2015 Market Forecasts from Several Perspectives

MJG

Hi Guys,

The 2015 edition of the Las Vegas MoneyShow ended a few days ago. I attended only some of their many presentations. I wasn’t motivated to mention my planned attendance because in past years, the MFO membership responded with a deep yawn. That’s okay; I learn.

One novel aspect to the 2015 general format was the introduction of a Cannabis section that preceded the conventional MoneyShow agenda. The Cannabis sessions were paid events so I did not attend any of these presentations.

I did not take many notes, but I do have a general takeaway feeling that the professional market wiz-kids expressed relative to the market direction for the remainder of the year. A majority fraction of the experts are guardedly projecting positive returns from a narrowing market.

They observe that the current narrowing market is typically representative of aging Bull market runs. The present Bull market is third longest in history and will become the second longest if it extends into next year. One reason they are sanguine about the market has to do with the Presidential election cycle.

Presidential candidates will paint ultra-rosy pictures for their special programs. Louie Navellier jokingly advised that we should vote for the happiest candidate to best extend the likelihood of positive returns. On the negative signal side, Jim Stack cautioned that only 17% of the forecasters see near-term approaching dark clouds. That’s a contrarians warning sign. As usual, we get to choose our own poison.

For informational purposes, you might be interested in a Bull and Bear market summary paper assembled by Ed Yardeni. Here is a Link to that 10-page summary:

http://www.yardeni.com/pub/sp500corrbear.pdf

I did make a note of one interesting observation made by one of the MoneyShow exhibitors (I didn’t record his name). He noticed that the S&P 500 dividend exceeded the 10-year Treasury bond yield for a brief period in mid-January. Apparently that’s an extremely rare happening. He reported that whenever that did occur, the stock market rewarded investors with high payoffs.

Here is a Link to a January MarketWatch article that examined this occurrence:

http://www.marketwatch.com/story/stock-dividend-yields-are-above-treasury-yields----and-thats-bullish-2015-01-20

If the article has been posted earlier, I apologize. I completely missed it. Sorry Ted.

The three earlier occurrences are really insufficient to make grand statistical inferences, but the next year outsized rewards for these events were eye-popping. More fuel for the fire. Good luck guys integrating these data into your decision making.

Best Regards.

Junkster

I found some of the info in your post interesting so thanks. But you do know these Dream Merchants have no more insights or clues to where the markets are headed than you, me, or the man in the moon?? In 1999, I spoke at a Las Vegas trading symposium with over 40 other speakers. The behind the scenes stories I could tell you about these so-called experts would make your hair curl.

Dex

Thanks for the post. I think there are two related factors in this market - the economy and the FED.
If the econ slows down & the FED does nothing - stocks flat for the year

If the econ slows down & the FED raises rated - stocks take a hit and ultimately down 5-10% for the year.

If the econ some growth & FED raises - stocks up 5-10%

Dex

Junkster said:

But you do know these Dream Merchants have no more insights or clues to where the markets are headed than you, me, or the man in the moon??

I think their main job and money making is to get paid subscribers. I think also, that the value of their information is directly inverse to the amount they say or write.

Junkster

Dex said:

Junkster said:

But you do know these Dream Merchants have no more insights or clues to where the markets are headed than you, me, or the man in the moon??

I think their main job and money making is to get paid subscribers. I think also, that the value of their information is directly inverse to the amount they say or write.

Amen!! You got it! I was the only one of the speakers who actually brought his last 10 years of brokerage statements. Most self proclaimed experts couldn't trade their way out of a paper bag. Ask them for some validation of their prowess or that they even trade, and they will give you 1001 excuses why that is not possible. Someday I should repost something from the 90s I penned titled - Crooks, Con Men, and Charlatans.

hank

@Dex - I'll disagree slightly. The biggest factors in near-term fluxuations (days, weeks, months) are the big traders in a dozen or so varieties - hedge funds and pension funds for starters. The stuff you and I read/hear about concerning the Fed, the economy, sentiment indicators and the moon are used by these big traders and their unwitting media cohorts to justify or "explain away" near term movements that would otherwise appear quite random. That hidden ingredient is probably the reason most of us small fry are not very good market timers.

PS: I have no data to support this. But I know it to be true.

Junkster

Also, somewhat related, I would wager the average MFO "small fry" has outperformed the average "large fry" hedge fund over the past decade and most certainly since 2008. Knowledge is very over rated in this game. It's all about how you manage risk!

MJG

Hi Jungster,

Thank you for your response.

I was not surprised. Approaching these events with a grain of salt is not enough; each presentation must be assessed with a block of salt.

Not all exhibitors are equally trustworthy - nothing new here. Some guys are more honest than others. Exposure time to their work helps. For example, Jim Stack, in an introductory session, said that if a potential client came to him now with nothing invested in the market, he would reject that would-be customer. Stack currently believes the market is approaching a peak and cash is a better protective, defensive position. It's too late to be a new buyer.

Others disagreed. I like to integrate the many divergent opinions to form an informal wisdom of the crowd consensus.

Besides, Vegas is a fun couple of days.

Thanks for your informed participation in this exchange.

Best Wishes.