Guru Grades

Dennis Slothower's Timing (Last Updated 2/26/10)

We evaluate here the stock market commentary of Dennis Slothower via Zacks.com and MarketWatch.com since June 2002. Dennis Slothower, who is editor of the Stealth Stocks and On the Money newsletters. According to Stealth Stocks, Mr. Slothower "is an absolute master at taking into account how world news – the true 'market-moving events' – will impact each and every investment in his trading portfolio." The table below extracts highlights from this 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:

• Dennis Slothower relies on a combination of technical and fundamental factors in forecasting stock market behavior. He emphasizes the importance of crude oil prices and money supply to the stock market.
• With respect to market timing, Mr. Slothower did fairly well in recognizing the market bottom in late 2002 but was slow by several months in committing fully to the 2003 upswing. On short to intermediate term calls, he is sometimes right and sometimes wrong.
• Based on subsequent stock market performance and our judgments about the accuracy of Dennis Slothower's market direction forecasts, his bottom-line advice about market direction has been right 47% of the time, about average. His forecast sample size is moderate, as is our confidence in this conclusion.

Here are additional notes to augment the tabular summary below:

From Peter Brimelow in MarketWatch (2/1/10): "...over the past 12 months, Stealth Stock Daily Alert is up only 2.1% by Hulbert Financial Digest count, compared to 28.3% for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Still, over the past three years, Slothower is up an annualized 3.93% against negative 5.25% annualized for the total return Wilshire 5000.And over the past five years, the letter was up an annualized 3.45%, versus just 0.93% annualized for the total return Wilshire 5000."

From Tim Smith in MarketWatch (7/24/09): "From January 1995, when the Hulbert Financial Digest began tracking his service, until the end of October 2007...his service modestly lagged the Wilshire 5000. It returned an annualized 8.9%, vs. 11.9% for the Wilshire. Slothower, however, went mostly into cash around that high... From November 2007 to June 2009, his service's T-bill position has returned a positive annualized 0.5%, while the Wilshire 5000 has lost 24.7%."

From Peter Brimelow in MarketWatch (12/4/08): "...over the past three years, during which the total return DJ-Wilshire 5,000 has lost negative 8.93% annualized, Stealth Stocks Daily Alert has achieved a annualized gain of 5.16% by Hulbert Financial Digest count; Stealth Stocks has achieved 6.6% annualized and On the Money has achieved 1.99% annualized. ...over the past five years, Stealth Stocks has achieved an annualized gain of 2.47%, vs. negative 1.16% annualized for the total return DJ-W 5,000. And over the past 10 years, On The Money has achieved an annualized gain of 5.71%, vs. a 0.19% annualized loss for the total return DJ-W."

In summary, Dennis Slothower's bottom-line stock market forecasting track record is about average. Confidence in this conclusion is moderate.

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.