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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (44614)	1/2/2009 10:47:08 AM
From: Haim R. Branisteanu	Read Replies (3) \| Respond to of 217545

QUOTE = Around the turn of each year forecasts are made for the following year. I find making predictions amidst so much government interventions to be particularly difficult. In addition, we so called “experts” have a horrendous forecasting record. Just as a reminder: in late December 2007 Barron’s published an article titled “A bullish call — Wall Street’s seers forecast more gains for stocks next year” (see Barron’s Online, December 17, 2007) in which 12 well-known strategists listed their 2008 earnings estimates and year-end 2008 price targets for the S&P 500. The estimates were as follows: Richard Bernstein, Merrill Lynch: 1525, Thomas Lee, JP Morgan: 1590, Tom McManus, Bank of America: 1625, Ian Scott, Lehman Brothers:1630, Larry Adam, Deutsche Bank: 1640, Abhijit Chakrabortti, MorganStanley: 1650, Jonathan Morton, Credit Suisse: 1650, Abby Cohen,Goldman Sachs:1675, Tobias Levkovich, Citigroup: 1675, David Bianco, UBS Securities:1700, Jonathan Golub, Bear Stearns: 1700, Francois Trahan, ISI Group:1750. Their 2008 S&P earnings estimates ranged from US$85.30 to US$101.21 per share (the average forecast predicted a climb of 4% to US$92 per share). None of the strategists predicted a recession and Tobias Levkovich believed that stocks were “screamingly cheap relative to bonds” (at the time the S&P 500 was at 1464). Similarly, Abby Cohen noted that the S&P 500 was trading at just 15.6 times average 2008 estimated earnings - well below the average P/E of 18.6 times earnings during periods over the past 57 years when inflation was at similarly muted levels. For 2009, these “experts” now expect the S&P to increase to around 1100.