Financial Opinion and Insights

Where have the All the Market-Timers Gone?

Jim Lorenzen, CFP®

Jim Lorenzen, CFP®

Does anyone remember Joe Granville?  He was the market guru back in the early to mid-1980s.  He was even quoted in Time magazine – according to Robert Shiller’s book, Irrational Exuberance – as saying, “I don’t think that I will ever make a serious mistake in the stock market for the rest of my life.”  He even predicted he would win the Nobel prize in Economics!  In 1981, his investment newsletter was grossing over $6 million a year and when he once told his readers to “sell everything” it actually triggered a massive market sell-off with a record number of shares trading!  Just before the ’87 crash, he again warned of a crash and he was obviously correct… his picture made the covers of magazines and papers around the world.

Skill?…. or luck.  Maybe the crystal ball developed some fog.   A few years ago the Hulbert Financial Digest reported that the Granville Market Letter “is at the bottom of the rankings for performance over the past 25 years – having produced average losses of more than 20% per year on an annualized basis.”

I’m still looking for the market-timer that actually produces consistent results over the long term – no one can seem to name them.

The long-term winners have always seemed to be those who buy value.  And, we can actually name a few:  Benjamin Graham, Warren Buffett, and Peter Lynch will do for starters.