference to that effect here (BP).

    I have not seen his show in years as it is not part of my current cable package.

    That guy is scary.

  21. Ben W says:

    The bottom line is, you can never trust any of the talking heads, and especially ones (like Kudlow) with political agendas. They are there for pure entertainment. The only people that I take with a grain of salt are those who have consistently proven successful in their views, and back them up by looking at history and understanding the fundamentals of the marketplace. This would lead one to follow people like Jim Grant, Marc Faber, Peter Schiff and Jim Rogers. While the timing of all of these guys isn’t necessarily always perfect (I challenge anyone to always time things perfectly), their overarching philosophy is consistent and they have a good historical basis for making their investments. A lot of it is based on their views on monetary policy (http://socialistsatthegate.blogspot.com/2008/12/dollars-are-no-panacea.html) and fiscal policy (http://socialistsatthegate.blogspot.com/2009/01/obamas-job-creation-in-abstract.html), which I strongly agree with.

  22. BG says:

    I’m with “beatstreet” on Joe Battipaglia. IMO, Joe does not belong in this list; because, some that are listed are pure dog shit! (And you can start with the one mentioned directly above.)

    I respect Joe B as a person who stands his ground and clearly speaks his mind. (No mumble mush BS from Joe.) He is one of few that will not back-down to the pressure of others playing to a hidden agenda or particular view.

    I respect Joe and I respect his words of advice. That doesn’t mean he is always right. I think Joe is an honest man with principles. That’s more than I can say for 95% of the others on this list.

  23. leftback says:

    I like Joe Baggadonuts too. Anyone can be wrong but at least he is honest enough to admit it. The rest of the crowd quoted are not in the same class. Abby Jo is my favorite mindless forecaster. I think GS have her in the attic now.

    Predictable pullback today in the bear market rally. I was net short overnight and sold my FAZ at the close.
    I reloaded with some favorites; COP VLO GDX SLW and AA. Holding some QID overnight, but expecting a rally off 905 tomorrow – or at worst a revisit to 890.

  24. Chuck Ponzi says:


    I would only agree partially because the overlying “value” is based on monetary growth (unless you’re talking inflation adjusted). You can have nominal growth with even zero or negative real growth.

    Any way you look at it, unless there is real growth, it’s a Ponzi. The whole world is.

  25. mark mchugh says:

    Okay, so I’m a sucker for a redemption story. Joe Batt, who was as wrong could be in 99-2000, picked himself up, dusted himself off and went back to work. I am sure he’s embarrassed by his past, but I also believe that it has made him a diligent, thoughtful analyst. He is worth listening to, and that’s as high a compliment as I can give an analyst.

    Way to go, Joe.

  26. constantnormal says:

    @ scepticus — OK, but there is also the transition of large numbers of emerging nations from rural agrarian societies into modern trading economies. I suspect that this will offset the slowing of population growth. It is really the growth in the global velocity of money that matters, and trading economies move a lot more money than rural agrarian economies (city folk spend a lot more money than their country cousins).

    That means more demand for goods and services, and more vibrant economies, leading to stronger equities markets. The larger picture is still up. This is not to say that we’re not gonna take a drubbin’ here for several years, as the old dying companies try hard to die (even if the Fed and Treasury say that no sparrow will fall on their watch). But at some point, the long term upward trend of global equities will resume.

  27. ben22 says:

    @ JMH

    How is it that Martin Feldstein continues to appear on TV as an expert offering his thoughts about the economy when he has been on the board of directors of AIG since 1988?

    Exactly, and I thought I heard today he was one of a handful of economists that congress will be looking for some direction from.

    That said, this post is lame, you could probably find just as many stupid quotes in say, 82, from bears. Nobody gets them all right.

  28. scepticus says:

    @constantnormal, what about the boomer retirement wave that is about to break over most of the developed world and reduce our workforce significantly while at the same time increasing the social benefit load? Look at the germans and japanese – they have no domestic demand since they are all saving for retirement or supporting the elderly. Their economies are only sustained by exports, yet are still generally stagnating (germany) or contracting (japan) even as per-capita goes up . Nations like the US and UK that have not retained a significant manufacturing base can be expected to contract. Even germany and japan will find it difficult to sustain exports at current levels as BRIC capabilities improve.

    You seem to make the assumption that western growth will remain steady while emerging market growth powers ahead. If the emerging economies are going to ‘emerge’, they shall do so at our expense via labour arbitrage resulting in reduced overall growth from the pattern of the last 20 years. Many of our jobs will continue to go to BRIC (and our savings – since only in BRIC will they get a good return), the new BRIC workers migrating from the rural areas will be supported by food and material from the least developed nations – witness chinese investment and creeping political influence in africa.

    So all things being equal, I see at best an anemic and patchy worldwide growth, or more likely a sustained contraction up to the pop growth inflexion point between 2025 and 2050, either of which will result in a series of rolling recssions that will destroy the remnants of the current financial infrastructure, the likely outcome of which will be a sudden socialist lurch in western economies, the beginnings of which we can see already. Afterwards, when the world population as a whole begins declining, it’s anybody’s guess as to what will happen.

    From the link I gave above:

    ” Some demographers now predict that not only will there be a major shift in the balance between young and old that will affect the pattern of savings and investment, but also that fast population growth that started in the eighteenth century will come to a halt sometime in the twenty-first century.

    This, in effect, will signal the end of the Great Age and will sound the death knell of three hundred years of economic theories that have been predicated on population growth as a constant in society.”

    Slowing/declining population growth is the white elephant in the room here – people (especially economists) talk about it alot but then generally ignore the implications, since they have no idea what to do about it and no experience of anything else.

  29. scepticus says:

    @Chuck Ponzi: you’re right of course. We can sustain monetary growth in the absence of GDP growth, just to keep the ponzi alive for a little longer. After all, that what’s been going on for the last eight years, and that’s what the Fed is trying to do. However it is doomed for many reasons one of which is the demographic wave.

    Even if constant is right and aggregate world GDP growth remains sufficiently in positive territoty to keep the ponzi going, I’m thinking we’d need a one world currency since otherwise we’d have a situation where some zones/currencies (BRIC, 3rd world) can sustain the ponzi and some can’t ($,Eur,yen). How the hell would that work I wonder.

  30. lburgler says:

    Didn’t Barry Ritholtz say he didn’t think Lehman was a zero?

    And that we should buy it at 10 and sell it at 30?

  31. lburgler says:

    Good thing I didn’t do that, either.