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Trading Lessons

Nouriel Roubini's 2009 Stock Market Calls Track Record

Stock-Markets / Mainstream Media Nov 03, 2009 - 07:22 PM GMT

By: Nadeem_Walayat

Stock-Markets

Best Financial Markets Analysis ArticleNouriel Roubini, Dr Doom the academic economist who has repeatedly peddled the stocks bear market case to a captured audience of naive investors has again come out with another in a series of Doom stories that has the effect of scaring investors away from the market.


Contrary to the media hype surrounding Nouriel Roubini's market calls, from what I can actually determine from his actual track record is turning out to be truly appalling, which implies a media machine feeding the mainstream press and publicity machine to perpetuate myth of accuracy on the stock market at least.

Nouriel Roubini's Stock Market Calls 2009 -

Back at the stock market bottom in early March 2009, Nouriel forecast that the S&P would fall from 676 to below 600 during 2009- Bloomberg :

“My main scenario is that it’s highly likely it goes to 600 or below,” Roubini said today in an interview at the Chicago Board Options Exchange Risk Management Conference in Dana Point, California. A level of “500 is less likely, but there is some possibility you get there.”

Then again a couple of weeks into the stealth bull market rally, Roubini emerges to state - Bloomberg - Roubini Says Stocks Will Drop as Banks Go ‘Belly

The global equity rebound in March that sent the Standard & Poor’s 500 Index to its best monthly advance in 17 years is a “bear-market rally” and U.S. Treasury yields will “remain relatively low” as investors flock to the safest assets, Roubini said. Treasury Secretary Timothy Geithner’s new plan to remove toxic debt from financial companies won’t be enough for insolvent banks, he said.

Though the academic economists that populate the bankrupt bailed out banks do not come out any better.

Merrill Lynch & Co.’s chief North American Economist David Rosenberg said today the S&P 500 may bottom out at 600 in October, lowering his estimate after the benchmark’s decline last week. That level is about 20 percent below November’s level of 752.44, which was then widely viewed as the “fundamental low,” Rosenberg said.

Throughout the duration of the stealth stocks bull market, Roubini has been WRONG, where he kept silent during the rally but soon as the market dipped for a few days - Straight Times - 21st April 2009

Mr Roubini, a professor at New York University's business school and former adviser at the US Treasury Department, also said he expected China's economy to grow up to 5.5 per cent this year, missing the government's 8 per cent target.

Hopes the world economy will stage a faster recovery this year have fueled a six-week rise in global markets, with major benchmarks on Wall Street and in Asia up more than 20 per cent over just six weeks. But Prof Roubini was doubtful and predicted markets would test the lows seen in March.

And again in the Independent on 21st April 2009.

While an increasing number of analysts have in recent weeks urged investors to go back into equities, Mr Roubini, a professor at New York University's Stern School of Business who has emerged as one of the most respected economic voices in the wake of the credit crunch, warned yesterday that he didn't yet see a buying opportunity.

He holds little faith in the recent market rallies, which prompted some to suggest a recovery was underway. "I'm still cautious and bearish," he said. "I believe we are closer to a bottom in the stock market than a year ago, but this is a bear market rally."

Back in July as the Stealth bull market again corrected, Nouriel Roubini re-appears with another bear market call - Global Investor - Market bear Roubini sticks to dour forecasts

"Macro news, earnings news and financial shocks are going to be worse than expected and that's why I believe this is still a bear market rally," he told BNN

"I am more a realist than a pessimist. I'll be the first one to call for the bottom of this economic contraction, recovery of the market when I see a sustained economic and therefore financial recovery," he said.

And again Roubini came out of the woodwork at the tail end of the recent correction to peddle that a 20% drop is coming - USA Today - 28th October 09

"Investors are hoping for a V, but there are plenty of signs it could be a U-shaped recovery," he warns, adding that his base case — a 60% probability — is for a sluggish, U-shaped recovery. If his base-case scenario plays out, Roubini says, stocks will be ripe for a price correction of 10% to 20%.

Trading Lesson - In my opinion, every time Nouriel talks about the bear market resuming usually coincides with a market bottom. However this also suggests when Nouriel gets bullish it could be time to head for the exits!

The problem is that Nouriel Roubini and other academic's WILL eventually be right, i.e. he will eventually get his drop in stock prices. BUT those that followed his calls will have missed out on one of the greatest bull runs in history or worse lost money shorting the market, as basically where the stock market is concerned, Nouriel's actual track record as illustrated by the actual record shows that he does not have a clue!

And where economics is concerned, barely 6 months ago Roubini stated that the U.S. Economy would not recover from recession until 2010, and therefore plenty of excuses followed the recent U.S. GDP data. What is Nouriel Roubini's REAL track record on the economy ?

