Gyroscopic Investing

Here are the track records of various stock market prognosticators: http://www.cxoadvisory.com/gurus/

I don't pay attention to anyone for their picks or timing, but I will pay attention to successful investors for their advice and insights.

I'll bet that if you calculated the average it would be just about 50%.

Basically, a coin toss would give you the same result as a guru (minus the newsletter fees). 

Adam1226 wrote: I'll bet that if you calculated the average it would be just about 50%.

Basically, a coin toss would give you the same result as a guru (minus the newsletter fees).   

Tossing a coin is far less entertaining, though.

Back in the 1960s, Forbes Magazine threw darts at the stock pages of the Wall Street Journal.  The stock symbols where the darts landed became the Dart Board Fund and the magazine compared this fund with the portfolios chosen by the leading Wall Street experts of the time.  The Dart Board Fund, of course, beat most of them well into the 1980s, when the magazine discontinued the practice.

Then someone figured out that a monkey rather than a human could have thrown the darts, so the new standard of performance became:  Can the money manager beat a monkey? 

To be fair, it sounds like the website really only looked at whether or not the market went up or down in a reasonable amount of time subsequent to the pundit's prediction.  It doesn't seem to have examined specific buy/sell recommendations and how much they would have gained or last.  

For example, I wouldn't really care if a guru was right only 1% of the time and wrong 99% of the time, as long as the 1% of the time he was right I made a fortune, and the 99% of the time he was wrong I lost only a small amount (I'm ignoring how psychologically difficult it would be to follow such a guru's advice).  
Theoretically, such a guru could produce winning recommendations.  

Having said that, I'm almost certain that had this website ranked the various gurus in such a manner the results would have been far worse, AND, it probably would have been more difficult to rank them b/c most of their predictions are vague at best.

Harry Browne discussed how he use to keep every investing newsletter he was ever sent. He would periodically go back and review the previous year's predictions to see how the guru did. As you'd expect, they were all lousy. Even with generous interpretation of their prediction the results were not good.

KevD wrote: (Sorry to keep harping on Prechter, but it is just amazing to me how such a failure continues to thrust himself into the public light and has no shame!  Fascinating, just fascinating.)

Don't be sorry.  He is one of the best examples around of why it's basically impossible to pick a so-called guru.  He seems (and may be) very well intentioned and is also articulate and interesting when he speaks.  But trying to use his advice (even the subscription advice) is amost impossible for the average person.  I think Peter Schiff also fits into this category. 

Elliot Wave Theory is interesting as a way of describing past market trends, but probably not much help when it comes to making predictions, at least not to me.

Harry Dent has been getting some press lately.  He periodically gets some pretty good coverage.

Dent is sort of like a Prechter knock-off--it's mostly just telling interesting and vaguely scary stories.

The mileage that Prechter has gotten out of Elliott Wave theory is pretty amazing.

anyone have any dirt to serve on James Dines (Dines Letter)?  last 2 years he's up massively

Another book is out about how gurus don't know what they're talking about. As seen on The Browser:

It's Hard to Make Predictions, Especially About the Future

The new book Future Babble explains why dart-throwing monkeys are better at predicting the future than most pundits.