Carnac The Magnificent (14 of Them) Predict The 2016 Stock Market!

By | January 5, 2016

Will These Denizens Of The Investing Arena Prove To Be Right Or Wrong At The End Of 2016?

In an interesting follow-up to an article yesterday that described some of the risks inherent from following the herd, or Wall Street pros (‘Historic Look At Following The Herd Or Worse, The ‘Experts’, When Investing!‘), today we offer the predictions for the yearend 2016 stock market from 14 investing experts.

The experts 2015 yearend predictions are also included showing just how prescient, or not, these pros actually were (some of the 2015 yearend estimates were changed as the year went on*).

As a note the point of the article is not to highlight the miscues of the experts. Rather it’s to remind investors, regardless of what they are investing in, that they need to do their own due diligence before they ‘pull the trigger’!

As a point of reference the S&P 500 closed out 2015 at 2043.9.

Stock Market: 2016 Predictions And 2015 Results

                                           2015 Estimate              2016 Prediction

Societe Generale                   2,200                             2,050

BMO Capital Markets          2,250                              2,100

Goldman Sachs                      2,100                              2,100

Credit Suisse                           2,225                              2,150

Morgan Stanley                      2,200                              2,175

Merrill Lynch                          2,200                              2,200

JP Morgan                               2,150                               2,200

Citi                                             2,200                              2,200

Barclays                                    2,100                               2,200

RBC Capital Markets             2,325                                2,225

UBS                                           2,225                                 2,275

Deutsche Bank                        2,150                                 2,250-2,300

Oppenheimer                          2,311                                  2,300

Fundstrat                                 2,325                                  2,325

*The ability to change predictions midstream, be wrong on a consistent basis and have little accountability for errors made are some of the things that make the professions of economist, stock picker and weather forecaster so desirable.

Forecast Source

Michael Haltman is President of Hallmark Abstract Service in New York. He can be reached at mhaltman@hallmarkabstractllc.com.

One thought on “Carnac The Magnificent (14 of Them) Predict The 2016 Stock Market!

  1. Hallmark Abstract Service Post author

    The following insight was provided by Hugh Johnson of Hugh Johnson Advisors (http://hjadvisors.com/) (formerly chief strategist at First Albany Corporation)…

    Hi Michael

    There is nothing wrong with your tongue-in-cheek comments on Wall Street’s prescience. It is very difficult in an ever-changing world to get close on forecasting the economy, profits, interest rates, and stock prices. It is equally difficult to manage portfolios and beat (or even “near”) benchmarks. The record of forecasters and money managers is, as you well know, quite clear. It is of course for this reason that indexing has become both popular and very appropriate in many (maybe most) situations.

    But, you need to start somewhere. So, if you actively manage portfolios (which I/we do) you need in my view to integrate a sensible (maybe wrong, but at a minimum sensible) a top down with a bottom up approach. The way to making good top down decisions (asset allocation, sector allocation, etc.) is to start with a sensible forecast for the economy, profits, interest rates, and stock prices. I try to do that recognizing that it is grandiose to imagine that I could get it right or precisely right. I think I have a sound approach. I start with something near the consensus forecast for the economy and then, using quite sophisticated statistical analysis, quantify the implications of the forecast for interest rates, profits, and stock prices (among many other things). As sensible as the approach is (it is very seductive when you use really good statistics) it is often wrong. Nevertheless, it is sensible which is all our investors really ask us to be.

    They also say emphatically that they are not interested in forecasters and managers who “think they have the answer” and make big bets (take big risks) with the goal of “knocking the cover off the ball.” That’s more than grandiose. That’s simply foolish. The most important character trait I look for in any forecaster or analyst is a recognition that no one, not anyone, knows what the future has in store. No one “has the answers.” If they get it right, it’s more luck than anything else. But, as a manager, you need to start somewhere.

    I like your thoughts.

    Hugh

    Incidentally, at the end of 2014 when the S&P 500 was 2067.56 I forecast (in my annual address to the Albany Chamber of Commerce) that the S&P would average 2105 in Q4 2015. It averaged 2047.85 (or thereabouts) which isn’t bad. “I must have the answer.”

    Reply

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