The Dow Jones Industrial Average jumped above 15,000 for the first time in its history Friday morning May, 3, 2013. It’s up more than 120% from its 2009 lows. And the S&P 500 Index closed at an all-time high of 1,600. The major indices jumped 1 percent after an unexpectedly strong April jobs report showed 165,000 new jobs and the unemployment rate slipped down to 7.5%.
The steep wall of worry about the national deficit, weak corporate revenue growth, tax increases and struggling overseas economies continues to be thwarted by strong corporate balance sheets, ready credit markets, and investors’ increasing confidence.
This most recent spate of good market news is a reminder that nobody can predict the direction of the market with any degree of accuracy. In retrospect, here’s a link to 36 predictions from so-called market gurus from March 2009 to the present. The article was appropriately titled “The Idiot-Maker Rally: Check Out All of the Gurus Made to Look Like Fools By This Market.”
Choose your favorite prediction. My favorites include:
“Is this the dawn of a new era? Are we off to the races again? I’m not so sure. Only a fool predicts the stock market, so here I go. This sure smells to me like a sucker’s rally. That’s because there aren’t sustainable, fundamental reasons for the market’s continued rise.” —Andy Kessler on May 12, 2009
“If you were to jump in right now, you’re crazy.” —Dave Rovelli, managing director of US equity trading at Canaccord Adams, on July 17, 2009
“I think what’s happened is still a bear market rally. And as a result, whether we hit new lows or not remains to be seen. I think we very well could go back and test that 666 on the S&P, maybe go a bit lower than that. And this decline may very well spill into next year.” —Gary Shilling on Oct. 23, 2009
Obviously, hindsight is 20/20. The lesson to be learned from these predictions and thousands of others over the years is that “Nobody, I repeat, nobody can accurately forecast the market.”