For more on the dangers of following academic economists see - Academic Economists Lead Governments to the Edge of the Abyss

Source : http://www.marketoracle.co.uk/Article14751.html

By Nadeem Walayat http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 400 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

RICH HARTMANN
04 Nov 09, 11:50
DOESN'T HAVE A CLUE?

I'M NOT EXACTLY SURE WHAT YOU ARE TRYING TO PROVE? FROM A MACRO ECONOMIC STANDPOINT, HE IS DEAD ON.

From a ponzi-market perspective he is wrong.

Who could predict intervention and manipulation.

If I were to race against a race car a distance of 1 mile, and I am on foot, an educated forecaster would give the racecar the edge. ...but now if the governmet decides 1 second after the race starts, that I only have to run 30 feet, and then the government decides, lets put walls in the way of the car... Then all of a sudden, the prediction you made before the race looks stupid.

Nouriel's predictions look a lot better without the rules being changed. Have you ever realized.... that maybe the rules wind up changing to account for the inneptitude in calculating the shortfalls he sees?

Enjoy the rally. A lot of people did from 2006 - Oct 2007. (especially the people who bashed Nouriel while the market ran on false hope and fake credit) hmmmm sound familiar again??

Bullish or bullsh!t, you decide

Rich H


Nadeem_Walayat
04 Nov 09, 13:08
Who could predict intervention and manipulation ?

See here - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470

The point ? The whole point of investing is to accumulate early during bull markets and distribute during the latter stages of a bull market. Similarly to accumulate shorts during the early stages of a bear market and cover during the latter stages. Perma-views are Dangerous! And will ultimately result in an account wipe out ! The last bear market was -54%, the current bull market is +56%.
Gene Colburn
05 Nov 09, 01:08
Cashing out

I like a number of others are just waiting for my 401K to get close to where it was before the last crash. Now looks like a good time to cash out. My 401 has recovered about 60 percent from what it was a year ago. I do not think any of the charts can account for what is about to take place. Of course what do I know, I am just a naive investor who over invested in the promise of honest markets. We have none now.

Any one who believes otherwise is a fool.


Andrew H,
05 Jan 10, 14:15
joke

How superficial can someone be to writte something like that.

He was dead on. calling the crisis.

I can't believe I am writing this.

Waste of time.

Sir. why don't you post a larger time frame from 2007 maybe.

I can't believe people can go that low.

Mr Nadeem can we see some interviews with you on Bloomberg or CNBC where we can judge your opinions.


Nadeem_Walayat
05 Jan 10, 15:46
CNBC and Roubini

What ?

You want me to start prancing about on CNBC ? then when would I get the time to do accurate analysis ?

I GO OUT OF MY WAY TO KEEP MYSELF HUNGRY FOR $$$$$$!!!

YOU WILL NEVER FIND ME ON ANY MAINSTREAM MEDIA BECAUSE I TELL THEM NO !

Its the truth, BBC have called me, the Daily Mirror and others and I say NO ! Because, basically I can't stand the mainstream press, that endlessly regurguitate clueless garbage.

Now I see Ambrose is at it again, talking about hyperinflation well 12 months ago he was singing the praises of money printing and at the time I wrote this clown does not know what he is talking about as what he is advocating is a trend towards hyperinflation now 12 months on he clocks on to it as though a light bulbs gone on. Yeh maybe I should do an article on how the telegraphs Ambrose keeps flipping like a coin, afterall I did right one in March that their call for another 55% drop in UK house prices was garbage.

That's what happens when one lets themselves turn into media whores that seek headlines that will soon be forgotten rather than accuracy,

Its easy for a media whore to state every month for publicity that the stock market will crash, but it LOOSES money for the readers !

I have only looked at Roubini ONCE in recent years and that was in November 3rd and what I found is that his analysis SUCKS!

At Dow 9,600 he said that the Dow was going to plunge by 10% to 20%, at about the same time I said it was going to 10,500.

THE WHOLE POINT OF ANALYSIS IS TO MONETIZE ON IT, IF ALL ONE DOES IS SHOW THEIR FACE ON CNBC AND THEN REFER BACK CONSTANTLY TO THE ONE APPEARANCE THAT WAS RIGHT CONVIENIENTLY FORGETTIGN THE LONG STREAM WHEN ONE WAS WRONG THEN WHAT IS THE POINT ?

SHOULD IT NOT BE HELD UP TO PUBLIC SCRUTINY?

WATCH HOW ROUBINI comes out with another stock market plunge call (which he may already have) and then crow loudly if it did fell when the truth is in black and white on the above chart.

Enough time wasted on this.

NW.


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