H/T to http://pragcap.com for this find.
On CNBC recently two market “experts” recently were interviewed and predicted what the market will return in the upcoming years.
Jeff Hirsch of the Stock Trader’s Almanac says the stockmarket is headed to Dow 38,820. On the other end of the spectrum is Robert Prechter who says the Dow is headed to 1,000.
Both predictions are ludicrious. I already dissected Prechter’s Dow 1,000 prediction in a post here. I noted the absurdity in his argument.
For Hirsch to be correct the market would have to return 9.4% a year for the next 15 years. This is not impossible, the market has returned on average 9.5% for the past 80 years or so.
However, to make a prediction based on what the Dow will be in 15 years is the ludicrous part. Remember Dow 36,000 and 100,000 predictions in 2000?
None of these “experts” predicted that the tech bubble would crash, we would have a huge housing bubble, 9/11, two wars, and the Dow would be down signifcantly 10 years later.
Below is the video. Funny to watch two people who are on complete opposite extremes debate a topic which they are clueless about. I would love to see them debate each other.
Lesson here is be wary of anyone who tells you they can predict where the market is headed.
