Unexpectedly Intriguing!
May 4, 2011

From January 2008 through April 2011, we publicly posted 124 predictions related to stock prices in the S&P 500, GDP, new unemployment claims and other economic or business-related topics. We've established the outcome for 116 of those predictions and determined that 79 were on target while 37 were not.

Guru with Crystal Ball

Overall, that gives us an overall prediction accuracy percentage of 68.1% and a plus-minus statistic of +42 for our prediction project. But we still have a burning question:

How does that compare to others?

Is that 68.1% prediction accuracy good? Average? Lousy? We don't know, so today we're going to find out. And the way we're going to do that is to compare our performance with the gurus!

Who are the gurus? Well, they're the (mostly) guys who put out their own economic and investing predictions via newsletters or magazine articles. Several even have radio shows and even turn up with some regularity on business or investing-related television programs. And luckily for us, guys whose prediction track records have been sampled and analyzed by CXO Advisory who, really luckily for us, utilizes a system that's very similar to the plus-minus based approach we used to measure our own performance!

We've taken CXO Advisory's recorded sample data for each the gurus for whom they've tabulated data and put it in the dynamic table below - if you're accessing the table directly on Political Calculations, you can rank the data from low-to-high or from high-to-low according to the category you select by clicking the column headings.

Ranking the Gurus, 4 May 2011
Guru Oldest Prediction Most Recent Update Number of Predictions Right Wrong Percentage Correct +/- Score
Abby Josept Cohen, the Sunny Side Dec-1998 29-Apr-2011 52 17 35 32.7% -18
Ben Zacks: The Zacks Way Jun-2002 19-Jan-2005 32 16 16 50.0% 0
Bernie Schaeffer: The Schaeffer’s Edge? Nov-2005 25-Apr-2011 73 36 37 49.3% -1
Bill Cara: Populist Market Pundit Jan-2005 13-Mar-2011 184 77 107 41.8% -30
Bill Fleckenstein: Apocalypse Soon Aug-2001 11-Mar-2011 130 48 82 36.9% -34
Bill Gross: Top Bond Gun Feb-2002 29-May-2009 63 29 34 46.0% -5
Bob Brinker’s Market Timing Aug-2002 02-Apr-2010 42 22 20 52.4% +2
Bob Hoye: Rational Fringe? Aug-2005 23-Mar-2011 47 18 29 38.3% -11
Cabot Market Letter Outlooks Aug-2002 07-Mar-2011 37 23 14 62.2% +9
Carl Futia Telling Apr-2005 29-Apr-2011 86 42 44 48.8% -2
Carl Swenlin’s Technical Windsock Jan-2006 29-Apr-2011 111 63 48 56.8% +15
Charles Biderman, Going with the Flow Jan-2000 18-May-2009 42 18 24 42.9% -6
Clif Droke’s Contrarian Triangulation Jul-2003 10-Mar-2011 87 42 45 48.3% -3
Comstock’s Commentary Jan-2003 29-Apr-2011 162 71 91 43.8% -20
Curt Hesler: Being Cautious May-2002 29-Apr-2011 80 26 54 32.5% -28
Dan Sullivan, Charting the Course? Jan-2001 19-May-2010 110 65 45 59.1% +20
David Dreman: About Value Jun-2002 01-Jul-2010 37 21 16 56.8% +5
David Nassar: Is He Market-wise? Nov-2004 26-May-2006 44 30 14 68.2% +16
Dennis Slothower’s Timing Jun-2002 17-Mar-2011 121 55 66 45.5% -11
Does Outlook Have Insight? (S&P) May-2003 28-Sep-2007 143 70 73 49.0% -3
Don Hays on Long-term Cycles and Shorter-term Trends Nov-2000 24-Jul-2008 84 39 45 46.4% -6
Don Luskin: Can He Make You Rich and Smart? Aug-2001 16-Jul-2010 186 90 96 48.4% -6
Donald Rowe, Superbull? Jun-2002 02-May-2008 66 28 38 42.4% -10
Gary D. Halbert Forecasts and Trends Jan-2002 29-Mar-2011 90 41 49 45.6% -8
Gary Kaltbaum: An Edge for Investors? May-2005 25-Mar-2011 132 69 63 52.3% +6
Gary Shilling: A Dozen Reasons To Worry Feb-2000 22-Jul-2010 38 15 23 39.5% -8
How About James Stack? Feb-2006 16-Feb-2010 4 1 3 25.0% -2
How About Mike Paulenoff? Oct-2004 05-Dec-2008 14 5 9 35.7% -4
Igor Greenwald: Ignore Igor? Oct-2002 13-Jan-2006 37 15 22 40.5% -7
Jack Schannep’s Sweepstakes Jul-2002 18-Mar-2011 54 35 19 64.8% +16
James Dines: A Living Legend? Apr-2002 11-Apr-2011 32 16 16 50.0% 0
James Oberweis: Thinking Octagonally Jul-2002 23-Nov-2007 34 22 12 64.7% +10
Jason Kelly: The Neatest Little Market Advice? Sep-2001 04-Feb-2010 119 70 49 58.8% +21
Jeremy Grantham: Train Wreck Spotter Aug-2000 28-Jan-2011 29 14 15 48.3% -1
Jim Cramer Deconstructed May-2000 15-Jun-2009 60 27 33 45.0% -6
Jim Jubak on the Big Picture Jan-2001 18-Apr-2011 135 59 76 43.7% -17
Jim Puplava Erupts Feb-2002 25-Mar-2005 41 15 26 36.6% -11
John Buckingham’s Prudent Speculations? May-2002 28-May-2009 14 8 6 57.1% +2
John Mauldin’s Thoughts Jan-2001 05-Mar-2011 200 81 119 40.5% -38
Jon Markman Speculates Jan-2007 22-May-2010 20 13 7 65.0% +6
Ken Fisher Chronicles Jan-2000 14-Mar-2011 104 66 38 63.5% +28
Laszlo Birinyi Bemusings Feb-2001 21-Sep-2009 25 12 13 48.0% -1
Linda Schurman: The Astrologer Versus the "Stock Star" Jul-2004 01-Apr-2011 52 21 31 40.4% -10
Louis Navellier: Calculating the Market’s Moves Mar-2001 25-Apr-2011 108 65 43 60.2% +22
Marc Faber: Nabob of Negativism? Oct-2000 03-May-2011 127 59 68 46.5% -9
Mark Arbeter: Arbiter of Technicals? Mar-2003 23-Feb-2009 210 115 95 54.8% +20
Martin Goldberg: Financial Sense? Sep-2003 20-May-2010 106 45 61 42.5% -16
Nadeem Walayat's Oraculations Jul-2006 03-Apr-2011 64 27 37 42.2% -10
Paul Tracy: Authoritative? Oct-2002 10-Nov-2005 51 27 24 52.9% +3
Political Calculations Jan-2008 02-May-2011 116 79 37 68.1% +42
Price Headley’s Trends May-2000 11-Apr-2011 208 87 121 41.8% -34
Richard Band: Does the Skinflint Really Buy Cheap? May-2002 30-Jun-2010 29 12 17 41.4% -5
Richard Moroney, Divining Dow Theory Aug-2002 18-Mar-2011 49 26 23 53.1% +3
Richard Rhodes Rules? Mar-2004 22-Mar-2007 40 19 21 47.5% -2
Richard Russell: Granddaddy of the Investment Newsletter Industry Jun-2000 11-Apr-2011 148 57 91 38.5% -34
Robert McHugh: Caution Is Warranted? Feb-2004 06-Feb-2011 110 36 74 32.7% -38
Robert Prechter: 100-Year Bear? Apr-2002 15-Jul-2010 19 5 14 26.3% -9
Stephen Leeb: Wall Street Wonder? Jan-2003 11-Mar-2011 25 12 13 48.0% -1
Steve Saville: From the Top Down Mar-2003 26-Jan-2011 34 8 26 23.5% -18
Steve Sjuggerud’s Sentiment Jul-2006 19-Jan-2011 37 24 13 64.9% +11
Steven Jon Kaplan: Overly Contrarian? May-2002 24-Apr-2011 76 22 54 28.9% -32
The Aden Sisters on the Stock Market Jun-2006 11-Apr-2011 21 11 10 52.4% +1
The Trading Wire at ChangeWave Nov-2004 05-May-2006 68 33 35 48.5% -2
Tim Wood: You Have Been Warned! Apr-2003 20-Apr-2011 166 75 91 45.2% -16
Tobin Smith’s Fearless Forecasts May-2000 23-Mar-2009 209 116 93 55.5% +23
Total Bob Doll Jan-2003 25-Sep-2006 152 82 70 53.9% +12
Combined Guru Totals N/A N/A 5,426 2,593 2,833 47.8% -240
Combined Guru Totals (Without Political Calculations) N/A N/A 5,310 2,514 2,796 47.3% -282

