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No. of Recommendations: 42
It's always instructive to come by every now and then and read the latest quackery from the assortment of quacks that regularly patrol these waters. For board management, 2006 was a particularly bad year, full of bold but flawed predictions of such consistency and predictability that one has to wonder if serious intent has been abandoned. Has the board become just another "partisan, ideological, or agenda driven" enterprise or is it, as the owners intended, a source of knowledge to "educate, amuse, and enrich"? Each of us must draw our own conclusion(s) but the fact that year-to-year posting activity has fallen by 32% suggests that board content definitely needs a makeover.

Let's take a quick look at some of the forecasts made during the year and see how close they came to what actually happened.

"Gold will do OK but the big move will come later in some sort of Bernanke panic." --- Gold up 23%

"U.S. enters a recession..." ... Oops, that forecast was for 2005.

"There will be a recession in 2006." ... Corporate profits rise by 20%.

"There will be a huge slowing of the U.S. economy. A recession will hit later in the year." ... GDP up 3+%

"This market is going down like power windows." ... DOW up 16%

"The worst performing DOW stock will be GM...a dead man walking." ... GM up 58%, leading the DOW.

"Cisco is totally irrelevant." ... CSCO up 59%

"Home prices (will) drop almost everywhere by at least 10%." ... Home prices actually rose in many parts of the U.S., including California, Florida, and Arizona.

"Oil will soar to well over $100 and stay high. ... Oil drops the most since April 2005 and closed today at $58.

(The) U.S. economy is on the ropes. ... DOW sets an all-time high on December 29.

"Q4 growth will be close to 0% and (the) U.S. economy will enter a recession by Q1, or at the latest Q2, of 2007." ... Nouriel Roubini, chief quack, 10/3/06

I could on but you get the idea. As 2007 begins, the leading indications of an expanding economy...job creation, low inflation, rising consumer and business confidence...are flashing green. This augurs well for the immediate future. No one can predict with certainty whether the markets will rise or fall because markets are capable of unnatural acts. Yet 2007 looks to me like another year of growth for stocks. In my opinion, there will be no recession in 2007. As before, I believe the U.S. economy is headed higher with the DOW crossing 14,000 before the end of the year.

Happy New Year to everyone.

Andy
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No. of Recommendations: 4
Beware of quacks turning optimistic.

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Let's take a quick look at some of the forecasts made during the year and see how close they came to what actually happened.
Andy

===================================

Andy,
Interesting review of past predictions.

Did you make any predictions for last year?....If so, how did YOUR predictions turn out?
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..."Home prices (will) drop almost everywhere by at least 10%." ... Home prices actually rose in many parts of the U.S., including California, Florida, and Arizona....

I'd like to see the stats on Arizona for 2006, cuz just not be true. Checked my house the other day, after coming down 70,000 dollars from the original 579k ask, I see it has been pulled from the market. Sits empty, eating up someone's capital, the one next to it still has the For Sale sign out, flapping gently in the Phoenix breezes. That be the facts.

Speaking of, glad to see Ben Stein slap Kudlow and Bush upside the head yesterday on their ridiculous claims, especially on the mythical federal tax revenue gusher. Mr. Stein quite rightly pointed out that all Bush/Kudlow/Laffer have proved again is that by cutting taxes you can seriously cut tax revenues, increase spending at an incredible rate, and stuff 2.8 trillion dollars into the economy and corporate profits in a orgy of standard borrow and spend Keynesian economics. Quite an achievement!

Such an achievement that wrong headed Americans threw the bums out not more than a couple months ago because they were so overjoyed at Kudlow's story and the fact that a barrel of oil was all the way down to $60 or so, gold was running rampant and the DOW saw 16%, more or less the global story. Silly Americans, so ungrateful they just don't recognize how good they've got it. If you believe Kudlow and some at TMF. How very odd.



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No. of Recommendations: 17
Andy, I normally like your posts. Not because I agree with you - I usually don't. But I'm a firm believer that it's only through the process of entertaining all viewpoints - good and bad - that we have any chance of discerning the truth about the world around us. It's the only way I know of to gain any wisdom.

Alas, your post here is more boastfulness than anything. It illuminates little. Just like those of some of the bear brethen here when they, similarly, post things based primarily on emotion.

Specific and targeted economic prognostications, though mildly entertaining, rarely prove to be accurate in any substantive way, regardless of who posits them. If it were that easy to nail down the future, after all, we'd all be rich.

On its nominal measures, 2006 was a good year for the economy and the stock market. Not so good for real estate.

But there are lots of disquieting things going on under the surface which ought to give us pause.

Who knows what 2007 will bring? Or 2008? I sure don't. Perhaps more jolly good times. Maybe new highs in the stock market. And maybe real estate will achieve that soft landing that all the folks in that business keep talking about. Hey I'm all for it. You got my vote.

But whatever happens, I wouldn't brag too loudly. A couple days ago there was a thread here which talked about the recently released 2006 Financial Report of the U.S. Government. I challenge anyone to read that report (you can get it here: http://fms.treas.gov/fr/06frusg/06frusg.pdf ) and then explain to me what end-game scenario you can possibly paint which would warrant your great optimism going forward.

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House Price Appreciation by State
Percent Change in House Prices
Period Ended September 30, 2006

Arizona, 16.37%
http://www.ofheo.gov/media/pdf/3q06hpi.pdf

Doesn't say average or median, but pretty remarkable.

