Looking Back at 2010 Forecasts

[concerned752]

Not sure if this belongs under Other Discussions...

About a year ago, I thought it would be fun to hang on to predictions about what would happen in 2010, in light of Harry Browne's Fourth Golden Rule of Financial Safety:

No one can predict the future.

This isn't intended as anything personal against the people singled out (Rick Ferri, for example, seemed like a genuinely great guy in his interview with Craig): there's no doubt that they're likely better educated and smarter than I am. But that's the point: even very smart people, using what appears to be very good reasoning, cannot predict the future.

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Dow Industrials hit record, top 15,000 by 2011?
This is a fun one. Paul B. Farrell is skeptical about Dow 15,000 (right about that), but goes on to post a Gary Shilling forecast of a declining U.S. stock market.

Ten Investment Ideas for 2010
To be honest, I don't follow any specific sectors closely enough to know if any of these panned out.

[MediumTex]

My 2010 predictions over at BH turned out pretty well.

[moda0306]

My predictions for 2011:

Being invested in the PP will help me sleep like a baby and avoid stress.

I'll get back to you guys on New Years Eve, 2011.

[travelingheelfan]

This reminds me of trying to pick a Final Four bracket on the first week of the NCAA tournament in March.  It's a lot of fun but you tend to make a lot of picks that don't pan out.

[craigr]

Rick Ferri: "I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Gold is at a new high yet again since this 2009 prediction. Anyone else looking to make a wager?

[craigr]

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Happy 2012! That one from 2009 is a classic. I feel like bumping that thread.

[AdamA]

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Happy 2012! That one from 2009 is a classic. I feel like bumping that thread.

I started reading through the posts from that link...

I'm glad Craig started this site.

[craigr]

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Happy 2012! That one from 2009 is a classic. I feel like bumping that thread.

I started reading through the posts from that link...

I'm glad Craig started this site, because, honestly, I don't know if I would ever sorted through all of that to discover the PP.  

I like the Bogleheads site a lot and they have a ton of great posters over there. But the Permanent Portfolio uses some assets that are not so popular (mainly gold and long term bonds). Having its own forum just makes discussing these particular issues easier. I still post over at the Bogleheads from time to time and read some threads for financial tips and ideas unrelated to what we do here.

[moda0306]

I have absolutely no interest in 'researching' the Browne portfolio.

That's a quote from Rick Ferri on the attached thread.  If there's anything I hate, it's intellectual incuriosity, and this statement displays it in spades.  I agree that 25% in gold and 25% in treasury bills is a bit extreme, but if you look at the real needs of a real family in their real lives, you'll realize that sometimes they need liquid cash... and other times they may need a currency that doesn't depend on their government.

Most of us don't really get to saving hard and fast until we're almost 30.  We often quit around 65.  This leaves us 35 years to acquire and grow wealt, hoping there is no massive crisis along the way.  Ferri's argument is that we rely on the multitude of Wall Street contracts to deliver us our supposed "real" growth (by real, he means 1's and 0's on a computer screen... REAL wealth to me is the food I eat and home I live in, and gold is a lot more real than my VTI shares).

He says people can't "eat" lower volatility.  What he's asking us all to eat instead is the losses and stress that go along with his suggested portfolio, with hopes that his outlook on future prosperity works out.

[AdamA]

I have absolutely no interest in 'researching' the Browne portfolio.

That's a quote from Rick Ferri on the attached thread.  

Rick Ferri is a mystery to me. 

His book All About Asset Allocation is great. 

Why is Rick so angry at gold?

 

[craigr]

I have absolutely no interest in 'researching' the Browne portfolio.

That's a quote from Rick Ferri on the attached thread.  

Rick Ferri is a mystery to me.  

His book All About Asset Allocation is great.  

Why is Rick so angry at gold?

I used to dislike gold (and long term bonds). You might even say I was angry about people advocating it. But then I looked at the evidence and found I was wrong and changed my mind.

