We evaluate here the market commentary of Jim Puplava at Financial Sense Online for February 2002 (the earliest available) through October 2005, at which point he stopped posting regular written commentaries archive. Jim Puplava is president of of Puplava Financial Services Inc., an investment advisory and money management firm, and Puplava Securities Inc., a broker-dealer. He is also the host of Financial Sense Newshour. 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:
- Jim Puplava has been generally very negative on the U.S. economy and U.S. equities over the period of evaluation. Following his advice, a prudent investor would probably have avoided most U.S. equities. See especially his market-bottom comments of 10/16/02 (another 4 to 9 years to reach bottom), 2/18/03 (the S&P 500 index should fall to 350) and 3/18/03 (warning of pending market implosion).
- He continually forecasts dire outcomes for the U.S. economy (such as stagflation and hyperinflation).
- In contrast, Jim Puplava has been generally positive regarding gold, commodities and energy throughout much of this period. Because the sample is small, we include forecasts these forecasts.
- Jim Puplava’s sample size is small, so confidence in the measurement of his accuracy is low.
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: Jim Puplava via Financial Sense | 5-Day Return | 21-Day Return | 63-Day Return | 254-Day Return | |
| 3/21/05 | The average investor should be on the alert that the financial landscape is changing. It is time to look for a financial parachute… A rise in volatilities is next as is a broadening stock market top. | -1.6% | -3.9% | 2.8% | 10.0% | + |
| 3/14/05 | It is…a good time to be an energy investor. As to those skeptics that keep waiting for $20 oil, the world is passing you by. It is time to recognize that a new bull market has begun. It is time to revalue and compare the returns offered on traditional equities to the returns offered on hard assets. It is also time to reallocate your portfolio. | -1.9% | -2.7% | -0.7% | 8.2% | + |
| 3/7/05 | For investors it is time once again to become cautious. Investors must contend with all of the vagaries and untruths of the markets and corporate earnings. | -1.5% | -3.4% | -2.4% | 3.8% | + |
| 2/28/05 | As the Fed withdraws liquidity from the financial markets, the major averages will continue to struggle until eventually they fall. The cyclical bull market in equities is close to peaking, if it hasn’t already. High beta stocks, low quality bonds, and emerging market debt are the most vulnerable. | 1.8% | -1.8% | -0.5% | 7.1% | – |
| 2/14/05 | Today’s market complacency is about to be challenged. | -1.8% | -1.5% | -4.3% | 6.9% | + |
| 2/7/05 | [Investors] have learned nothing from the bursting of the stock market bubble. Like sheep surrounded by wolves, they are about to get sheered again. | 0.4% | 0.4% | -2.5% | 5.2% | + |
| 1/31/05 | It is possible that stocks will head higher in the short run. The financial markets should start to see signs of duress in widening credit spreads and in lower stock prices. | 1.7% | 2.4% | -2.1% | 7.6% | + |
| 1/24/05 | …resource stocks…are in a new bull market…we are likely to head into a recession in the next 12 months. This is the time that commodities outperform nonresource equities and bonds. | 1.5% | 2.3% | -1.0% | 9.5% | – |
| 1/10/05 | …the markets are heading into another financial storm. Meanwhile, the financial markets are asleep with complacency. | 0.5% | 0.1% | -0.8% | 8.0% | – |
| 1/3/05 | The markets and the economy are no longer allowed to cleanse themselves of excesses and heal themselves. When we reach the breaking point some time this year, the Fed and the government is going to throw everything but the kitchen sink at the problem… This will be the beginning of The Great Inflation. | -1.0% | -0.7% | -2.2% | 5.9% | – |
| 10/29/04 | Today sector weightings are once again trading places. Basic materials and energy are on the rise. | 3.2% | 3.9% | 3.6% | 6.4% | + |
