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The Market Observers Who Cry Wolf
The Market Observers Who Cry Wolf
The financial press loves to feature outlandish predictions, the wilder the better. More often than not, journalists act as cheerleaders for Wall Street (that's especially true when featuring buy-side analysts, without questioning their motives). But once in a while, the press publishes bearish claims. The point of these alarmist articles isn't accuracy, it's to create a good storyline. Sure, everyone knows these prophets of gloom are full of it (i.e. their investment advice is about as valuable as a fortune cookie's), but their claims usually bring lots of clicks. Why? For the same reason people slow down to look at car crashes!
The permabears themselves don't mind being so publicly exposed as Chicken Littles, as they get to peddle whatever they are selling (newsletters, websites, books, hedge funds) in the meantime, before they inevitably get proven wrong. And even then, there's usually no such thing as bad publicity for these inaccurate prognosticators!
Here are some examples taken from Michael Johnston's compilation on the Fund Reference (the site is now unfortunately defunct):
02-Jul-10 [Dow at 9,686] – Robert Prechter: 300-Year Crash (Dow To 1,000)
02-Jul-10 [Dow at 9,686] – Robert Prechter: 300-Year Crash (Dow To 1,000)
15-Jul-10 [Dow at 10,359] – Charles Nenner: Dow Headed To 5,000
15-Jul-10 [Dow at 10,359] – Charles Nenner: Dow Headed To 5,000
11-Feb-11 [Dow at 12,273] – Brady Willett Says 'Sell'
11-Feb-11 [Dow at 12,273] – Brady Willett Says 'Sell'
11-Mar-11 [Dow at 12,044] – Charles Nenner: Major War In 2012 = Market Crash
11-Mar-11 [Dow at 12,044] – Charles Nenner: Major War In 2012 = Market Crash
01-Aug-11 [Dow at 12,132] – Michael Sincere: Drop Of 10% Or 15%
01-Aug-11 [Dow at 12,132] – Michael Sincere: Drop Of 10% Or 15%
19-Aug-11 [Dow at 10,818] – Bill Strazzullo: Dow 9,000 Possible
19-Aug-11 [Dow at 10,818] – Bill Strazzullo: Dow 9,000 Possible
12-Sep-11 [Dow at 11,061] – Harry Dent: Dow Could Crash To 3,000 In 2013
12-Sep-11 [Dow at 11,061] – Harry Dent: Dow Could Crash To 3,000 In 2013
17-Jan-12 [Dow at 12,482] – David White: Dow Headed Back To 7,000
17-Jan-12 [Dow at 12,482] – David White: Dow Headed Back To 7,000
21-Sep-12 [Dow at 13,579] – Paul Farrell: Stock Market Will Lose 20% By 2016
21-Sep-12 [Dow at 13,579] – Paul Farrell: Stock Market Will Lose 20% By 2016
25-Oct-12 [Dow at 13,104] – Grady Means: Crash On March 4, 2014
25-Oct-12 [Dow at 13,104] – Grady Means: Crash On March 4, 2014
08-Jan-13 [Dow at 13,329] – Harry Dent: Market Crash In Summer 2013
08-Jan-13 [Dow at 13,329] – Harry Dent: Market Crash In Summer 2013
28-Mar-13 [Dow at 14,579] – David Stockman Warns About The Dangers Of American Capitalism
28-Mar-13 [Dow at 14,579] – David Stockman Warns About The Dangers Of American Capitalism
11-Jul-13 [Dow at 15,461] – Terry Burnham: Dow Will Fall To 5,000
11-Jul-13 [Dow at 15,461] – Terry Burnham: Dow Will Fall To 5,000
18-Oct-13 [Dow at 15,400] – Mark Hulbert: Another Crash Is Inevitable
18-Oct-13 [Dow at 15,400] – Mark Hulbert: Another Crash Is Inevitable
20-Dec-13 [Dow at 16,221] – Paul Farrell: 98% Risk Of 2014 Stock Crash
20-Dec-13 [Dow at 16,221] – Paul Farrell: 98% Risk Of 2014 Stock Crash
03-Mar-14 [Dow at 16,168] – Harry Dent: Dow At 6,000 By 2016
03-Mar-14 [Dow at 16,168] – Harry Dent: Dow At 6,000 By 2016
19-Mar-14 [Dow at 16,222] – Charles Nenner: Dow Jones Will Fall To 5,000
19-Mar-14 [Dow at 16,222] – Charles Nenner: Dow Jones Will Fall To 5,000
10-Apr-14 [Dow at 16,170] – Marc Faber: Market Crash In 2014
10-Apr-14 [Dow at 16,170] – Marc Faber: Market Crash In 2014
21-May-14 [Dow at 16,533] – Terry Burnham: Dow 5,000
21-May-14 [Dow at 16,533] – Terry Burnham: Dow 5,000
01-Aug-14 [Dow at 16,493] – Mark Cook: A 20% Collapse Is Coming
01-Aug-14 [Dow at 16,493] – Mark Cook: A 20% Collapse Is Coming
30-Sep-14 [Dow at 17,043] – Charles Nenner: Major Collapse In 2018
30-Sep-14 [Dow at 17,043] – Charles Nenner: Major Collapse In 2018
10-Jun-15 [Dow at 18,000] – Mark Cook: 4,000-Point Dow Drop
10-Jun-15 [Dow at 18,000] – Mark Cook: 4,000-Point Dow Drop
Postscript: Needless to say, all of these dire predictions turned out wrong. I guess it was bad luck to make them during one of the longest running bull markets in history.
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