We evaluate here the market commentary of Donald Rowe since June 2002, previously available via Zacks.com. Donald Rowe, Chief Research Director of the Carnegie Management Group. Mr. Rowe’s commentary for Zacks was discontinued as of May 2008. 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:
- Donald Rowe is one of the most bullish market pundits we have encountered, having predicting records for the DJIA and S&P 500 index in 2005 and proclaiming the next few years as U.S. equity investor paradise.
- With respect to market timing, Mr. Rowe was unequivocal but somewhat early in calling the strong 2003 advance. Neither 2004 nor 2005 nor the first half of 2006 lived up to his expectations. He has continually postponing “Liftoff” pending better behavior from oil prices and the Federal Funds Rate.
- Donald Rowe’s sample is modest, as is confidence in the measurement of his accuracy.
- As noted above, Donald Rowe’s commentary for Zacks has been discontinued.
Here is an additional note to augment the tabular forecast sample:
From Peter Brimelow in MarketWatch (12/24/09): “…puzzling is the survival of letters like Donald Rowe’s Carnegie Management Group (down 19.42% over 10 years)… [Down 24.4% in 2009.]”
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: Donald Rowe via zacks.com | 5-Day Return | 21-Day Return | 63-Day Return | 254-Day Return | |
| 5/2/08 | …I will be adjusting our portfolio of recommendations to capture maximum profits from a stock market rally that will surprise everyone. | -1.4% | -2.1% | -10.0% | -34.7% | – |
| 1/23/08 | Let’s stay fully invested! The stock market has a long history of impressive gains during election years. The market is oversold, undervalued, and testing support levels. I see a 22 percent move up this year after the January 30 cut rate. | 1.3% | 1.1% | 2.8% | -37.5% | – |
| 11/2/07 | …U.S. stock prices should move higher in November and December. | -3.7% | -3.1% | -8.5% | -36.9% | – |
| 8/27/07 | Stay fully invested! The U.S. stock market is the most oversold, undervalued stock market on the planet, with a global economic boom and bull market underway… Use this pullback to invest any remaining cash that you may have… I expect new highs in most stock market indexes by year end. | 1.5% | 4.0% | -1.8% | -11.3% | + |
| 7/13/07 | Stay fully invested! …expect 2007 to produce unusual profits in both the U.S. stock market. We are in the midst of a multi-year run-up in stock prices. I don’t see any serious problems until after…August 2008. | -1.2% | -6.4% | 0.6% | -19.8% | – |
| 5/4/07 | Record U.S. and global liquidity will continue to push stock prices higher around the globe. You should remain fully invested, with at least 50 to 75 percent of your portfolio allocated to our recommended global/international investments. | -0.2% | 1.7% | -2.2% | -7.2% | + |
| 3/26/07 | Record global liquidity, including record liquidity in the U.S., should keep stock prices in an uptrend during 2007. The market has given us another great buying opportunity. If you haven’t already, you should become fully invested immediately. The U.S. stock market is still substantially undervalued at 34 percent. | -0.9% | 4.0% | 4.5% | -8.5% | + |
| 3/12/07 | …the vast majority of the selling is over. The U.S. stock market is still substantially undervalued at 34 percent. If you haven’t done so already, you should become fully invested immediately. | -0.3% | 2.3% | 7.2% | -6.5% | + |
| 2/20/07 | Stay fully invested! …liquidity and money creation at current levels have never failed to create faster economic growth and move stock prices higher. Investors should focus on capturing profits from the 2007-2010 economic boom and bull market ahead. | -4.2% | -1.7% | 4.3% | -7.3% | – |
| 1/31/07 | Market volatility over fourth-quarter earnings will subside on/or about February 15, 2007, after which the market should move higher. The stock market is still undervalued by 28 percent. You should be fully invested. | 0.8% | -3.6% | 3.3% | -4.0% | – |
| 12/29/06 | The stock market is undervalued by 32 percent. Add more liquidity to the banking system and stocks should move much higher in 2007. | -0.4% | 1.9% | 0.4% | -0.5% | – |
| 11/21/06 | …continue to pare domestic equity holdings in favor of faster growing international equities. | -0.3% | 1.1% | 3.4% | 1.8% | – |
| 10/31/06 | Wall Street is waiting for the November election results. The next great bull market should be ready to unfold by early November. | 0.4% | 1.6% | 4.9% | 9.0% | + |
