J.P. Morgan Asset Management recently published an article that studied the worst "apocalyptic" market predictions from a number of prominent market participants. Who were some of the luminaries that made stunningly bad predictions about a market collapse? They included George Soros, Jeffrey Gundlach, Carl Icahn, Paul Krugman, Tom Demark, Laksham Achuthan and Nouriel Roubini.
In order to measure how costly the predictions actually were, the author measured the opportunity cost of shifting from stocks to bonds from the time of the call to November 8, 2019. The "losses" ranged from 25% to over 60%.
What is most surprising about this study isn't that these very successful market participants make such terrible predictions, but that so many people still believe that predictions of this type are of value. I've attempted to make the point in hundreds of articles that it isn't predictions that make you the big money in the market. It is strategy and money management that produces great returns.
What is obvious about these calls is that people such as Soros, Gundlach and Icahn didn't even follow their own advice. The calls generated attention and publicity but no serious investor would act on them and then just sit there. What saved them from disaster was changing their minds and employing a different strategy.
This study only covered some very bad negative calls. There will be plenty of equally bad positive calls at the next top just like there were back in 2000 and 2008.
What is important is to recognize that these sorts of predictions are not actionable advice. They are pure entertainment and if you act on them without a plan to cut losses then you will, more likely than not, suffer tremendous losses.
Predictions are the enemy of good trading. Focus on adapting to changing conditions and developing effective strategies. The fortune-tellers usually end up being the brunt of jokes.