Here are some of the worst predictions that were made about 2008. Savor them -- a crop like this doesn't come along every year. 1. "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!" -- Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008 At the time of the prediction, the Dow Jones industrial average was at 12,300. By late December it was at 8,500. 2. AIG (NYSE:AIG - News) "could have huge gains in the second quarter." -- Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008 AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat. 3. "I think this is a case where Freddie Mac (NYSE:FRE - News) and Fannie Mae (NYSE:FNM - News) are fundamentally sound. They're not in danger of going under I think they are in good shape going forward." -- Barney Frank (D-Mass.), House Financial Services Committee chairman, July 14, 2008 Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each. 4. "The market is in the process of correcting itself." -- President George W. Bush, in a Mar. 14, 2008 speech For the rest of the year, the market kept correcting and correcting and correcting. 5. "No! No! No! Bear Stearns is not in trouble." -- Jim Cramer, CNBC commentator, Mar. 11, 2008 Five days later, JPMorgan Chase (NYSE:JPM - News) took over Bear Stearns with government help, nearly wiping out shareholders. 6. "Existing-Home Sales to Trend Up in 2008" -- Headline of a National Association of Realtors press release, Dec. 9, 2007 On Dec. 23, 2008, the group said November sales were running at an annual rate of 4.5 million -- down 11% from a year earlier -- in the worst housing slump since the Depression. 7. "I think you'll see (oil prices at) $150 a barrel by the end of the year" -- T. Boone Pickens, June 20, 2008 Oil was then around $135 a barrel. By late December it was below $40. 8. "I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system." -- Ben Bernanke, Federal Reserve chairman, Feb. 28, 2008 In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup (NYSE:C - News) needed an even bigger rescue in November. 9. "In today's regulatory environment, it's virtually impossible to violate rules." -- Bernard Madoff, money manager, Oct. 20, 2007 About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme. 10. A Bound Man: Why We Are Excited About Obama and Why He Can't Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007. Mr. Steele, meet President-elect Barack Obama.
Good list there. Generally, I think people should refrain from making predictions, especially those that just take the current trend and see it continuing, etc. such as with the OIL prices. I saw once an interesting stat from the NFL - over 2 years (I think it was when the Rams and Ravens won 2 super bowls), some one did a study and found that only 1 out of 400 "experts" had predicted EITHER Super Bowl team that made it during those 2 years. With 30 teams in the NFL, it should have been about 1 in 15 just using random picks to pick a SB team, but only 1 in 400 so called experts got it? Amazing. Of course, what's more amazing is bozos make predictions, are wrong over and over and over again, and keep their jobs!
PICKENS: I don't think we'll ever see $50-a-barrel oil again. Jan 2007 http://www.boonepickens.com/pdf/article7.pdf
In March 2008, I was having a discussion with my friend and I had predicted the downfall of "Ambani brothers (Mukesh & Anil)" who were collectively valued at $91 billion by Forbes. Today Ambani brothers have lost $60 billion (collectively). By the way, I am not God.
Mukesh lost less than Anil over the past year and both of their losses are primarily from their corporate holdings not their outside investments. Muskesh is currently building a new 30 million dollar home and isn't worried about the drawdown in the least. I mean really . . . if you had 30 billion and simply distributed the wealth in cash and it only drew 3% interest yearly, you would get about $75 Million a month in interest income . . . rough huh?