the thread of bad predictions

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

  1. This is too easy, but Dow 36000 is notorious.

    http://www.theatlantic.com/magazine/archive/1999/09/dow-36-000/306249/

    Stocks are now, we believe, in the midst of a one-time-only rise to much higher ground—to the neighborhood of 36,000 for the Dow Jones Industrial Average. After they complete this historic ascent, owning them will still be profitable but the returns will decline. You won't be able to make as much money from them each year. We believe that in the meantime, however, astounding profits will be made.

    Many small investors are already catching on. They have ignored the dire warnings from professionals that have accompanied nearly every step of the Dow's rise from 777 on August 12, 1982. They are rejecting the outdated model that Wall Street has used to assess whether stocks are overvalued—a model based largely on historical price-to-earnings, or P/E, ratios. That rejection reflects not their nuttiness but their sanity. Contrary to the famous warning from Alan Greenspan, the chairman of the Federal Reserve Board—made on December 5, 1996, with the Dow at 6,437—many investors are rationally exuberant. They have bid up the prices of stocks because stocks are a great deal.
     
    #11     Jan 12, 2013
  2. Larry Kudlow has a knack for being exactly wrong. Here he is on November 21, 2007, ignoring all the signs of impending doom:

    http://www.nationalreview.com/articles/222912/three-more-years-goldilocks/larry-kudlow

    Three More Years of Goldilocks?

    That said, I think the election-year [2008] economy will be stronger than the Fed’s estimate — closer to 3 percent. Too much is being made of both the sub-prime credit problem and the housing downturn. A recent Bank of England study shows that residential mortgage-backed securities in the U.S. total $5.8 trillion. Of that, only $700 billion, or 12 percent, are sub-prime. Even when you add in $600 billion of so-called Alt-A mortgage paper, most of which will not default, the total of these home loans is still less than 20 percent of all mortgage-backed paper.

    What’s more, the entire market in sub-prime debt is just 1.4 percent of the global equity markets. On any given day, a 1.4 percent drop in world stocks would erase the same amount of value as the collective markdown of all sub-prime-backed bonds to $0. It’s just not that big a deal.
     
    #12     Jan 12, 2013
  3. Wow, yeah. I made that trade almost 5 years ago. The worst one of my life. (I never tried to reneg though, but I actually am getting a settlement this year from the class action suit, getting something like 15% back of what I lost) Cant believe you remembered the price I got in at as I barely remember! haha. If I knew I was living rent free in your head all this time, I would've never bought my house. :)
     
    #13     Jan 12, 2013
  4. I searched BSC today and yours was the top thread. Whines about not being stopped on PDT, lol, and tries to scam his broker. I'll admit the FB thread was nearly as entertaining. Did you get a good price in shantytown?

    FB $31.72.
     
    #14     Jan 12, 2013