Dow 17,000 anyone?
It's only 20% up from here and it's now officially Jeremy Siegel's prediction for 2013 but, of course, Jeremy Siegel is always bullish but, as I noted in yesterday's post, always bullish is usually right in the markets. In fact, maybe we're all not bullish enough. Yesterday afternoon, in Member Chat, StJeanLuc brought up this Inflation-Adjusted Chart of the Dow from IntelligentBear and we can that, clearly, we're only about halfway into a real rally.
At 14,000 we are exactly in the middle between Siegel's 17,000 prediction and the red support line on that chart at 11,000, that would make for a bearish correction of that same(ish) 20%. So who should we listen to? According to William Sherdon (from Barry), author of “The Fortune Sellers: The Big Business of Buying and Selling Predictions,” the answer is NO ONE!
That's right, they are ALL idiots. And, by THEY, I mean anyone who tells you they know what the market is going to do. As Barry notes, Sherden decided to test the accuracy of leading forecasters over a multidecade period. His conclusion: Forecasters stink! His findings are summarized by Paul Farrell as follows:
1. Economists’ predictions are no better than guesses
2. Government economists often worse than guesses
3. Long-term accuracy is impossible
4. Turning points cannot be predicted
5. No specific forecasters are better than the rest of pack
6. No forecaster was more expert with specific statistics
7. No one ideological orientation was better
8. Consensus forecasts do not improve accuracy
9. Psychological bias distorts forecasters and their forecasts
10. Increased sophistication does not improve accuracy
11. No improvement over the years
This is why, at PSW, we teach our Members to BE THE HOUSE – not the gambler. The only sure thing in this market is SELLING premium to other suckers who THINK they know what's going to happen next. Since even the best of them are really no more accurate than a coin flip – the best thing to do is step on over to the other side of…