April 16, 2009
– Comments (6)
Federated's Tice Says S&P 500 Is Poised to Plunge 62%
Not "about 2/3" Not "50% or more"
Hard to take something like that seriously.
It will start at 10:36 am tomorrow precisely.;-)
Fibonacci number. I guess 50% didn't look like enough.
Bent - Did you actually watch the video? I just watched it and he doesn't actually say that. Where there getting the 62% from is his comment that he expects the S&P to eventually fall to the 400 range (which he says is right around or slightly below book value). It is Bloomberg that took that quote and turned it into the 62%. So, give Bloomberg a hard time, but lay off Tice for this one. One can certainly disagree with him, but that's not his quote.
By the way, your link didn't work. Here is the correct link to the video.
He also states that it will continue to move lower in waterfall fashion. Meaning we'll probably have a couple more plunges, each followed by a bear market rally, before we finally reach that bottom number. Therefore, the Bloomberg title is very misleading! They make it sound as if he thinks we'll drop 62% within a matter of days or weeks.
I didn't give Tice a hard time specifically, I gave the notion a hard time. Whoever put the false precision on is the one that can have the ridicule. I don't particularly care. What I do care about is the ridiculousness squared -- first that anyone can predict where the market, or any index, is headed, and next that anyone can do so with any sort of precision at all.
Reminds me of an actuarial joke I saw in the economist. A farmer and an actuarial are standing on a road and there are two big fenced off areas. One has a whole mess of cattle grazing in it. In the other, they could see two lonely cows.
Farmer says to the actuarial: How many cows you think there are out there?
He replies: 502.
Farmer: 502? How do you get that?
A: Well, there are about 500 cows over there, plus the two in there.