The more interesting question is (and should be posted under Psychology): Why people still follow gurus who were proved so wrong so often? The answer is sheep mentality and the gurus' ability to be "certain".
1200? With a few exceptions, Prechter has been bearish on stocks since around 1989. I recall him giving a short-term buy signal just after 9/11 (good call), but I'm pretty sure you'd miss the entire 90's run/bubble if you followed him literally. As for gurus being popular, most made a famous prediction ('87 crash, 1990s' bull run, 2007-2008 real estate/stock crash, etc.) and have successfully milked it for an entire career. Why some have gotten more followers and media attention than others, I don't know. I guess it comes down to charisma, luck and many other factors. From my understanding, Prechter actually had a nice trading run (he won a contest I believe) in the mid-1980s. Then he developed a strong bearish bias that skewed his Elliot Wave and other analysis. Whether his good calls in the mid-80s were due to "objective" EW, good instincts or luck, I'm not sure. I'm an EW skeptic, so I'd lean towards instincts or luck.
if one is successful in markets, he/she probably would not be popular in financial information, and might probably even be unpopular. Goldman Sachs An argument would be that they are popular because they are wrong. It's graduation day @ Bedford Stuyvesant High School, and the kids are all getting diplomas except for Rodney. He's their star basketball player, who could have gotten a full scholarship to go to any school in the country, but since he didn't pass enough classes, he wasn't even going to graduate. As the diplomas are being handed out, Rodney shows up, and all the kids start chanting, "Give Rodney a chance, give Rodney a chance." So the principal says, "Okay, Rodney. If you can answer this question, I'll gives you a diploma and you can graduate. What is three plus two?" Rodney replies, "Eight." The principal says, "No, it is five. You can't graduate." The crowd chants, "Give Rodney another chance, give Rodney another chance." The principal says, "Okay, Rodney. If you can answer this question, I'll gives you a diploma and you can graduate. What is five minus one?" Rodney replies, "Two." The principal says, "Sorry, Rodney, it is four. You can't graduate." The crowd chants, "Give Rodney another chance, give Rodney another chance." The principal says, "Okay, Rodney, this your last chance... what is three times three?" Rodney answers, "Nine." The crowd pauses... and then they start chanting, "Give Rodney another chance... give Rodney another chance..." ---------------------------- Rodney may have been a basket ball star. A market guru has some "star" quality.
Thanks for the explanation. I think you got my two main points. I would also add that the crowd pays Rodney because he says what is inside them, confirmed by what they saw recently, and not what they would see shortly.
Depends on what you mean by popular... If by popular you mean prominent commentators who reflect the public view, they will often be wrong because the public/majority view is always wrong at turning points. And as traders, we're mostly concerned with the turning points. On the other hand, there are a lot of commentators who make it their business to identify the turning points. Usually this means they're bearish on something or other, and since panics and crashes are relatively rare these folks will be "wrong" most of the time (think of all those who were warning of a housing/debt bubble in 2005). Also, for the most part commentators are broadcasters, journalists, and academics, rather than successful professional traders/active money managers. But the latter are the ones who have the best grip on things. Whenever Bill Gross, Jim Chanos, Warren Buffet et al says something, it can't hurt to pay attention.
Do you have any explantion for this phenomenon? Is it the fact they have been choosing loosing trades for some time that makes them choose similar (i.e. loosing) trades again? Would you list a few common "bad" habbits? It may become a valuable list of "things to avoid" for new traders.
It´s like Lee Trevino once said: "I have never had a golf lesson in my whole life because I never found a teacher who could beat me!!