[AdamA]

I used to dislike gold (and long term bonds). You might even say I was angry about people advocating it. But then I looked at the evidence and found I was wrong and changed my mind.

Right, but you didn't write a book about asset allocation that essentially indirectly makes the case for holding gold in a portfolio full of non correlated assets.  

I read his book, and then was shocked to hear your podcast interview with him.  It was the opposite of what I would have expected. 

[moda0306]

Gold is a tough beast to really get your head around.

I think one of the important things about gold is not gold itself, but the other available assets that Wall Street or our government offer us.  These are financial assets that are offered to us on a silver platter in our 401(k) plans and by Treasury Direct, not some business we've started up on our own with our skills.  People invest in stocks partially because the dream of owning an innovative company is so appealing... "You're an owner."  Once a company hits "publicly traded" status, it issues debt and stock to markets that chop up and bleach out much of the profit out of them through fees, excessive compensation, and other inefficiencies, and then they offer them to us after all this has been completed.

The whole reason businesses go public is access to these amazing markets of cheap capital.

Cheap capital for them is reduced return for you and I.  We get the benefit of easy-peasy-Japanesey (sorry for that) contributions from our desktops, and the S&P 500 gets capital at 5.5% P/E Ratio.  

Further, I don't see how any responsible money manager can advocate for any less than having someone hold a decent amount of "physical portable" wealth that doesn't need government or Wall Street to help it hold its value.

He said we "only go off the gold standard once."  This is true, but I'd also say we can't have too many more 1982-2000 periods left unless we find another energy supply... so I'm more concerned about the "fossil-fuel standard" than anything else.

[MediumTex]

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Happy 2012! That one from 2009 is a classic. I feel like bumping that thread.

I started reading through the posts from that link...

I'm glad Craig started this site.

I read through some of that thread too.

Pretty wild stuff.

Rick Ferri is great.  His foot/mouth coordination is outstanding.

[craigr]

Not sure if this belongs under Other Discussions...

About a year ago, I thought it would be fun to hang on to predictions about what would happen in 2010, in light of Harry Browne's Fourth Golden Rule of Financial Safety:

No one can predict the future.

This isn't intended as anything personal against the people singled out (Rick Ferri, for example, seemed like a genuinely great guy in his interview with Craig): there's no doubt that they're likely better educated and smarter than I am. But that's the point: even very smart people, using what appears to be very good reasoning, cannot predict the future.

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Dow Industrials hit record, top 15,000 by 2011?
This is a fun one. Paul B. Farrell is skeptical about Dow 15,000 (right about that), but goes on to post a Gary Shilling forecast of a declining U.S. stock market.

Ten Investment Ideas for 2010
To be honest, I don't follow any specific sectors closely enough to know if any of these panned out.

Bump.

DJIA is now at 15,000. Gold has not dropped down to $500.

Markets remain unpredictable.

[Libertarian666]

Not sure if this belongs under Other Discussions...

About a year ago, I thought it would be fun to hang on to predictions about what would happen in 2010, in light of Harry Browne's Fourth Golden Rule of Financial Safety:

No one can predict the future.

This isn't intended as anything personal against the people singled out (Rick Ferri, for example, seemed like a genuinely great guy in his interview with Craig): there's no doubt that they're likely better educated and smarter than I am. But that's the point: even very smart people, using what appears to be very good reasoning, cannot predict the future.

I only kept three of these handy; if you happen to have more, feel free to share them:

"I speculate that gold will drop below 700 per once by 2010, and below 500 per once by 2011."

Dow Industrials hit record, top 15,000 by 2011?
This is a fun one. Paul B. Farrell is skeptical about Dow 15,000 (right about that), but goes on to post a Gary Shilling forecast of a declining U.S. stock market.

Ten Investment Ideas for 2010
To be honest, I don't follow any specific sectors closely enough to know if any of these panned out.

Bump.

DJIA is now at 15,000. Gold has not dropped down to $500.

