Firm / S&P 500 Target / Missed it by this much (%, as of 12.10.2013)

  • Wells Fargo / 1,390 / 29.7%
  • UBS / 1,425 / 26.5%
  • Morgan Stanley / 1,434 / 25.7%
  • Deutsche Bank / 1,500 / 20.2%
  • Barclays / 1,525 / 18.2%
  • Credit Suisse / 1,550 / 16.3%
  • HSBC / 1,560 / 15.6%
  • Jefferies / 1,565 / 15.2%
  • Goldman Sachs / 1,575 / 14.5%
  • BMO Capital / 1,575 / 14.5%
  • JP Morgan / 1,580 / 14.1%
  • Oppenheimer / 1,585 / 13.8%
  • BofA Merrill Lynch / 1,600 / 12.7%
  • Citi / 1,615 / 11.6%
  • AVERAGE / 1,534 / 17.5%
  • MEDIAN / 1,560 / 15.6%

Source: Above the Market


“He who lives by the crystal ball soon learns to eat ground glass.”

-Edgar Fiedler


Its that time of year again! All of your favorite prognosticators will soon be trotting out their favorite (albeit worthless) prognostications. You are advised to ignore them with extreme prejudice.

This has been a peeve of mine for quite some time, going back to “The Folly of Forecasting” and, more recently, “Get ahead of forecaster folly.” I was reminded of this courtesy of a commentary by Robert Seawright, chief information officer of Madison Avenue Securities. It had the delightful tongue-in-cheek title, “Missed It By *This* Much.”

Seawright notes that the “one forecast that is almost certain to be correct is that market forecasts are almost certain to be wrong.” His table, which I have reproduced here, reveals just how true that was for S&P 500 predictions in 2013. As of yesterday, the best of the major broker forecasts was only off by about 12 percent, the worst by 30 percent. All told the seers’ average miss was a full 17.5 percent.


Continues here


Category: 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.

6 Responses to “Why Do Forecasters Keep Forecasting?”

  1. constantnormal says:

    Look on the bright side — the ALL got the direction correct, not one was forecasting a market decline …

  2. ByteMe says:

    Be curious what Nate Silver could make of their numbers to figure out a composite prediction with better predictive value. Or is it just a mess with people using dart boards to pull numbers out of the air?

  3. [...] Why Do Forecasters Keep Forecasting? (Barry Ritholtz at Bloomberg View; also at The Big Picture) [...]

  4. george lomost says:

    If you fail, Barry will mention you in his blog. If you succeed you’ll get a following. If you don’t even try no one will know you exist.

  5. tippet523 says:

    And the guy or gal at Citi will crow about besting all other forecasters and get a 7 figure bonus.