| 10/11/06 | …the market should be ready for a sustained move to new highs in the months ahead. …Donald Rowe will be adding investment positions during October to achieve a fully invested position before the market begins to move dramatically higher. | 1.2% | 2.1% | 5.5% | 14.0% | + |
| 9/20/06 | …the stock market will provide us with unusual profits this fall and well into 2007. …The next great bull market should be ready to unfold by mid-October. | 0.9% | 3.2% | 7.3% | 14.5% | + |
| 9/1/06 | A great boom and bull market will stun the experts this fall. …the stock market will provide us with unusual profits this fall and well into 2007. | -0.9% | 1.8% | 6.8% | 10.9% | + |
| 8/17/06 | A strong bull market rally this fall and well into 2007 is highly likely. | -0.1% | 1.8% | 7.4% | 12.8% | + |
| 7/26/06 | The smartest investment strategy now is to stand aside until tensions ease and allow the markets to bottom. Trying to pick a bottom in the midst of the worst Middle East conflict in many years is foolish. …Eventually, the bullish technical and fundamental position of the U.S. stock market will prevail and the most undervalued stock market on the globe will finally break out to new highs. | 0.8% | 2.2% | 8.6% | 14.7% | – |
| 7/12/06 | The stock market is still undervalued by 29%. We will not see current P/E levels again until the bear market and recession of 2010-2012. | 0.1% | 1.0% | 7.3% | 23.1% | + |
| 6/22/06 | Rowe and his team do not see a bull market unfolding until. | 2.2% | 1.2% | 6.4% | 20.9% | + |
| 5/8/06 | The great boom ahead (2006-2009) will be followed by a great bust during 2010-2015. There is very little downside risk to the U.S. stock market. | -2.3% | -5.2% | -3.4% | 13.5% | – |
| 4/7/06 | …expect a substantial move-up in stock prices between mid-April and August. | -0.8% | 2.3% | -2.3% | 12.1% | – |
| 3/13/06 | …expect a substantial move-up in stock prices between now and August. | 1.6% | 0.2% | -2.5% | 8.0% | – |
| 2/13/06 | With a stock market that is undervalued by more than 33 percent, a 30 percent move-up this year would still leave the market undervalued. Consider any pullback as a buying opportunity. | 1.6% | 3.2% | 2.2% | 15.3% | + |
| 1/16/06 | The market is still undervalued by 34 percent, so even a 30 percent move-up this year would leave the market undervalued. Consider any pullback as a buying opportunity. …2006 will be a super year for the economy and the stock market. | -1.3% | -0.2% | 0.2% | 10.9% | + |
| 12/27/05 | Liquidity levels are at record bullish levels. Add a 33% undervalued stock market and stock prices should move steadily higher between now and May of 2006. You will not see P/E levels this low again until the bottom of the next bear market recession, perhaps in 2015. Treat any pullback as a…buying opportunity. | 1.3% | 2.2% | 2.9% | 12.9% | – |
| 11/30/05 | The Dow could rally to Dow 13,000 by mid-2006, which would correct most of the current market undervaluation. Another great economic boom and bull market is unfolding now. | 0.6% | -0.1% | 3.2% | 12.8% | – |
| 11/16/05 | The market should rise at least 20 percent by May 2006-and it will still be undervalued. | 2.8% | 2.9% | 4.7% | 13.8% | – |
| 10/28/05 | …a great bull market lift-off is imminent! | 1.8% | 4.9% | 7.2% | 14.1% | + |
| 9/27/05 | Record liquidity and record stock market undervaluation will soon produce the greatest bull market of all time. | -0.1% | -2.0% | 4.4% | 9.9% | – |
| 7/25/05 | The greatest bull market in history will lift-off when the Fed stops raising short-term interest rates and/or oil prices begin a decline to lower levels. It is just a matter of time. | 0.5% | -0.9% | -4.2% | 2.8% | – |
| 7/13/05 | Rowe and his team are reiterating their forecast of a 35 percent move between now and May of 2006. | 1.0% | 1.2% | -2.9% | 0.9% | – |
| 6/29/05 | A 35 percent move between now and May 2006 is possible. The market may not lift-off until August or September, but a huge move will eventually unfold. | -0.2% | 2.9% | 1.3% | 6.7% | – |
| 5/27/05 | The market has been holding its gains well given the oil bubble, but it hasn’t clearly moved into the next bubble phase of more consistent momentum. Rowe thinks that will begin in the second half of April or, at the latest, in late-2005. Hence, investors should be buying stocks again, especially on short-term pullbacks… Hold what you have. | -0.1% | 0.2% | 1.1% | 7.3% | – |
| 5/4/05 | Over the next five years, investors will have numerous opportunities to more than double their wealth during the 2005-2009 bull market in stocks before the final top in 2010. At the moment, the economy seems to be slowing, which concerns investors, traders and Wall Street. Will the Fed continue to push Fed funds up to a level that will derail the recovery? …Fed Chairman Greenspan is too ambitious to create that scenario. | -0.4% | 1.7% | 5.8% | 12.7% | – |
