We evaluate here the market commentary of Ben Zacks over the period June 2002 through January 2005. Ben Zacks is a co-founder of Zacks Investment Research and Senior Strategist and Portfolio Manager at Zacks Wealth Management Group. Since January 2005, Zacks.com has discontinued making his regular commentary publicly available (and removed his past commentary). The table below quotes forecast highlights from the cited source and shows the performance of the S&P 500 Index over various numbers of trading days after the publication date for each item. Grading takes into account more detailed market behavior when appropriate. Red plus (minus) signs to the right of specific forecasts indicate those graded right (wrong) based on subsequent market behavior, while red zeros denote any complex forecasts graded both right and wrong. We conclude that:
- Ben Zacks relies mostly on the aggregate corporate earnings trend to forecast the direction of the market. However, market indices can be slow to respond to aggregate earnings changes. He is not notably accurate in predicting earnings trends.
- With respect to market timing, Mr. Zacks recognized the market bottom in late 2002 but was slow by several months in committing to the 2003 upswing. On short to intermediate term calls, he is sometimes right and sometimes wrong.
- Ben Zacks’ forecast sample size for is small, so confidence in the measurement of his accuracy is low.
- The source of Mr. Zacks’ public commentary has been discontinued.
See Guru Grades for a snapshot of the accuracy of various experts in predicting the direction of the U.S. stock market, including links to evaluations of the commentaries of other individual market pundits and gurus.
| S&P 500 Index | ||||||
| Date | Comments from: Ben Zacks via zacks.com | 5-Day Return | 21-Day Return | 63-Day Return | 254-Day Return | |
| 1/19/05 | …the market will now stay in its new trading range for some time…investors’ emphasis will move to the large-cap multi-nationals. | -0.9% | 1.4% | -2.7% | 6.7% | + |
| 12/14/04 | …the market will maintain a firm upward bias into year-end, as it carves out a new higher trading range between 1,140 and 1,200 on the S&P 500, but after the first week of the New Year, profit warnings and macro-economic issues could put pressure on the market indices. | 0.5% | -0.4% | 1.0% | 5.6% | + |
| 11/1/04 | Expect…intensifying pressure on earnings. | 3.0% | 5.4% | 4.5% | 7.5% | – |
| 9/29/04 | …declining earnings growth trends will balance out the positive to produce a sideways bias for the foreseeable future. | 2.4% | 1.1% | 8.9% | 10.2% | – |
| 8/30/04 | Investors who were thinking of lowering their equity exposures should do so immediately… | 2.0% | 1.4% | 7.6% | 11.0% | – |
| 7/21/04 | Zacks…doesn’t see much to jump-start the situation in the near-term, and is instead looking for a pick-up during the “back to school” season. | 0.1% | -0.2% | 1.8% | 12.8% | + |
| 6/17/04 | Ben Zacks…doesn’t see much in the near-term that would continue to propel the averages higher. | 0.8% | -2.8% | -1.0% | 7.4% | + |
| 5/10/04 | The prospects of rising interest rates and inflation and the unpredictability of the Iraq occupation and terrorism represent the wall of worry… All of those factors, combined with concerns for slowing earnings growth throughout the rest of the year stand in the way of the market moving higher. | -0.3% | 4.1% | -2.0% | 6.6% | + |
| 2/25/04 | All of this uncertainty calls out for a more defensive posture… Zacks expects the market will correct to the tune of at least 5%. | 0.6% | -3.0% | -4.2% | 5.2% | + |
| 12/1/03 | The economic growth story remains compelling. | -0.1% | 3.9% | 7.4% | 11.3% | + |
| 10/27/03 | …stocks are reasonably valued with the exception of some small cap growth stocks that have run away… | 2.7% | 2.2% | 11.0% | 9.6% | + |
