Individual Gurus

A reader asked: “What are your thoughts on Exhibit 1 (a stunningly accurate 10-year forecast from December 31, 1999) of Jeremy Grantham’s January 2010 Quarterly Report and its implications for Jeremy Grantham’s forecasting? Grantham is rather proud of it, and I am certainly impressed! Has Grantham published other 10-Year forecasts to compare with this one? My sense is that GMO constructed a 10-Year forecast every year, so there should be other forecasts. Do you know anything about the forecasting methodology? GMO appears to use regressions to compute baselines (for price?), compare current actuals to baselines and then forecast the difference to disappear as actuals revert to means.” Keep Reading

 A reader suggested that we evaluate the stock market forecasts of Charles Biderman, founder and CEO of TrimTabs Investment Research. The TrimTabs perspective “relies on the insight that price [of equities in aggregate] is a function of supply and demand and has nothing to do with value.” The predictions/recommendations evaluated here extend as far back as January 2000 and come from columns in Forbes.com, MarketWatch, CNN/Money and TheStreet.com. 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:

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A reader requested a review of the trading methodology presented at TimothySykes.com (“Short Selling Penny Stocks”), which essentially uses price-volume analyses in attempts to detect in real time penny stocks being pumped and ride the ensuing downside (dump). Timothy Sykes, author of the An American Hedge Fund, is a former hedge fund manager and founder of BullShip Press LLC. His bio states: “Since the beginning of 2008, Timothy has been the #1 trader/investor, out of 25,000+ on Covestor.com.” Using the record of 296 trades spanning 2/1/08 through 1/22/10 (including those previously posted for October 2009, but now missing) and some recent clarifications from Timothy Sykes, we find that: Keep Reading

We evaluate here the New York Metro “Bottom Line” commentary of Jim Cramer regarding the stock market via his archived articles since May 2000. Jim Cramer is among the most visible and prolific members of the financial media. He is Director, Co-founder and ubiquitous contributor at TheStreet.com, where he offers his ActionAlertsPlus service. He is also the host of Mad Money on CNBC. He makes hundreds of buy-hold-sell recommendations on individual stocks each month via these channels. We use here his New York Metro commentary because of its lengthy archive and manageable pace. We selected from that commentary all articles which address the future direction of the overall stock market, using the subsequent behavior of the S&P 500 index to judge accuracy. 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: Keep Reading

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: Keep Reading

A reader suggested a review of the investing expertise of Arch Crawford, editor and publisher of the Crawford Perspectives market timing newsletter. Arch Crawford has offered advice on financial markets based on technical analysis, sentiment indicators and planetary cycles since 1977, with a self-judgment that his “printed accuracy is Second to None!” His advice covers “the major stock indices, with some coverage of Gold, Oil, CRB Index, Bonds (Interest Rates) and the U.S. Dollar.” He offers no quantitative analysis of his trading results, but he makes publicly available an archive of 43 sequential issues of his newsletter spanning January 2002 through June 2005. In each issue is a “Vital Signs” feature that records and tracks recommendations to trade the S&P 500 Index and the Dow Jones Industrial Average. Using the 43 recommended S&P 500 Index trades and closing levels for the S&P 500 Index on the trade dates, we find that: Keep Reading

A reader asked: “Could you give a grade for the Peter Dag Portfolio? He always claims to be in Timer Digest’s top five for market timing year over year.” Keep Reading

In his 2009 book Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition, author John Bogle has “not altered a single word of the original edition, but [has] chosen instead to update its voluminous data, and to comment on significant developments that have occurred since then…”, [trying his] “best to be candid in describing occasions when experience confirmed [his] insights of a decade ago, and when experience failed to do so…” One significant development over the past decade is the growing availability and diversity of Exchange-Traded Funds (ETF) as substitutes for mutual funds. Some notable reflections from the book are: Keep Reading

A reader asked: “Have you seen this market timer?” Keep Reading

A reader asked: “Nicholas Vardy sends me offers to subscribe to his newsletter. If I am to believe his claims, he could make me rich. He is not listed among your gurus. Would you consider evaluating his track record?” Keep Reading