The W.P. Carey School of Business at ASU gives these figures

Greater Phoenix November 2005--2006, single family resale, median,
Scottsdale...6%
Chandler...0%
Gilbert...(-5%)
Mesa....0%
Tempe...0%
Phoenix...5%
El Mirage...(-10%)
Glendale...0%
Peoria...(-4%)
Sun City...(-16%)
Sun City West...(-9%)
Surprise...(-7%)
Avondale...(-8%)
Goodyear...(-12%)
http://www.arizonarealestatenotebook.com/

Based on just walking out the door personally think W.P. Carey is more accurate and closer to the market. The guy who came down 70,000 in three months and pulled the house from the market is in Glendale. See that time and again here for at least six months now, but maybe the federal statistics are more accurate. I doubt it.
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No. of Recommendations: 7
I don't pretend to be a stock maven, just someone with more life and investing experience than most on this board. I've made money in the markets, I've lost my share, too. But I have tried to learn from my mistakes. My investing secrets are no secrets, more like common sense. When someone touts a stock with no capital, no profits, and questionable assets (DLKM) I mark him/her down as a charlatan. When I find a company with great management, terrific products, and strong growth (AAPL) I take the elastic band off my wallet. Lastly, I seldom believe what I read in the newspapers or hear on TV. Columnists and commentators have space/time to fill and generally have no competency in the subject under consideration. Case in point: the so-called "housing bust." The fact that sales volume is down doesn't translate into a "bust." It's housing prices that count. And the median price of a home across America either rose or remained flat in 2006. There was no bust nor will there be as long as unemployment and interest rates remain low.

For those of you who wonder about my results in 2006 I refer you to posts #171913 and #194755. Both AAPL (up 18%) and VRSN (up 10%) did well. And if you bought AAPL after July 1 (which I did...again) you did very well. I've been bullish on housing my entire life...and remain so. In my opinion, buying a house continues to be the best investment the average person will ever make provided he/she plans to remain in the house for at least 5 years. Post #197576 provides an up-to-date summary of housing prices in the most active markets in the U.S. The data is provided by DataQuick, an expert source you can trust.

Andy








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No. of Recommendations: 3
"The worst performing DOW stock will be GM...a dead man walking." ... GM up 58%, leading the DOW.



I think this is from my prediction post last year...
http://boards.fool.com/Message.asp?mid=23564464&sort=username

The complete line was:

7. The worst performing Dow stock will be GM.
...
GM is a dead man walking. I expect the company to cut the dividend this year, but this will just slow the inevitable slide into bankruptcy. The product is terrible, and even worse, has a terrible image. Healthcare costs will be their undoing.

I admit that my prediction was spectacularly wrong as to the worst performing stock on the DOW. I contend that they did cut the dividend and it is just slowing the slide to inevitable bankruptcy. This slide may take several years, but I do not see any way that they can return to true profitability.

By the way, if you did take action on my two trade ideas (I did not say to short GM or any other Dow stock) you would have done quite well.

9. Single best long idea is EWZ (Brazil ETF)
10. Single best short idea is CRM (Salesforce.com)


Stock 1/16/06 12/29/06 Change
EWZ 37.08 46.85 +26%
CRM 38.99 36.45 -6.5

That ignores the fact that any trader would have gotten out of CRM in the summer when it was rallying. Overall, I do not understand why you think my predictions were so terrible.

Charles
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For those of you who wonder about my results in 2006 I refer you to posts #171913 and #194755. Both AAPL (up 18%) and VRSN (up 10%) did well.
Andy
=========================================

Andy, 

good results indeed.  But not much better than the "standard issue" 2006 Vanguard returns available to most. 
Please also note the 10yr returns. ie:

VFINX	Vanguard 500 Index Fund Investor Shares	2006:15.64%	10yr:8.34%

VTSMX	Vanguard Total Stock Market Index Fund 2006: 15.51%, 10Yr:8.57%

VEXMX	Vanguard Extended Market Index Fund 2006: 14.27%, 10Yr:8.70% 

VISVX	Vanguard Small-Cap Value Index Fund 2006: 19.24%,  10Yr:10.19%
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Sorry, you can only recommend a post to the Best of once.

Excellent summary. Thanks.

Guess I better check out this year's predictions, too, so I know what's not gonna happen. ;-)

-Darth
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In my opinion, there will be no recession in 2007. As before, I believe the U.S. economy is headed higher with the DOW crossing 14,000 before the end of the year.

To be fair to Andy, he did call this one.
Its fun to go back and look at the 2007 predictions here.
Ray
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Ray,

the revisions have not come in yet....Andy and you need to wait about ten months to see whether there was a recession or not during the last year. I believe we are in a rather sad recession.

Dave
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To bet on no recession in this period of time is stupid plain and simple. That does not mean the markets cant turn and run, but the banks could be down and out for years. The housing market and the builders have gone to H as we all know and may well stay there for quite some time.

While the FED pumps up the money supply, the economy on main street is in pain.

The last time we had a recession in 2001 the govt told us that the growth rate was 6.1%......fool me once shame on you....fool me twice shame on me......

This is the second undeclared recession in my slightly older years that I fully see and feel as the gubbermint says all is well.....

Dave
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