Carnegie Market Blog

 

Survey Results and the “Enernet”

Posted by Brent Luce on Jan 31, 2017 3:15:22 PM

 Survey Results

The anxiously awaited results of the 2017 stock market survey are in!  The good news is that the blog readers appear to be equally as smart as the leading Wall Street strategists, who are rewarded with seven or eight figure salaries.  The bad news is that the blog readers are stuck with the same guess as the strategists, who are very frequently wrong.  The median guess of my readers was 2401 -- the most common guess of the ten superstar Wall Street Analysts was 2400, so we hit that right on the mark.  Below, is a histogram of the guesses.  As you can see, there were very few “flat” responses, lots of “up a little” responses, and a smattering of “down” guesses.  In the table below, looking at history, it becomes evident that market returns do not occur in a normal distribution, although the guesses would suggest people think that they do.  In fact, the seemingly safe bet of “up 0% to 10%” only has occurred about 1/4th of the time over the past 50 years, but almost half of the respondents (and Wall Street) guessed in this range.  Historically speaking, “down” and “up 20%+” are just as common as “up 0-10%”.  Given those two options, which would you choose?

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Topics: Stock Market Contest, Solar Power, Enernet, Iron Ore, International Stocks

2017 Stock Market Contest

Posted by Brent Luce on Jan 17, 2017 4:43:23 PM

 

Stock Market Contest

Now is the time of year where people like to make predictions about the coming year, so please make your guess for the 2017 (12/31/2017 closing price on S&P 500) stock market contest by responding to this email or clicking here. You must respond before the next blog, which will likely be next week.  I hope many of you answer so we can have some “big data” on this subject matter.  Here is a five-year chart of the S&P 500 to help frame your guess:

S&P 500 (Five Years)

Congratulations to Todd Maugans, the 2016 winner who guessed 2240 – the S&P 500 ended up at 2238.83, so he was very close.  Interestingly, last year, the blog readers were somewhat bearish, guessing only a two percent rise in the market.  It turns out that the market beat 97% of your guesses (see chart below).  Last year’s guesses were split into two distinct groups, although even the bullish group mostly underestimated the end result.  I have some theories on how this year’s guesses will turn out, but I will keep those to myself so I do not bias you.  

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Topics: $GOOGL, Interest Rates, Strategist Predictions, Stock Market Contest, $DPZ, $AMZN

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