In looking over the rankings, although we appear to have done well, we should note that there's some apples-to-oranges comparisons going on between how we tracked our performance and how CXO measured the prediction accuracy of the gurus.

Our standard procedure in making predictions is to both state the prediction and the specific time period for which it would apply - if we were off on either count, we would score a miss. By contrast, CXO's method consider the gurus' predictions, but provides a full year of time following when they were made to determine the outcome, which is a much looser standard.

To be fair, that's because many of the gurus' predictions were open-ended in not specifying the period of time for which their predictions would apply. CXO's prediction accuracy measurement approach then is a reasonable way to consider that element, but one that is perhaps overly generous to the gurus. We also found that many of the guru's predictions were somewhat vague, in that a lot of predictions were essentially "up or down" calls, lacking precision in quantifying "how much?"

Dart Board - Source: Yes Yes Way

Overall, the gurus (including our results) were right 2,593 times and wrong 2,833 times, for an overall prediction accuracy score of 47.8% and a plus-minus statistic of -240. Omitting our results from the gurus total drops their overall prediction accuracy score to 47.3% and the plus-minus statistic to -282.

The bottom line however is that there are a few names in the list above that are genuinely worth listening to for economic and investing matters - particularly those with more than 100 recorded predictions and above average accuracy. We were surprised to see some very well respected names rank low in prediction accuracy, such as Richard Russell and John Mauldin, who performed less well than, say, Jim Cramer, perhaps the best known so-called guru in the list.

That's not necessarily a strike against these three gurus, as each (and particularly John Mauldin through his weekly newsletters) offers insights into economic and market matters that we find highly valuable. (Yes, believe it or not, Jim Cramer in serious mode can be very insightful!)

Finally, while we came out pretty well overall, our sense is that there are others who aren't ranked in the table above who would likely do as well or better. We'd love to see where Barry Ritholtz would rank for one (he would definitely qualify as a guru), as well as Ivan Kitov, who hunts bigger game in developing predictions that span multi-year periods of time, rather than predictions that apply for the next week or the next month.

Previously on Political Calculations

The following links will take you to our previous prediction outcome reports, which we've presented below in the order they've appeared here approximately every three months beginning with April 2009. You can get the most recent status updates by clicking the "track record" tag at the bottom of the post.

Image Credits: Joe Paduda and Yes Yes Way

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