Guru Grades

Bill Cara: Populist Market Pundit (Last Updated 5/9/08)

As suggested by readers, we evaluate here forecasts for the overall stock market from the commentaries of Bill Cara since January 2005. Bill Cara is "a fiercely independent and objective person, a family man, a strategically and tactically skilled buy-side securities trader, and an enemy of those who stand opposed to self-empowerment and social equity." He "offers free, unbiased, expert advice to help people trade global capital markets successfully..." The chart below extracts those highlights from his commentary most indicative of the direction of the overall stock market and shows the performance of the S&P 500 index over the 5, 21, 63 and 254 trading days after the publication date for each item. Red plus (minus) signs to the right of specific items indicate those the market subsequently proves right (wrong). We conclude that:

• Bill Cara covers a range of asset classes in his commentaries, including stocks, bonds, gold, currencies and commodities. He also discusses many individual stocks. We focus here exclusively on his forecasts regarding the broad U.S. equity market, as conveyed in his long "Week in Review" commentaries (especially the introductory and "U.S. Equities" sections of these commentaries).
• We skip those commentaries that offer no testable forecast for the overall stock market and those in which the forecasts are especially vague or conditional. It is sometimes difficult to infer his forecast horizon.
• Mr. Cara cites a wide range of fundamental, technical and economic data to explain his stock market forecasts. He has been mostly pessimistic in his outlook for the U.S. economy and broad stock market over the sample period.
• One of his multi-step forecasts proved to be about equally right and wrong, so we evaluated it "0" and graded him both right and wrong.
• Based on subsequent stock market performance and our judgments about his forecasts for overall stock market direction, Bill Cara has been right 40% of the time, which is well below average. His forecast sample size is moderate, as is our confidence in this conclusion.

In summary, Bill Cara's fairly persistent belief in a pending bear market decline has resulted in a below average stock market forecasting accuracy since the beginning of 2005. Confidence in this conclusion is moderate.

See Guru Grades for a snapshot of the accuracy of various experts in predicting the U.S. stock market, including links to evaluations of the commentaries of other individual market pundits and gurus.