Whether loudly proclaiming their market predictions on national television, or quietly voicing their views on their own personal websites, these market academics got it right...or did they?
Remember, even a broken clock is right twice a day. Some of the people below have been saying the same thing year after year; eventually they will be right. Others - the ones worth listening to - use thoughtful analysis to determine what will happen next.
If you decide you want to follow their opinions, you can create a Google alert, so that anytime their name appears in a new article you'll immediately be updated.
1. Peter Schiff, President of EuroPacific Capital
Peter Schiff was repeatedly ridiculed on live TV for his doomsday predictions, yet he remained adamant that a severe market crash and credit crises were headed our way.
Watch his past interviews at Peter Schiff Was Right 2006 – 2007.
His views look and sound good... until you dig a little deeper. The truth is Peter has been saying the same thing year after year. You'll get the idea in Being Wrong For 5 Years Makes Peter Schiff Right Now.
Although Peter did accurately predict the crash, he did not make the right changes in client portfolios. In the Wall Street Journal Article, Right Forecast by Schiff, Wrong Plan?, it points out that the recommendations Peter made in 2008 had disastrous results for his clients.
2. Meredith Whitney, Former Oppenheimer Banking Analyst
Meredith Whitney is the former Oppenheimer & Co. banking analyst who called Wall Street's meltdown, making bold statements in early 2008 about the crisis about to hit banks across America. She recently left Oppenheimer to start her own firm.
As time goes on we'll have to see what Meredith has to say. If her predictions are due to skill, not luck, she should successfully be able to identify the banks most likely to survive this crisis.
3. Jeremy Grantham, Co-founder of GMO, A Privately Held Investment Management Firm
With an unprecedented degree of accuracy Jeremy Grantham predicted the last decade of equity and bond returns in exact rank order.
In August, 2008, in an article in The Economist, titled The Long And Short Of It, you can find this prediction:
“More generally, Jeremy Grantham, GMO’s chairman, thinks that the equity bear market will continue for another couple of years, with the S&P 500 dropping by around 10-15% from here. But he warns that the chance of a meltdown—a drop well below fair value—has increased.”
In March of 2009, Jeremy's tune changed and recommends cautiously adding money back into equities. He's a thinker, not a gambler, which makes his views worth listening to.
What's Jeremy saying now? Read more in Future Market Predictions.
4. William Bernstein, Financial Theorist And Author
In 2002 William Bernstein wrote a book called Four Pillars Of Investing in which he wrote,
"The Glass-Steagall Act separated commercial and investment banking. This last statute has recently been repealed. Sooner or later, we will likely painfully relearn the reasons for its passage almost seven decades ago."
Then, in March 2008, he posted commentary titled The Dark Side Of The Moon, in which he writes,
"The debt markets are so out of whack that we are now at a point where credit risk is being rewarded more than equity risk... This cannot last for very long: either spreads will tighten rapidly, equity prices will fall rapidly, or both."
William Berstein has a knack for identifying imbalances; definitely one to listen to.
5. Robert Schiller, Professor of Economics, Yale University
In this November, 2008 New York Times article called, Challenging The Crowd In Whispers –Not Shouts Robert Schiller says,
"In 2005, in the 2nd edition of my book “Irrational Exuberance,” I stated clearly that a catastrophic collapse of the housing and stock markets could be on its way. I wrote that this might “result in a substantial increase in the rate of personal bankruptcies, which could lead to a secondary string of bankruptcies of financial institutions as well,” and said that this could result in “another, possibly worldwide, recession.”
Schiller's work is based on factual data; when he talks, I'd be inclined to listen.
6. 8 Who Saw The Crisis Coming...And 8 Who Didn't
Find more gurus in this August, 2008 Fortune article titled 8 Who Saw The Crisis Coming And 8 Who Didn't, where authors Katie Benner and Christopher Tkaczyk profile eight people, from bankers to traders to economists, who saw the crisis coming, and eight more, including Alan Greenspan, who didn't.