Markets remain unpredictable.

Rick Ferri is a hack. He keeps trotting out the same lame old arguments about how gold doesn't grow, doesn't produce income, etc. I'm amazed he hasn't mentioned that you can't eat it; that's about the only bromide he hasn't resorted to in the face of the evidence that it reduces portfolio volatility without hurting performance.

[AdamA]

Rick Ferri is a hack.

I wouldn't say he's a hack.  His book is pretty good.  I just don't get his beef with with gold. 

He keeps trotting out the same lame old arguments about how gold doesn't grow, doesn't produce income, etc. I'm amazed he hasn't mentioned that you can't eat it; that's about the only bromide he hasn't resorted to in the face of the evidence that it reduces portfolio volatility without hurting performance.

That is true...and funny.  Well put.

[craigr]

Rick isn't a hack. He just doesn't like gold. That's OK because he is big on junk bonds which I don't especially like and avoid them entirely.

The main point is you have some experts saying DJIA 15,000 won't happen and another saying gold will be $500 an ounce three years back. Even experts can be wrong and nobody can predict the future.

And if you read the article posted about DJIA 15,000 various people were saying to sell stocks, etc. A totally wrong move that would have been very expensive in terms of missed gains.

Ignore market predictions is the main point, even if your favorite expert is doing the predicting.

[dualstow]

I like Rick and his book on Asset Allocation.
Still, with a name like Ferri, you'd think he'd be more into metals. ;-)

[Mdraf]

Heh, the reason why I ended up with a PP is because I used to keep track of all the "experts" and their predictions. I didn't necessarily act on them but I kept track.  It is unbelievable how wrong they all are. 

Reminds of that wonderful metaphor in Schwed's Where Are The Customers' Yachts where 1000 brokers are lined up facing each other 500 against 500. They are flipping coins to see who wins. Eventually a few win 10 in a row. They immediately stop  flipping coins and become consultants teaching the others how to flip coins.

[Libertarian666]

Rick isn't a hack. He just doesn't like gold. That's OK because he is big on junk bonds which I don't especially like and avoid them entirely.

The main point is you have some experts saying DJIA 15,000 won't happen and another saying gold will be $500 an ounce three years back. Even experts can be wrong and nobody can predict the future.

And if you read the article posted about DJIA 15,000 various people were saying to sell stocks, etc. A totally wrong move that would have been very expensive in terms of missed gains.

Ignore market predictions is the main point, even if your favorite expert is doing the predicting.

The reason I say he is a hack is that he claims to be an expert but dismisses the PP as "voodoo" without bothering to analyze it.

[Pointedstick]

Are you now a PP convert, Libertarian666? Last I heard, you had a gold-heavy portfolio. Or is it that you respect the PP but realize that it's simply not for you?

[Libertarian666]

Are you now a PP convert, Libertarian666? Last I heard, you had a gold-heavy portfolio. Or is it that you respect the PP but realize that it's simply not for you?

The latter.

Let's put it this way: if somehow I lost my very strong convictions as to what was going to happen in the economy (and more broadly the world), the PP would be my choice. I certainly prefer it unconditionally to a "standard balanced portfolio" with no gold or cash, such as the bogleheads prefer.

[MediumTex]

Rick isn't a hack. He just doesn't like gold. That's OK because he is big on junk bonds which I don't especially like and avoid them entirely.

The main point is you have some experts saying DJIA 15,000 won't happen and another saying gold will be $500 an ounce three years back. Even experts can be wrong and nobody can predict the future.

And if you read the article posted about DJIA 15,000 various people were saying to sell stocks, etc. A totally wrong move that would have been very expensive in terms of missed gains.

Ignore market predictions is the main point, even if your favorite expert is doing the predicting.

The reason I say he is a hack is that he claims to be an expert but dismisses the PP as "voodoo" without bothering to analyze it.

It reminds me of the way the clerics responded to Galileo's telescope--i.e., they refused to even look into it.