| 3/31/05 | …the Dow Jones Industrial Average and the Nasdaq Composite will more than double from current levels before 2008. It will take a 28 percent jump in stock prices just to reach fair value if interest rates remain at current levels. The S&P 500 and the Dow Industrial Average could very easily move 25 percent higher by year-end. The stock market is not at a top…we will see Dow 20,000 sooner rather than later! | 0.9% | -2.0% | 1.8% | 9.9% | – |
| 3/2/05 | Investors are in the best position ever to multiply their wealth during the 2005-2009 economic boom and bull market. By 2007, all stock market indices will be at levels that you will not now believe because of the spending and investing power of the largest and wealthiest generation in American history… The sun is rising on the greatest bull market in history… The stock market may have bottomed on January 24. If not, history says we’ll see a market bottom before March 31. …real estate will continue to appreciate until probably 2008 or 2009. | -0.3% | -3.1% | -1.5% | 5.6% | – |
| 2/23/05 | …the stock market will bottom during the first quarter and both the Dow Industrial Average and the S&P 500 will move to new highs by mid-2005. Investors in the U.S. stock market will see a record-breaking year in 2005. | 1.6% | -1.6% | 0.3% | 8.7% | – |
| 2/9/05 | The market appears to have bottomed and is waiting for a catalyst. …mutual fund cash will flow into the market when fourth-quarter earnings reports are complete. With record corporate profits, record corporate cash, record liquidity and record undervaluation, the stock market will soon move dramatically higher. | 1.5% | 0.7% | -2.2% | 5.9% | – |
| 1/28/05 | The stock market will soar in 2005, but not until the Fed stops putting inflationary fears into stock market investors. The bond market, a much smarter group of people, knows that inflation is tame…there is too much liquidity, which will drive stock prices to relentless new highs during the greatest economic boom and bull market in U.S. history between now and 2009. | 2.7% | 3.3% | -2.4% | 9.4% | – |
| 1/19/05 | In 2005, investors in the U.S. stock market will see a record-breaking year. | -0.9% | 1.4% | -2.7% | 6.7% | – |
| 12/29/04 | …based on 120 years of stock market history, the 2005 market has the potential to return a 30 percent or better gain. | -2.4% | -3.5% | -2.6% | 2.9% | – |
| 12/23/04 | The U.S. stock market will outperform gold, bonds, real estate and all other investment sectors. Keep your money at home in the U.S. stock market. Do not invest in Europe or China. In 2005, investors in the U.S. stock market will see a record-breaking year. Small- and mid-cap stocks and the technology sector will lead this bull market to new high after new high in 2005. | 0.1% | -3.4% | -3.2% | 3.8% | – |
| 12/1/04 | The switch from the small-caps to large-caps will probably unfold by mid-2005. …the Great 2005-2009 Super Boom and Bull Market will unfold. | -0.7% | 1.7% | 1.6% | 6.2% | – |
| 11/9/04 | You should become fully invested as quickly as possible. The greatest bull market in history has already begun. The U.S. stock market will outperform gold, bonds, real estate and all other investment sectors. Keep your money at home in the U.S. stock market. In 2005, investors in the U.S. stock market will see a record-breaking year. Small- and mid-cap stocks and the technology sector will lead this great bull market to new highs in 2005. | 1.0% | 2.2% | 3.3% | 5.7% | + |
| 10/7/04 | We are very close to the lift-off of the greatest bull market of all time. The 2005-2009 Bull Market will rapidly produce new highs for all market indices. | -2.4% | 3.1% | 4.7% | 5.0% | + |
| 9/20/04 | We are close to issuing a buy signal for a few stocks, but we need higher volume and follow-through. Let’s be patient… I still expect a global economic boom. The yield curve is steep and that is always bullish for stocks. The stock market is 30 percent undervalued. | -1.7% | -1.7% | 7.2% | 7.8% | + |
| 9/2/04 | …the professional traders and the Smart Money will not invest money into the stock market on the long-side until after the successful adjournment of the Republican Convention. He is now planning his return to the market after what he feels will be a clear market bottom and staging point for the next rally. | 0.5% | 1.5% | 6.5% | 10.3% | – |
