the thread of bad predictions

Discussion in 'Economics' started by billyjoerob, Jan 5, 2013.

  1. A legendary example of bad predictions:

    The fund managers, at the beginning of 2000, picked the following stocks as the best stocks of the 00s:

    Henry Schein
    Waste Management
    JDS Uniphase
    Zee Telefilms
    Jones Apparel

    The only pick among all of these stocks that did well was Henry Schein, which did very well. Some of the picks are really ridiculous - if Cisco had been the best stock of the OO's, it would have been as big as the economy.

    Bad predictions are easy to find, more coming.
  2. I looked them all up and got these results....This is what you would've made had you bought on Jan 3,2000 up until Jan 4, 2013 as a return.

    Oracle +69%
    Nokia -87%
    Medtronic +10%
    Flextronics -75%
    Henry Schein +1150%
    Waste Management +167%
    JDS Uniphase -99%
    Zee Telefilms (no info, assume it went to zero) -100%
    Cisco -61%
    Jones Apparel -37%

    Had you invested equally in all these recommended stocks, your total return for these last 13 years would be just under 94% return.

    Had you invested in the Dow for that same period of time, your return would have been about 23%.

    So I cant say those were bad predictions. Those fund managers still greatly outperformed the market even with some of those dogs in their portfolio.
  3. Maverick74


    Harry Markowitz's famous quote was, "the only free lunch in the markets is diversification."
  4. ....which has allowed many mediocre money managers to "feast" on their retarded clients. :( :mad: :eek:
  5. 1) Each and every one of those stocks had to have taken a "bath" during the deflation of the "Tech Wreck" from way back when. :( :eek: :D
    2) Fortunately, out of a potentially infinite number of portfolios one could have, nobody was actually foolish enough to mimic what you were referring to. :cool:
  6. But what's so pathetic is that, asked to name the stock of the next decade, they named stocks of the previous decade. Oracle? Cisco? Cisco in 2000 was bigger than the market cap of all its customers (the telecoms) combined. The law of large numbers also doomed Oracle, Medtronic, etc. Waste Management is essentially a real estate company, not going to be stock of the decade.

    At least there was a decent rationale for Henry Schein, which did well.

  7. eggggzzzzzzzzactly.. well stated... +1 and all that..
  8. The book Gorilla Game in 1997 named the following stocks as potential "gorilla" or tornado or whatever stocks. To their credit, Cisco in 1997 was a good pick. So were some of the other stocks, but largely because of the market, not the stocks.

    i2 Technologies (ITWO)
    Manugistics (MANU)

    Microsoft (MSFT)
    Netscape (NSCP)

    Check Point (CHKPF)
    Cylink (CYLK)
    Network Associates (NETA)**
    Security Dynamics (SDTI)

    Cisco Systems (CSCO)
    Intel (INTC)
    Microsoft (MSFT
  9. I'd have to go with peilthetraveler's long BSC at $36 on the day they announced the $2 deal. Of course he tried to renege and use PDT rules to DK the trade.
  10. Did it really go from $36 to $2 in one day? It's a shame there's no site for old stock charts. I'd love to see some charts of Enron, BSC, etc.
    #10     Jan 12, 2013