We have been recapping 2013 financial predictions over the past few weeks, and the message is clear: the finance pundits had a tough go of it this year. The prevailing sentiment heading into 2013 was caution, if not outright pessimism, which of course has not played out in the equity markets.
It wasn’t easy, but after sifting through all the prognostications, we have come up with four candidates for the Worst Financial Prediction of 2013. We’ll let you make the call on which is the worst through our voting widget below.
(1) Byron Wien: Gold will reach $1900/oz and S&P 500 will fall below 1300
As we discussed in a blog post earlier this month, Byron Wien of Blackstone had another woeful performance with his surprise predictions this year, going 1-for-10, bringing his total to 8-for-35 since we started tracking him in 2010.
Wien’s long gold/short S&P call could hardly have been more wrong, as the S&P is now trading above 1800 (up ~30%) while gold is hovering around $1200 (down ~30%).
(2) Gene Munster: Apple will release a television
Taken in isolation, this prediction from Piper Jaffray analyst Gene Munster was a perfectly reasonable one. Several other pundits we tracked predicted the same, and 48% of our users agreed that an Apple television was in the cards this year.
The reason that Munster’s prediction makes our Worst list is because he has made this prediction before…. again and again. In fact, starting in mid-2009 Munster has predicted an Apple television every six months or so and of course has been wrong each time. Lest you think we are exaggerating, here are the links to prove it: August 2009, March 2010, September 2010, June 2011, December 2011, May 2012, November 2012, March 2013, November 2013.
If Munster doesn’t win worst prediction this year, he may well be a candidate again next year as he has now pushed back his Apple television timeline to the first half of 2014. Regardless, he wins our first entry into the Broken Clock Hall of Fame.
(3) Harry Dent: Dow Jones Index will fall below 5000
Ever since his book The Great Crash Ahead was published in 2011, financial newsletter writer Harry Dent has been hitting the television circuits to sell his message of doom & gloom. His prediction that the S&P 500 would fall 30-50% in 2012 proved wildly wrong.
His prediction for 2013, that the Dow Jones would tumble below 5000, was equally bold and equally wrong. The Dow is at 16000 today. Could Dent simply be early? If so, we will be there to give him credit – we are still tracking his “Dow falls to 3000 by 2022” prediction on our site.
(4) Wall Street Analysts: S&P Price Targets
Here were the S&P forecasts of six bulge bracket firms at the start of each of the past three years.
Bank 2011 2012 2013
Average (Banks) 1378 1338 1543
UBS 1350 1325 1425
Barclays 1420 1330 1525
Credit Suisse 1250 1340 1550
Goldman Sachs 1450 1250 1575
JP Morgan 1400 1430 1580
Bank of America Merrill Lynch 1400 1350 1600
Actual 1258 1426 1818*
2011 2012 2013
Average Projected Rise 9.9% 6.4% 8.2%
Actual Rise 0.3% 13.4% 27.5%
The mean S&P estimate has been considerably off-target each year: by +960 basis points in 2011, -700 basis points in 2012, and a whopping -1930 basis points so far this year. Moreover, the clustering effect has been very pronounced, with five of the six analyst predictions each year falling within a 100 point range (1350-1450 in 2011, 1250-1350 in 2012, and 1500-1600 in 2013) – ranges which failed to capture the actual result in every instance. We discussed potential reasons for the errant clustering in a previous post. Regardless, given this performance, should we pay any attention to all the 2014 targets that are coming out lately?
Okay, those are the candidates – now it’s your turn to vote! We will reveal the “winner” on January 9.
Head over to our Finance section to make your own predictions for 2014 and see if you can crack our User Leaderboard. PunditTracker’s user voting platform aims to surface more “Nate Silvers” by allowing people like yourself to build your own public prediction track record. After all, with the financial ‘experts’ falling flat on their faces in 2013, shouldn’t they be replaced?
We will be adding plenty of new predictions as they come in over the next few weeks, so make sure to check back frequently. You can also see the profile pages for all the pundits discussed above, including a full breakdown of their predictions since we started tracking them.
- Did Byron (Wien) do Better in 2013? | Pundits and Predictions Blog | PunditTracker
- Reviewing Byron Wien's Predictions for 2012 | Pundits and Predictions Blog | PunditTracker
- UBS AG (US listing) (UBS), Bank of America Corp (BAC): Why 2014 Dow Predictions Aren’t Worth Your Time | Next iPhone News
- Stocks Crash Every Day, Markets Rarely Do...and Warnings are Dumb. | Trends... Find them, ride them and get off.Trends… Find them, ride them and get off.
- Hot Links: For your consideration… | The Reformed Broker