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Prepare for Stormy Waters in the 2020 Stock Market

In my daily review of the headlines, I went to MarketWatch, one of the websites for financial news that is followed by many investors. Here is the image just below the “fold” in the site:


I’ll give you one guess where you are going to click. Points for the graphic though - just imagine your portfolio is the tiny boat, just waiting to get crushed by that volatility storm.

So if you take a moment and click into the article, you’ll find this:

Think 2019 has been hectic? You ain’t seen nothing yet.

According to our call of the day from John Mauldin of Mauldin Economics, 2020 “will be the most volatile year in history” for investors

So who is John Mauldin? According to his bio on Forbes, “I am a financial writer, publisher, and New York Times bestselling-author. Each week, nearly a million readers around the world receive my Thoughts From the Frontline free investment newsletter.”

I don’t doubt he’s a smart guy, and obviously, he has a significant following. The problem? He hasn’t been a particularly good forecaster. According to CXO Advisory Group, Mauldin made 211 forecasts, with a 39.9% accuracy rate from 2005 to 2012. That placed him in the lower side of the “gurus”. 

Read some more headlines of his from his Forbes article list:

“Modern Monetary Theory Could Destroy This Nation”

“The End of Risk-Free Retirement”

“If This Pattern Holds True, The U.S. Economy Could Face The Worst Stagnation in History”

“This Unprecedented Credit Crisis Will Redefine How We Invest”

I’m not trying to intentionally pick on John. I will give him this - he (or, more probably, his clickbait-savvy editors) can write a great headline. Let’s all see this for what it is though, clickbait. Throw all the superlatives into headlines and articles and the readers will come. As an investor, it is difficult to determine what is opinion, what is fact, and what is trash.

The problem is that with a track record likely worse than a coinflip and virtually no accountability, these “gurus” are presented as experts. As we saw above, this expert has a fairly dismal record predicting anything and you should treat his articles as such. You’re better off finding a good chili recipe (Texas-style, thankyouverymuch).

Clint Walkner