2012 was another bad year for Wall Street’s pundits. This piece in yesterday’s WSJ highlighted some of the pitfalls involved in making broad market prognostications and not having to back those comments up with, well, anything at all:
Neither Mr. Rogers nor Mr. Cramer should feel singled out. The business of market punditry is fraught with potholes.
Of the 65 market “gurus” tracked during the last few years by CXO Advisory Group, the median accuracy for market calls is 47%. If that sounds low, or you wonder about the quality of the pundit, consider that the list includes such well-known names as Bill Fleckenstein (37%), Jeremy Grantham (48%), Bill Gross (46%) and Louis Navellier (60%).”
What we need in the investment business is fewer people with opinions and more people with proven track records that validate their supposedly superior understanding of what’s going to happen and why.