Markets

Which Market Gurus Get It Right the Most?

A study finds that market pundits have less than a 50/50 chance of getting it right.

Are market seers worth their salt? When forecasters are considered as a group, the answer is no.

That's the conclusion one draws from a study by CXO Advisory Group, a Manassas, Va., provider of market research and analysis. CXO, which recently completed an eight-year examination of gurus' market calls, found that on average the prognosticators were right 47% of the time—slightly worse than pure chance. Steve LeCompte, CXO's founder, gathered the 6,584 individual forecasts single-handedly. To simplify the process, he considered only calls about the performance or direction of U.S. stocks.

LeCompte also graded individual pundits. At the top of the list is David Nassar, an author of how-to books on day trading, who scored 68% accuracy. However, Nassar's grade is based just on an 18-month period between 2004 and 2006, when he wrote a column for MarketWatch.com (gurus were graded over different periods based on when each was active). In second place, with a 67% accuracy rate, is Jack Schannep, who publishes TheDowTheory.com. He is a technical analyst, which means he forecasts market movements by studying charts and patterns. Ken Fisher, a money manager and Forbes columnist, comes in third, with a 65% score. Fisher earned points for correctly advising investors to steer clear of stocks during the worst of the 2000–02 bear market, but he lost points for being overly bullish in 2008.

Big-name gurus are scattered throughout the rankings. Mad Money host Jim Cramer posted a 47% accuracy rate (LeCompte focused on Cramer's written calls by tracking a column he used to write for New York magazine). Bob Doll, chief stock strategist for Nuveen Asset Management, beat the average with 55% accuracy. Abby Joseph Cohen, a well-known strategist for Goldman Sachs, managed only 35% accuracy based on her calls from 1998 to 2011. At the bottom of the list is Robert Pretcher, a proponent of the so-called Elliott-wave theory of technical analysis, who got it right just 22% of the time. (Read the full report.)

Most Popular

Don’t Be Tricked Into Voluntarily Paying Higher Taxes on Your IRA
IRAs

Don’t Be Tricked Into Voluntarily Paying Higher Taxes on Your IRA

Traditional IRAs are set up in a way that basically incentivizes you (and your heirs) into paying the highest tax bill possible. Don’t fall for it. Co…
July 4, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 15 Best Stocks for the Rest of 2022
stocks to buy

The 15 Best Stocks for the Rest of 2022

The lesson of the past two years: Be ready for anything. Our 15 best stocks to buy for the rest of 2022 reflect several possible outcomes for the seco…
June 21, 2022

Recommended

Stock Market Today (7/6/22): Stocks Sprint Higher After Fed Minutes
Stock Market Today

Stock Market Today (7/6/22): Stocks Sprint Higher After Fed Minutes

As the broader stock market gained ground, U.S. crude futures fell into bear-market territory.
July 6, 2022
7 Common Investing Myths, Debunked
investing

7 Common Investing Myths, Debunked

The "conventional wisdom" is sometimes anything but. Financial experts dissect seven frequently touted lines of bad advice.
July 6, 2022
Stock Market Today (7/5/22): Energy Dampens Dow, FAANGs Elevate Nasdaq
Stock Market Today

Stock Market Today (7/5/22): Energy Dampens Dow, FAANGs Elevate Nasdaq

Recessionary fears weighed on oil and economically sensitive sectors Tuesday, while declining Treasury yields lifted tech-esque stocks.
July 5, 2022
How to Go to Cash
investing

How to Go to Cash

What exactly does it mean to 'go to cash,' and what should you do once you have?
July 5, 2022