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FY2016 Market Predictions

seayakin

Graduate Poster
seayakin
Joined
Nov 30, 2003
Messages
1,437
I have been looking at the FY16 market predictions and most are negative although some are predicting a disastrous drop in stock values.

Business Insider
http://www.businessinsider.com/wall-street-2016-stock-market-forecasts-2015-11

Goldman Sachs predictions as reported by Fortune
http://fortune.com/2015/11/25/goldman-sachs-stock-market-predictions-2016/
Goldman predicts that stocks will return just 3% in 2016. Stocks are up a measly 1.5% in 2015.
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It seems to me that based on past trends, the market will have continued slow growth with some corrections causing a drop but I am neither a trained financial analyst or economist.

I've seen wilder predictions about a 50% crash in the markets due to severe structural problems in the financial sector.
 
.. and it will be sunny unless it is cloudy or something else.
 
I worry about China.
Seems like oil should go up in 2016. But I can also think of reasons why it might not.
The Fed appears to be likely to start raising interest rates later this month. That should be negative for bonds. Meanwhile the ECB is going in the opposite direction, stomping on the gas at the same time as the Fed is pumping the brakes. Nowhere is inflation to be found. At least not in consumer prices.
 
Am I misunderstanding something (again)?

"A disastrous drop" = "only a 3% gain"

When I hear "disastrous drop" I'm thinking Black Tuesday, not a 100% increase in value over 2015.
 
The thing that I never get about these things is this - lets say you are an investor, have been for many years and have done well. Then today you wake up and read that someone is predicting the "market" (whatever that is) will only go up 3% next year. What do you do different tomorrow compared to what you were or weren't doing yesterday? I have no idea what the answer is.

The easier solution is to ignore the "market" (again, whatever that is), and invest in great businesses. Makes life so much easier.
 
The Central Scrutinizer said:
The thing that I never get about these things is this - lets say you are an investor, have been for many years and have done well. Then today you wake up and read that someone is predicting the "market" (whatever that is) will only go up 3% next year. What do you do different tomorrow compared to what you were or weren't doing yesterday? I have no idea what the answer is.

The easier solution is to ignore the "market" (again, whatever that is), and invest in great businesses. Makes life so much easier.
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Some of that has to do with your investment strategy. Are you looking for short term gains or long term gains? The Goldman Sachs prediction is not so calamitous if it came true but the more extreme predictions are predicting a 50% decline in the market.

I take this with a grain of salt and can't speak to the quality of this person's opinion but here is the link.

http://www.profitconfidential.com/economic-analysis/upcoming-stock-market-crash/

and

http://www.marketwatch.com/story/stock-market-crash-of-2016-the-countdown-begins-2015-02-25
 
Perhaps more interesting, is the fact that there is information being attributed to Warren Buffett that may or may not be true. Are some people trying to drive panicked behavior?

I can't find a reliable source that Warren Buffett is actually predicting a 50% decline in FY2016.
 
seayakin said:
Some of that has to do with your investment strategy. Are you looking for short term gains or long term gains? The Goldman Sachs prediction is not so calamitous if it came true but the more extreme predictions are predicting a 50% decline in the market.
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I'd be OK with that. I love when stocks go on sale.
 
seayakin said:
Perhaps more interesting, is the fact that there is information being attributed to Warren Buffett that may or may not be true. Are some people trying to drive panicked behavior?
Click to expand...

Pro Tip: If something is "attributed" to Warren Buffet on a random blog, it means he didn't say it.

seayakin said:
I can't find a reliable source that Warren Buffett is actually predicting a 50% decline in FY2016.
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I wonder why? :confused:
 
seayakin said:
Some of that has to do with your investment strategy. Are you looking for short term gains or long term gains? The Goldman Sachs prediction is not so calamitous if it came true but the more extreme predictions are predicting a 50% decline in the market.

I take this with a grain of salt and can't speak to the quality of this person's opinion but here is the link.

http://www.profitconfidential.com/economic-analysis/upcoming-stock-market-crash/

and

http://www.marketwatch.com/story/stock-market-crash-of-2016-the-countdown-begins-2015-02-25
Click to expand...

There were those predicting a similar crash this year, and the year before, and the year before that. Eventually they may be right.

The Warren Buffet thing? All kinds of charlatans like to claim that "Buffet says" this or that.
 
Puppycow said:
There were those predicting a similar crash this year, and the year before, and the year before that.
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I remember being told around 1980 that stocks were way overpriced and I'd have to be crazy to continue to hold stocks in that environment.

Oh, Google tells me 1980 ended with the Dow at 963.99.

There are always dire predictions. Sometimes they'll be correct.

But as Central Scrutinizer says, stocks become a bargain in down markets, and between the miracle of dollar-cost-averaging and the compounding effects of reinvested dividends, one can do quite well without worrying about day-to-day, or even year-to-year fluctuations.

As a fun exercise, look at:

http://www.1stock1.com/1stock1_1764.htm

Summary: someone who in 1980 thought Apple might have a future and bought $5,000 worth and held it through thick and thin would today have...

...don't want to spoil the punch line - click the link if you're curious.
 
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Fast Eddie B said:
Recommended reading:

Fooled By Randomness - Nassim Taleb

A Random Walk Down Wall Street - Burton Malkiel
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Hm. Is that a real name? Nassim Taleb? Hm.

If I move the a and the N then the im and the al and the S.
Then move the remaining be and T and the remaining s.
I get: Best Animals.

What about Burton Maikiel, the first sounds normal but the latter, well.
Move around the the letters and I get: Market Bullion.

Alright, I'll give it a try.

The Devil’s Financial Dictionary — Jason Zweig

P.S. Yeah. I had trouble placing the the G, the W, and the Z.
 
The Central Scrutinizer said:
Pro Tip: If something is "attributed" to Warren Buffet on a random blog, it means he didn't say it.

I wonder why? :confused:
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I may not be a brilliant skeptic, but believe me, I was very skeptical of the claim. It seems to me sometimes there are certain financial information sites like "the street" and the "motley fool" that like to make regular fairly dire predictions (based on my own informal observations) but I wonder sometimes if the intent is less to inform and more to influence the market.

It is all purely speculation on my part with no real data to back this up.
 
seayakin said:
I may not be a brilliant skeptic, but believe me, I was very skeptical of the claim. It seems to me sometimes there are certain financial information sites like "the street" and the "motley fool" that like to make regular fairly dire predictions (based on my own informal observations) but I wonder sometimes if the intent is less to inform and more to influence the market.
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Option C: More to influence clicks, which equate to advertising dollars.
 

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