| 1/26/04 | We are once again at a place of complacency not seen since the bull market highs of the late 90’s… the stage is being set for an even a larger storm ahead, perhaps later this year but most certainly by next year. | -1.7% | -1.0% | -1.3% | 1.7% | + |
| 12/8/03 | …the price of gold and silver equities is outperforming all of the major averages. | -0.1% | 5.9% | 6.7% | 11.1% | + |
| 12/1/03 | At the moment it appears that stock prices could head even higher into bubble territory. Valuations remain absurd. | -0.1% | 3.9% | 7.4% | 11.3% | + |
| 11/18/03 | The stock market is extremely overvalued and back in bubble territory. | 1.9% | 5.3% | 10.9% | 13.8% | – |
| 11/3/03 | …we still remain bearish. All of the malinvestments of the previous boom have yet to be liquidated. The Fed has merely postponed the day of reckoning not eliminated it. | -1.1% | 0.5% | 7.3% | 10.1% | – |
| 10/29/03 | At a time when the price of most stocks are soaring and valuations border on the ridiculous, very few bargains exist in the market. | 0.4% | 1.0% | 8.2% | 7.9% | – |
| 10/6/03 | Investors are ignoring the warnings and instead are acting with complete abandon, oblivious to the risks they are taking. This puts in play–from a Dow Theory perspective–the perfect set up for the next stage of the bear market to unfold where the greatest damage to stocks is done…investors would be far safer staying with the primary trend of the market rather than trying to constantly trade the secondary reactions. | 1.1% | 1.8% | 8.5% | 8.5% | – |
| 7/28/03 | The recent rally has gotten way ahead of even the most optimistic expectations with stocks now sporting bubble valuation in almost all indexes. | -1.4% | 0.0% | 3.7% | 10.6% | + |
| 7/23/03 | Earnings have improved year-over-year as a result of cost cutting (job layoffs) but not enough to justify today’s sky high valuations that make 1929, 1966, and 1987 look like bargains. | -0.1% | 1.5% | 5.7% | 10.7% | – |
| 7/2/03 | …there is no evidence of a strong economic recovery despite massive amounts of new debt added to the financial system and within the economy…we should be experiencing a full gale by October or even as soon as September…unless you are a professional trader, and thoroughly familiar and a master of technical analysis, you don’t belong in this market. | -0.5% | -1.4% | 0.2% | 12.5% | – |
| 6/18/03 | …our financial markets have become one giant casino where professionals and amateurs alike are encouraged to speculate…the bubble is back. | -3.4% | -1.7% | 1.9% | 12.3% | + |
| 6/2/03 | …the market’s defying activity…has taken both sentiment and valuations back to the extreme. | 0.9% | 1.6% | 3.7% | 15.5% | – |
| 5/14/03 | I have been surprised at the degree of speculation and foolishness I have seen on the part of institutions and fund managers this quarter. It is almost as if I lived on Mars…valuations, despite three years of falling stock prices, are still at extreme levels. | -1.7% | 5.3% | 5.4% | 15.4% | – |
| 5/1/03 | The day of reckoning is upon us. The end result will be deflation in all things associated with credit that have become bubbles, most notably stocks, real estate, consumer goods. | 0.4% | 5.5% | 7.8% | 22.2% | – |
| 4/23/03 | …what is now going on in the financial markets is nothing more than a frenzied trading rally within the context of a larger bear market, which has yet to unfold… If you are an experienced trader…there is nothing wrong with trading these rallies… If, on the other hand, you spend less time making your investment decisions than you do shopping for new tires, you shouldn’t be operating in this market. | -0.2% | 1.4% | 7.5% | 23.6% | – |
| 4/7/03 | This appears to be nothing more than a trading rally based on perception and hype. If you are an adept trader, then trad[e] the exchange listed funds… If you are a long-term investor, I would stick with the trend in “things” and especially commodities. | 0.6% | 5.6% | 14.1% | 29.5% | – |
