The problem with most pundits is that in order for them to justify their existence, they have be talking all the time. That’s fine and dandy if you’re talking about a sports team or the latest twist on your favourite reality TV show, but when it come to macro-economic analysis and financial market forcasting, it’s a dangerous affair.
2008 showed pretty damn well that most punditry is a crystal-ball affair as 97% the ‘experts’ were off the mark by varying degrees in predicting the debacle in financial markets. As for the 3% that correctly saw the end of the world coming, 99.9% of that group failed to anticipate the jaw droping 70% rally in equity markets that immediately followed the descent into hell. Astute and correct market predictions are 1/3 brains, 1/3 experience and 1/3 timing (or luck, depending on how you term it). Take David Rosenberg of Gluskin Sheff + Associates for example. He is one of the perma-bears out there who repeatedly shows up on CNBC to bitch slap the perma-dolts. How big a bear is he? Enjoy:
There is this illusion that we are in a sustainable recovery, but instead what has happened is that the government fooled the public by printing massive amounts of money and expanded the Fed’s balance sheet to levels nobody ever thought could be possible. Meanwhile, all the problems in State budgets are being ignored, as are the huge numbers of either empty houses or houses where the owners are not paying their mortgages, not to mention the changes in some basic accounting rules to help banks hide their losses.
Sounds like the life of the party to me, no? But while I appreciate, and begrudingly agree, with much of what Mr. Rosenberg writes, the 1/3 that isn’t working for him is timing. The last thing anyone should have been last March when the likes of Teck was under $4 was bearish. A purchase of BC’s proud miner at that time would, today, net you a healthy capital gain of 1,000%. Granted, last March was one of those once-in-a-lifetime evets (we all hope at least, eh?) that everyone looks back on with the shoulda, woulda, coulda schpeel, but my point is that had you swallowed what most pundits were saying at the time you would never have even thought about venturing into equities, which was the worst decision to have made.
Being right too early is the same thing as being wrong. I don’t think Mr. Rosenberg is wrong, I just think he’s right too early. So when perusing the punditry, keep in mind that the experts justify their own existence by repeating themselves and are loath to change their position, as to do so undermines that expertise they are espousing.
In this case, some dating advice my grandmother gave to me a long time ago seems suitable to the situation: you have to have a sampling of things before you know what feels right. Dating. Pundity. Same stuff, different pile.
Sic