| 10/8/03 | …stocks should be higher by the end of the month…remain fully invested… | 1.3% | 2.3% | 9.0% | 8.5% | + |
| 9/15/03 | …stocks are fully valued on an earnings basis…money is likely to flow into equities. | 0.8% | 3.4% | 5.6% | 11.2% | + |
| 8/11/03 | …right now is an excellent time to buy the dip, and this pullback represents a strong opportunity to get fully invested. | 2.0% | 3.1% | 7.9% | 8.6% | + |
| 7/9/03 | …fiscal and monetary factors will drive money toward equities…we expect stocks to continue to move higher in the near term, and while we remain skeptical in the intermediate to longer term, [we do] not foresee a near term breakdown | -0.8% | -2.8% | 3.2% | 11.3% | – |
| 6/12/03 | …the market needs to take some time to digest the recent gains before moving further. | -0.4% | 0.5% | 1.2% | 13.5% | + |
| 5/23/03 | The news simply doesn’t show enough conviction to warrant a new, bullish era for the market…it’s always useful to have some cash on the sidelines to take advantage of new opportunities… Profit-taking would not be a bad idea… | 3.6% | 5.4% | 7.5% | 19.5% | – |
| 4/14/03 | He doesn’t see many reasons to be committing new money to the market…there is little reason to believe the market will be in any sort of extended uptrend. | 3.0% | 6.1% | 13.4% | 28.2% | – |
| 3/28/03 | …a cautious stance would be advisable until this news-driven market gets back to the fundamentals…move part of [your] portfolios into a cash position…the market [will] move mostly sideways… | 1.8% | 6.3% | 14.2% | 30.4% | – |
| 3/14/03 | The economy seems to be slowing in the near term…the market remains under constant pressure. | 7.5% | 6.2% | 19.8% | 34.9% | – |
| 2/21/03 | …weak employment growth, low consumer confidence and higher energy prices are likely to constrain retail sales… | -0.8% | 1.9% | 8.9% | 34.8% | – |
| 2/4/03 | …2003…is likely to remain very much a stock-pickers environment… | -2.2% | -3.1% | 9.2% | 34.7% | – |
| 12/10/02 | …while the indices are due for a consolidation move…we’ve likely put an intermediate term bottom in place. [Zacks] is optimistic on the rest of the fourth quarter and the start of 2003…now is the time to be fully invested. | -0.2% | 2.6% | -11.1% | 18.8% | – |
| 11/22/02 | In this environment, Zacks likes dividend yielding stocks. | 0.4% | -4.1% | -9.9% | 13.7% | – |
| 11/8/02 | …none of this is bullish for corporations. | 1.7% | 1.1% | -6.6% | 18.3% | – |
| 10/17/02 | …an incredible degree of uncertainty and a number of catalysts…threaten to create a very negative environment for the market. | 0.4% | 3.5% | 4.0% | 19.0% | – |
| 9/23/02 | Zacks thinks there is more damage to be done in a broad range of sectors… | -2.2% | 6.8% | 6.1% | 20.3% | + |
| 9/9/02 | …more disappointments may be around the corner…the only downside protection one can find is either to enlarge one’s cash position, or to take a position in a stock with a negative beta… | -1.3% | -11.6% | 0.4% | 12.6% | + |
| 8/2/02 | …we are likely in for an extended period of sluggish economic malaise…dividend bearing companies are likely to get a boost… | 5.1% | 1.6% | 3.1% | 11.9% | – |
| 7/25/02 | …most of the damage has been done…there may be a bit further downside from here, [but] we think that now is likely a good time to be buying stocks…the S&P 500 is likely to produce 10-12% returns over the next five years… | 5.5% | 12.2% | 6.1% | 18.0% | + |
| 7/12/02 | …we would rather be buying than selling. We noted [on 6/20/02] that there may be a bit more turbulence and downside, but we firmly believe that stocks will be higher a year from now. | -8.0% | -1.9% | -15.7% | 7.9% | – |
| 6/13/02 | [We suspect that] the disconnect between the markets and the economy will continue… | -0.3% | -9.1% | -9.9% | 0.2% | + |