| 3/31/03 | What investors should keep focused on is the coming bad news on earnings, which I believe will be far worse than expected…the markets in the end will have their way. | 3.7% | 8.1% | 15.1% | 33.5% | – |
| 3/24/03 | …intervention will keep the markets from going through a drawdown. | -1.9% | 6.3% | 15.2% | 28.3% | – |
| 3/18/03 | Our markets hang by a narrow thread that threatens to implode. I suggest you find a safe harbor and batten down the hatches. | 1.0% | 1.6% | 16.7% | 28.1% | – |
| 3/10/03 | …expect a fast and furious rally to follow if all goes well in the early days of fighting. While financial assets rally, hard assets will fall. | 6.8% | 8.8% | 22.3% | 37.1% | + |
| 2/26/03 | [Stocks] can only viewed as cheap if you use your wildest imagination…they are still far from being a bargain. At the bottom of bear markets you will find stocks selling at 5 to 7 times earnings. Dividend yields will be higher than Treasury bond yields and will be selling at less than book value and annual sales. | 0.3% | 5.0% | 15.0% | 39.7% | – |
| 2/18/03 | This market has become a casino driven by large players and technical trading. There is nothing in the realm of fundamentals that can help explain the market’s rise…the bear market in stocks still has a long way to go before we hit bottom, which should take the S&P 500 down to the 350 level. | -1.5% | 2.7% | 10.9% | 34.4% | – |
| 10/22/02 | We are still in a bear market no matter what kind of spin comes out of Wall Street. The current rally is nothing more than a minor reversal trend in a primary bear market. | -0.9% | 2.7% | -1.3% | 15.6% | – |
| 10/16/02 | History would suggest we might have another 4 to 9 years before we reach bottom. How will investors know when a bottom is reached? When everyone is out of their mutual funds and when the industry has shrunk to a shadow of its former size, when dividend yields are at 6-7%, PE multiples are down to 7, and nobody you know will admit owning a stock or mutual fund… | 4.2% | 5.1% | 6.8% | 21.5% | – |
| 9/4/02 | …the S&P 500 would have to drop in half from here just to get back to normal, much less become cheap. What is coming is a consumer led recession that will be added to the profit recession giving us a full-blown recession. | 1.8% | -8.3% | 4.6% | 15.5% | – |
| 8/21/02 | …the markets are providing you with two opportunities. The first is to get out of your overvalued stock positions, and the other is to pick up undervalued gold and silver stocks before they explode in their next route up. | -3.3% | -11.0% | -5.2% | 4.7% | + |
| 8/7/02 | The media is calling it “a bottom,” which is one more reason that it won’t be…it is doubtful that we are anywhere near a bottom. | 4.9% | 2.0% | 3.6% | 11.8% | – |
| 8/2/02 | We are in a bear market whose primary trend is down. It is that simple. We are still a long way off from stocks becoming cheap. If you want cheap, look at the energy sector, which is what Warren Buffett is doing. | 5.1% | 1.6% | 3.1% | 11.9% | – |
| 7/31/02 | …the economy is likely heading back toward a recession. What investors may have to understand at this point is they have been afforded one more opportunity to get out of stocks. | -3.8% | 0.7% | -2.3% | 7.8% | + |
| 7/23/02 | …we are in transition from a bull market and a booming economy to a bear market and a depression… The only bubble left is the housing market and even that is on a shaky foundation of debt. …get into cash and be content with what you have left. | 13.2% | 19.0% | 10.9% | 25.2% | – |
| 7/16/02 | Stocks are simply overpriced. It is that simple. | -11.5% | 2.1% | -7.3% | 10.3% | + |
| 2/13/02 | With earnings news so horrific, Wall Street and their partners in the media have now turned toward hyping the economic numbers. Without the spin of lower interest rates and earnings, investors have no reason to buy stocks. | -3.4% | 4.3% | -1.9% | -23.9% | + |
