Author Topic: Goldman Slashes Its Forecast for S&P 500  (Read 5809 times)

Brilliantine

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Goldman Slashes Its Forecast for S&P 500
« on: September 29, 2015, 11:42:37 AM »
And here is the link, and my initial reaction is "so what?" but...

My real question is, does anyone keep these guys honest? Aside from the fact that this guy revises his year-end target 90 days before the end of the year, does anyone tally up the score as to how many yearly forecasts these guys got right?


Kaspian

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #1 on: September 29, 2015, 11:58:09 AM »
Imagine how different it'd be if financial institutions were forced to pay a large fine for each incorrect "forecast"?  Goldman couldn't even see its own elephant in the room in 2007.  ....Or they chose to ignore it.   I don't think they could find their ass with both hands and a flashlight.

I'm going with this lady instead.


DaveR

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #2 on: September 29, 2015, 12:16:22 PM »
My real question is, does anyone keep these guys honest? Aside from the fact that this guy revises his year-end target 90 days before the end of the year, does anyone tally up the score as to how many yearly forecasts these guys got right?

I had come across this rating page before: http://www.cxoadvisory.com/gurus/

When you get paid to forecast, you forecast. Bonuses for being right? Though it looks like the average forecaster should be flipping a coin since that would be more accurate.

2Birds1Stone

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #3 on: September 29, 2015, 12:42:01 PM »
i would be impressed if we were back over 2000 by years end.

Mr. Green

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #4 on: September 29, 2015, 01:29:28 PM »
The hilarity of it is that they said they see the S&P back at 2100 just 8 days prior. Idiots.

Jeremy E.

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UnleashHell

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #6 on: September 29, 2015, 01:52:45 PM »
If they are that good then this would be an article from 3 months ago - not after the S&P had already gone on a downwards turn.

marty998

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #7 on: September 29, 2015, 04:06:59 PM »
You can bet your house Goldman are buying all the shares sold by the panicked sellers reading that report.

Jeremy E.

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #8 on: September 29, 2015, 04:08:51 PM »
You can bet your house Goldman are buying all the shares sold by the panicked sellers reading that report.
I think they are just trying to get people to buy their actively managed high expense ratio mutual funds.

kendallf

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #9 on: September 29, 2015, 04:21:42 PM »

I had come across this rating page before: http://www.cxoadvisory.com/gurus/

When you get paid to forecast, you forecast. Bonuses for being right? Though it looks like the average forecaster should be flipping a coin since that would be more accurate.

The best part of that is the angry emails they got from people like Jim Cramer.  Look dude, you have a lot of money; why not just admit you're an entertainer?

Indexer

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #10 on: September 29, 2015, 05:40:23 PM »
Anyone who makes a prediction that is a set number at a set time is a hack..... 

When someone says we are more likely to see returns in the 5-7% range over the next 10 years instead of the 10% historical average, and then they give data to back it up = has some idea what they are doing.  Example: Pro. Shiller, Nobel Prize winning economist.

The very fact that GS had a # target for Dec 31st 2015 is embarrassing. The fact that they didn't get close to it just makes it worse.

Analysts have a nasty habit of lowering or raising their predictions AFTER the market moves in that general direction.

Moral of the story: Fire Goldman and buy an index fund.

Brilliantine

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #11 on: September 30, 2015, 01:23:58 PM »
Anyone who makes a prediction that is a set number at a set time is a hack..... 

When someone says we are more likely to see returns in the 5-7% range over the next 10 years instead of the 10% historical average, and then they give data to back it up = has some idea what they are doing.  Example: Pro. Shiller, Nobel Prize winning economist.

The very fact that GS had a # target for Dec 31st 2015 is embarrassing. The fact that they didn't get close to it just makes it worse.

Analysts have a nasty habit of lowering or raising their predictions AFTER the market moves in that general direction.

Moral of the story: Fire Goldman and buy an index fund.

Preaching to the choir but yes... :)

Brilliantine

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #12 on: September 30, 2015, 01:24:40 PM »
I wonder if after today's closing Goldman will update their 2015 forecast. :)

Bardo

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #13 on: October 01, 2015, 05:45:11 AM »
Back when I had an investment adviser I asked him what it even meant to have a "target" for S&P or stock prices or whatever.  It's not like they can control it, and they back off from saying it's a prediction.  He couldn't even come up with an answer, which clued me in that the whole concept was bogus.  It's just junk they foist on clients in order to sound wise.


YoungInvestor

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #14 on: October 01, 2015, 11:04:27 AM »
Back when I had an investment adviser I asked him what it even meant to have a "target" for S&P or stock prices or whatever.  It's not like they can control it, and they back off from saying it's a prediction.  He couldn't even come up with an answer, which clued me in that the whole concept was bogus.  It's just junk they foist on clients in order to sound wise.

If done legitimately, it reflects an analyst's opinion of the value of the underlying business and of the progress expected on the near-ish future.

Say I think company A would be well priced at 12x earnings (due to its operating environment, stability and what have you), and I expect 2016 earnings to be 5$ per share, I'll set a target of 60$, which corresponds to the intrinsic value that I attribute it.

Of course, there can be doubts on the legitimacy of some of these opinions, which often end up being little more than guesses.

StockBeard

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #15 on: October 01, 2015, 01:31:34 PM »
Of course, there can be doubts on the legitimacy of some of these opinions, which often end up being little more than guesses.
+ now imagine doing that for all the companies in the S&P 500, and getting all of them right enough that your prediction number is not complete random crap.

YoungInvestor

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #16 on: October 01, 2015, 08:10:01 PM »
Of course, there can be doubts on the legitimacy of some of these opinions, which often end up being little more than guesses.
+ now imagine doing that for all the companies in the S&P 500, and getting all of them right enough that your prediction number is not complete random crap.

Actually, for the same reason why diversification reduces volatility, your odds of being in the right ballpark would be better if you did that for 500 stocks than just one.

Jeremy E.

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #17 on: October 02, 2015, 10:15:31 AM »
Of course, there can be doubts on the legitimacy of some of these opinions, which often end up being little more than guesses.
+ now imagine doing that for all the companies in the S&P 500, and getting all of them right enough that your prediction number is not complete random crap.

Actually, for the same reason why diversification reduces volatility, your odds of being in the right ballpark would be better if you did that for 500 stocks than just one.
You would also have to guess which companies will be dropped/added to the S&P. Although the top 100 companies make up a large majority of the S&P 500 so the ones near 500 probably won't make much difference.

aspiringnomad

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Re: Goldman Slashes Its Forecast for S&P 500
« Reply #18 on: October 02, 2015, 11:29:33 PM »
And here is the link, and my initial reaction is "so what?" but...

My real question is, does anyone keep these guys honest? Aside from the fact that this guy revises his year-end target 90 days before the end of the year, does anyone tally up the score as to how many yearly forecasts these guys got right?

Well, their sophisticated algorithms predicted that Germany would crush Brazil by a score of 7-1 in the World Cup semis....oh, no wait, they actually had Brazil winning the Cup...The crystal ball must have been temporarily out of order. Please pay them so they can fix it and make you lots of money.

http://www.goldmansachs.com/our-thinking/outlook/world-cup-sections/world-cup-prediction-model-update-6-26-2014.html