This post is dedicated to Randall Forsyth and his predecessor, the late Alan Abelson, who over the years have penned the weekly the “Up and Down Wall Street” column in Barron’s. The reason I included the parenthetical “mostly” was to emphasize that this column is more of a downer than an upper. In fact, although I don’t read the piece every week, I don’t think that I have ever read a U&DWS column that had a positive conclusion, which I’m sure is much to the chagrin of its regular followers. Essentially any readers would have been warned off equities for most of my lifetime. To be fair, since they have always been cautious, they and their minions have made several good calls during those decades (stopped-Clock syndrome) … at previous market peaks –1966, 1973, 1987, 2000 and 2008. However, they missed getting you into two secular bull markets — 1983 to 2000 and 2013 to the present. Not only did they not get you in, but they advised caution all the way up. The Dow Jones Industrials are almost 20,000 points higher than the 1983 breakout.
Barron’s has Minions to back up the negativity
The minions, the expert witnesses quoted by the authors are usually negative and off the mark. Yet they keep bringing them back. A regularly cited source in the “Up and Down Wall Street” column is David Rosenberg, chief economist at Gluskin Sheff. He made the article two weeks ago and was widely quoted U&DWS, “Trump’s Big Tax Challenge.” (You need a subscription to view — trust me, according to Rosenberg, it’s bad news for the market). Importantly, Rosenberg has been a negative source all the way up, constantly warning investors of the dangers of investing.
Others include perennial doomsayer money manager John Hussman and MacroMaven founder Stephanie Pomboy. Here’s a post from the late Alan Abelson, Up and Down Wall Street December 1, 2012. The S&P 500 stood at 1257 (now near 2400): “A Real Cliff Hanger.” (this article is in the public domain) Abelson’s article, which is negative at its core, cites “fund manager John Hussman, who has compiled quite a record over the years” as being “unapologetically negative.” Husmann has remained steadfast in that position.
Ms. Pomboy, who is usually negative, is also a regular in the pages of Barron’s gave us this outlook last August: “Stephnie Pomboy: A Grim Outlook for the Economy, Stocks.” This article was published August 20, 2016 with the S&P 500 standing at 2183. Today we are 10% higher.
CNBC has minions too!
There was the triumphant return from oblivion of perma-bear, David Tice, Friday afternoon May 5 … “A Wall Street bear warns ‘bad things are about to happen,’ and a recession is on the way.” Scary stuff, eh? Remember, I have always said recessions are normal economic events, not to be feared but expected and accepted, never the end of the world. Tice made his comeback and fearful call on CNBC (never known for their ability to deliver to their audience really credible pundits). Over the past 20 years he has only been right three times and that is because he stayed negative …March 2000, September 2001 and October 2007. David has been negative in his public pronouncements as the “Prudent Bear” for as long as I can remember (decades). The problem is, had you taken his advice and avoided stocks, you might have missed out on huge market advances and declines. Importantly, all you had to do was simply be in the market, plugged your ears and you would have been fine. This all brings to mind the point that predicting the economy or the stock market is very hard, if not impossible, regardless of the number of advanced degrees behind your name. That is why it is more important to focus on what you are holding than the ups and downs that will occur while you are holding it.
How is it that these minions, even though much of their opining and sooth-saying is usually wrong, can continue to be trusted sources in Barron’s and on CNBC, Bloomberg and Fox Business? My guess is that as long as the presenters have attractive or unusual personas and they present well accurate predictions do not matter. All they have to do is be cautionary or negative because the media has figured out that bad news really does sell. Ergo, heeding the expert advice and opinion of these pundits is a significant impediment to successful investing. Hence, my title: “Up and (mostly) Down Wall Street,”
Speaking of Ups & Downs, CNBC continues to ferret out new concerns
According to CNBC FBI Director Comey’s firing ” … raises concern that (the) Trump pro-growth agenda could be slowed even more.” That “pro-growth agenda” may already be DOA because the president continues to step on his pro-growth agenda with the constant controversy HE creates surrounding his administration … random tweets, a healthcare replacement that needs to be completed as a source of funds for tax cuts or infrastructure, and of course, Russia. This lack of focus or progress has been going on since the inauguration and I am sure it has not been lost on the market. The market seems to be telling us either muddling along at 2% GDP growth is okay or we will see accelerating growth regardless of whether of the Trump growth initiatives are successful or not. I’m betting on better growth on the back of continuing world-wide economic recovery.
What’s your take?
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