Guru Grades

Donald Rowe, Superbull? (Last Updated 12/24/09)

We evaluate here the market commentary of Donald Rowe since June 2002, available via Zacks.com. Donald Rowe, publisher of The Wall Street Digest, is one of Zacks' "pros." Mr. Rowe's commentary for Zacks is discontinued as of May 2008. The chart below extracts highlights from his commentary 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 that the market has subsequently proven right (wrong). We conclude that:

• Donald Rowe is one of the most bullish market pundits we have encountered, having predicting records for the DJIA and S&P 500 index in 2005 and proclaiming the next few years as U.S. equity investor paradise.
• With respect to market timing, Mr. Rowe was unequivocal but somewhat early in calling the strong 2003 advance. Neither 2004 nor 2005 nor the first half of 2006 lived up to his expectations. He has continually postponing "Liftoff" pending better behavior from oil prices and the Federal Funds Rate . He recently wavered, but is now back to bullish.
• Based on subsequent stock market performance and our judgments about the accuracy of Donald Rowe's market direction forecasts, his bottom-line advice about market direction has been right 42% of the time, below average. The forecast sample size for Mr. Rowe is modest, as is our confidence in this conclusion.
• As noted above, Donald Rowe's commentary for Zacks has been discontinued. In the absence of any stock market forecasts in the past year, we are designating the review of Donald Rowe as "dormant." We retain this record for historical reference as part of an overall analysis of guru accuracy.

Here are additional notes to augment the tabular forecast sample:

From Peter Brimelow in MarketWatch (12/24/09): "...puzzling is the survival of letters like Donald Rowe's Carnegie Management Group (down 19.42% over 10 years)... [Down 24.4% in 2009.]"

In summary, Donald Rowe's excess of optimism has resulted in a below-average stock market forecasting accuracy the past few years. Confidence in this conclusion is modest.

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