Nobody Knows Nothing, Episode 653

If you’re still investing based on Wall Street’s forecasts, you’re like a clown in the zoo.

Bloomberg with a Two For Tuesday…

First up: Goldman Sachs Abandons Five of Six ‘Top Trade’ Calls for 2016

 Goldman Sachs Group Inc. has exited five of six top trading recommendations for the year after they were thwarted by financial-market turmoil linked to signs of a slowdown in global economic growth.

The New York-based bank closed its call for dollar strength versus an equally weighted basket of the euro and yen, recording a potential loss of about 5 percent, Charles Himmelberg, chief credit strategist, wrote in a note to clients Tuesday. Goldman has also ended a bet on five-year five-year forward Italian sovereign yields versus their German counterparts for a loss of about 0.5 percent, Himmelberg wrote.

“five-year forward Italian sovereign yields” get the f*** outta here.

What else?

Oh, there’s also this: More Wall Street Strategists Are Cutting Their S&P 500 Estimates

Just five weeks into 2016, seven of the 21 strategists tracked by Bloomberg have lowered their projections for the Standard & Poor’s 500 Index amid a rout that wiped more than $2 trillion from prices. The cuts have reduced the average annual estimate, the first time that’s happened this early in a year since the Iraq war in 2003.

“The reason there’s more divergence among forecasters is that equity strategists have a huge problem with predicting two wild cards right now: China and oil.”

Newsflash: You don’t need “wild cards” thrown into the mix. No one can ever do this reliably, it has nothing to do with oil or China. Next year it’ll be interest rates and Greece, or Chicken and Waffles or whatever comes down the pike.

Stop already. Strategists are interesting to read for context and to understand what other large pools of money and investors are thinking. Even the strategists themselves hate the fact that they have to play the target game.

And how could you not know better by now? Of course you do.

One of the benefits of having an investment process with diversification and a rules-based orientation is that you don’t end up chasing the guesses of others. Anyone’s guess is as good as anyone else’s in a world of almost infinite variability.

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Discussions found on the web
  1. Analysts are already walking back their big calls for 2016 – FragLaz commented on Feb 11

    […] “Strategists are interesting to read for context and to understand what other large pools of money and investors are thinking. Even the strategists themselves hate the fact that they have to play the target game,” wrote Reformed Broker’s Josh Brown in a blog post on Tuesday. […]

  2. Sústreďme sa na dôležité veci - Peniaze sú čas commented on Feb 12

    […] stane v budúcnosti, vedia rovnako málo ako my všetci ostatní. Trefne to pomenoval Josh Brown: Nikto nič nevie, epizóda 653. Ak sa vám to nechce čítať, tu sú 2 ukážky – Goldman Sachs zrušil 5 zo svojich 6 […]

  3. Nobody Knows Nothing | al fin next level commented on Feb 12

    […] If you’re still investing based on Wall Street’s forecasts, you’re like a clown in the zoo… Anyone’s guess is as good as anyone else’s in a world of almost infinite variability. __ Joshua M. Brown […]

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