To be a top caller is to be king. Top callers never have to be right. They can just be early. And top calling, like love, means never having to say you're sorry.
Those of us who are on the firing line every day of our lives listen and watch these top callers with envy. We know these Cassandras have often positioned themselves to benefit from a decline ahead of launching their sirens. Many are motivated to drive the market down to play catch-up with the averages. Maybe they can toss some lighter fluid on a simmering selloff and get a real conflagration going so they can make their month or even their year.
But their stock positioning and their performance at that moment are often not discussed in conjunction with their calls.
Moreover, it would be impolite to say to a top caller: "I have followed your comments for a long time and I see this is your fifth top call during a period when the Dow Jones Average has gone from 18,000 to 20,800." It just seems rude to point out, "I have read your investment letters for several years now and you have repeatedly said this market is dangerous and you were very underexposed to the market each time, so are you still underexposed or short and why should we listen to you now?"
But that would be exactly the right thing to do. That level of accountability is rarely on display, though, especially when it comes to interviewing famous hedge fund managers. Some of the most quoted managers have hated this market for ages and have sat out or bet against 10%, 15%, even 20% rallies with impunity, often because in another portion of their career they were very right and made a lot of money.
That past record has caused great deference to the point where it's given immunity to a whole class of top callers.
I can't do anything about the etiquette of scrutiny. Once a hedge fund manager has made a billion bucks, we have to accept that he or she's got a right to speak his or her mind and we should listen.
I know, though, if I were interviewing the person, I would hold the top caller accountable by simply quoting their admonitions from previous occasions when the market was substantially lower and ask them why they were wrong back then and could they be as wrong now.
I don't care if that hedge fund manager is mad at me or cuts me off or threatens me for bringing up the missed calls.
I don't care because I know that many people who are listening and watching are going to take action. They are going to sell shares in good companies that do not need to be sold because they trust these managers and don't know their records or when they called their last top. I think these home-gamers wouldn't sell if they knew how wrong many of these top callers have been.
More important, many of the top callers don't really trade individual stocks. They trade S&P 500 futures. Yet, their comments will scare people out of stocks of companies that are doing so well. The top callers rarely acknowledge any selectivity. It's "the market" they hate. But that call spooks people out of the stocks of Home Depot (HD) and Johnson & Johnson (JNJ) and Boeing (BA) and 3M (MMM) and the shares of so many other companies that shouldn't be sold.
Again, though, top calling means never having to say you are sorry for freaking people out of the best companies money can buy.
Oh, and just in case you think I am being too harsh, let me tell you what I do care about: someone who has been bullish, who has liked many individual stocks, and is now selling those stocks for reasons that are well-stated and well-articulated with excellent evidence that they are due for a fall.
That's not only valuable, it's actually newsworthy.
So, top callers, knock yourselves out. You will get the run of the joint regardless of what I think or say or do. But remember you may be hurting people's chances to get wealthier and that does matter, at least to me. I think you owe them the truth about your previous prognostications. The question is will you ever be made to own up to them? Of course not because, in the end, you've never been wrong, you've just been early.