Surely by now many of you recall that Mike Stathis, our Chief Investment Strategist had warned of a Dow ~6000 in the 2006 release of America’s Financial Apocalypse.
Thereafter, he discussed more certainty with this forecast in August and November of 2008, and he pinpointed the bottom at around 6200. He also discussed that the collapse would likely occur in the first quarter of 2009 when Q4 earnings were released.
By early March 2009, with the Dow at around 6500, Mike advised readers to begin buying. All of these forecasts were published in the public domain where they remain today. We do not know anyone else in the world that made these accurate predictions. But these critical calls would be just a small part of Mike’s spectacular track record, which continues to place him further ahead of the pack.
Shortly after the market lows, we launched the first newsletter (recently named the Intelligent Investor). This newsletter has consistently provided very accurate forecasts for foreign currencies, emerging markets and the Dow Jones Industrial Average.
As well, it has provided the opportunity for readers to land huge investment returns with relatively low risk due to Mike’s ability to understand valuation as well as his accurate market forecasts.
In this piece we are going to demonstrate the accuracy of Mike’s market forecasts over the past few months. We will include summaries of his market forecasts (for the U.S. and emerging markets) from the Intelligent Investor and Market Forecaster newsletters.
In the future, we will be compiling the complete forecasting record since the Intelligent Investor newsletter was released on May 27th 2009 so you can see how accurate these forecasts have been. For now, let’s have a look at the past three months.
November 2010 Market Forecasting Section for the Dow Jones Industrial Average
As the first chart shows, when the November newsletter was released the Dow was just below 11,200.
In the November newsletter issue, after presenting an extensive analysis, Mike concluded the following.
“The chart below shows my estimates for the Dow over the next 3 months. At this point, I would place a much higher chance of the market reaching the 11,750 top than the 9900 bottom, although the odds for both extremes are small. 11,500 is certainly doable prior to the end of the year.”
November 14, 2010 Special Report
In the next chart, notice how the Dow soared within two days after we released the November newsletter. Thereafter, the Dow retraced these gains, leaving investors confused as to its future direction.
To reaffirm readers, we released a special report on November 14th 2010. At that time the Dow was at 11,200.
Mike concluded that this correction would continue over the short term, but held firm with his intermediate-term bullish forecast for the Dow. Immediately after this report was released the Dow lost another 200 points, consistent with his short-term forecast as seen in the previous chart.
Let’s have a look at Mike’s conclusion from the November 14th report.
In this report, Mike forecast the Dow to sell off in the short-term, giving up the gains sparked by the announcement by the EU and IMF. However, he expected the intermediate–term bullish trend to remain intact. Thus, he expected the Dow to rebound after the sell-off.
“The Dow is currently testing the 11,200 support. From this chart alone, it would appear that the Dow will continue with its correction over the short-term.”
The next chart illustrates that this is precisely what occurred. We posted this forecast on the website.
He then reiterated the longer-term bullish trend in the Dow.
“As you can see, I have marked in the gaps that have been filled. Of most importance is the most recent gap which has been filled. This gap has also been surpassed, which is a bullish sign.”
“The Dow remains in a bullish trend from a long- and intermediate-term standpoint.”
December Market Forecasting Section for the Dow Jones Industrial Average
Upon release of the December newsletter, the Dow was sitting at around 11,360.
After presenting an extensive analysis, Mike made the following conclusion:
“I would place a 70% chance of the Dow reaching the 11,650 mark between now and the end of January.”
The next chart is one of many he used to illustrate the positive technical merits supporting his thesis.
January Market Forecasting Section for the Dow Jones Industrial Average
By the time the January newsletter was released, the Dow was just under 11,700.
Once again in the market forecasting section Mike laid out a very descriptive analysis and made the following conclusion regarding the forward direction of the Dow.
“Right now I feel the Dow could test the 12,000 level over the next few weeks. This is going to depend on the upcoming economic data. In fact, the market stands a good chance of trading sideways in 2011 if it crosses 12,000.”
“Get ready because I think the Dow could top 12,000 by the end of January or early February.”
The final chart shows the progress made by the Dow since the release of the January newsletter. As you can see, the Dow is retesting the 12,000 level precisely when he stated, towards the end of January.
Below, I show a chart of the Dow since November 2010 to January 24th, showing the gains made in the Dow over that period…gains predicted by Mike.
Since 2006, Mike has warned of the economic collapse, as detailed in America's Financial Apocalypse. In Cashing in on the Real Estate Bubble (released in early 2007) he advised readers to short Fannie, Freddie, Novistar, Accredited Lenders, Fremont General, the banks and homebuilders. He even discussed the General Motors and General Electric would get hit hard.
He also mentioned that Countrywide was likely to have a large exposure to sub-prime mortgages. Note that no one realized this. Countrywide was thought of as a very safe and well capitalized firm through at least the first half of 2007.
Finally, he advised readers to buy gold, oil, healthcare and most important, keep a good deal of cash and wait for the collapse.
He advised his clients to short the U.S. stock market, banks and homebuilders in October 2007. A few months later we began warning people in the public domain of the collapse, beginning with his first online publication, “Stay Away from Traditional Asset Classes” in early May 2008.
Next, in August he warned of a Dow 6200 that would surface in early 2009. He reiterated this forecast several times through November 2008. And when the Dow hit its lows of 6400 in March 2009, he advised investors to start buying. Since then, he has kept readers of his newsletter in the market for 90% of the time.
In contrast, all of the other bears have kept their readers out of the market because they are bears for life. You won't make any money following these extremists, just like you won't make any money following the perma-bull extremists. You need to know when to shift gears.
If you want to know where the Dow and emerging markets are headed and if you want to be armed with the best investment analysis and forecasting available today, you should subscribe to the Intelligent Investor or the Market Forecaster.
There is one particular firm that advertises itself as the “largest market forecasting firm in the world.” The problem is that the market forecasts from this firm has been horrendous. Rather than advising their readers to ride the market all the way up since the 6400 lows in March 2009, they have advised their readers to stay out. In fact, they even advised people to short the Dow using 200% leverage in November 2009.
As you may know, bigger is often not better. Wal-Mart cannot match the quality of Saks Fifth Avenue. All one really needs is one person who knows what’s going on; not a bunch of guys pumping out back and forth forecasts which keep you confused. By now you should know who that person is.
Mike Stathis has the best overall track record of forecasts of anyone in the world since 2006. We are so confident of this that we have issued a $100,000 reward for the first person who can prove otherwise.
If you want to be left behind in the dust, we advise you to listen to others.
But if you want to be armed with the best investment analysis available, you should subscribe to one of our three newsletters.
I invite you to join other subscribers who wish to become great investors, as they learn how to navigate the financial landmines that promise to be commonplace for years to come. The best way to achieve this difficult task is to subscribe to one of our investment newsletters.
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