| 8/9/04 | …the stock market becomes more undervalued week after week. A big upside explosion of stock prices is inevitable. The next leg-up for this “mother of all bull markets” will probably begin very early in September. Between now and then, the risk on the downside is far greater than any upside opportunity… The long-term potential for global growth and above average profits from a great bull market are still enormous. | 1.3% | 4.8% | 9.1% | 15.4% | + |
| 2/27/04 | …the tax cuts of the last two years [will] encourage a very strong economic growth that will last at least until 2008. | 1.0% | -2.0% | -2.6% | 5.7% | – |
| 1/28/04 | …better-than-expected earnings in 2004 and 2005 should also boost the market’s valuation multiple and drive stock prices higher over the next two years, at least. | -0.2% | 1.5% | 0.9% | 4.7% | – |
| 1/6/04 | …low inflation, low interest rates, low taxes and high productivity will produce one of the greatest wealth-creation economic booms of all time. The vast majority of this wealth will be created by investing in the stock market and real estate…the first leg of this economic boom and bull market will last until at least 2009. …with a new, growth-minded Fed chairman in 2005…this next wealth building era could last 20 years or longer. | -0.2% | 0.4% | 2.4% | 5.6% | – |
| 11/25/03 | …late November and December will see a resumption of soaring stock prices. | 1.0% | 4.0% | 8.6% | 11.4% | + |
| 10/27/03 | Now is the time to be fully invested, …or risk being left out of a very impressive bull market. Investors and consumers who own stocks and mutual funds or those who participate in company or state government pension plans will feel far more financially secure…with the Dow Industrial Average at a record high of 12,000 by Election Day. | 2.7% | 2.2% | 11.0% | 9.6% | + |
| 9/29/03 | This powerful new bull market is being led by the small-cap technology stocks. | 2.8% | 4.0% | 8.9% | 12.4% | + |
| 8/27/03 | An extraordinary super economic boom is on the way! | 3.1% | 0.0% | 5.5% | 10.8% | + |
| 7/28/03 | The U.S stock market is still the best place to be! You should be fully invested. | -1.4% | 0.0% | 3.7% | 10.6% | – |
| 7/11/03 | Better-than-expected second quarter corporate profits should accelerate the flow of money into the stock market. | -0.5% | -1.8% | 3.6% | 10.9% | – |
| 6/24/03 | The five bull market makers are; the synergy of a falling U.S. dollar; record low interest rates; the third largest tax cut in history; record and still-rising liquidity from the Fed; and surprisingly strong first-quarter earnings. | -0.1% | -0.2% | 4.0% | 15.2% | – |
| 5/28/03 | …the easy money has already been made in the bond market. The U.S. stock market is the single best place to be. Stock prices will continue to rise during this 2003-2009 bull market, while bond prices will fall as inflationary pressures gradually rise! | 3.5% | 3.4% | 4.2% | 17.6% | + |
| 4/30/03 | After three years of decline, there are new signs of market strength, which are now appearing. This is exactly what the birth of a strong, new uptrend should look like. | 1.4% | 5.1% | 7.9% | 21.9% | + |
| 3/24/03 | Either one of these news stories [see prior entry] should produce a stock market bottom for 2003 and, most probably, for the decade. | -1.9% | 6.3% | 15.2% | 28.3% | + |
| 2/25/03 | …wait for the stock market to send its own Buy signal: 1) confirmed news that Hussein has accepted asylum, or 2) news that the United States and its allies have launched a full-scale attack on Baghdad. Either one of these news stores will trigger a triple-digit jump in the Dow Industrial Average. | -2.0% | 3.7% | 11.3% | 36.5% | + |
| 1/24/03 | …sit back and let the bears growl and prepare for the inevitable rise. | -0.7% | -2.7% | 5.8% | 31.0% | – |
| 12/31/02 | The market will be rising in January and in 2003. Stay Bullish! …watch rising M3 money supply growth produce faster GDP growth and a bull market in 2003-2004. | 3.4% | -2.7% | -2.4% | 27.6% | – |
| 11/30/02 | Stay bullish. | -2.6% | -6.0% | -10.8% | 13.7% | – |
| 8/23/02 | …capital spending should surge between now and year-end. Hold current positions with close stops. Wait for his Buy Signal. | -2.6% | -12.9% | -2.8% | 5.9% | + |
| 7/29/02 | …there is plenty of cash to fuel a raging bull market. However, let’s continue to be patient and wait for proof of the market bottom. | -7.2% | 4.0% | -1.8% | 10.2% | + |
| 6/19/02 | …a strong bull market lift-off will unfold in August or October after Wall Street’s big institutional buyers return from their summer vacations. | -4.6% | -16.9% | -14.4% | -3.8% | – |
