Guru Grades

Paul Tracy: Authoritative? (Last Updated 11/19/06)

We evaluate here the the market commentary of Paul Tracy available via Zacks.com since October 2002. Paul Tracy, founder and Chief Investment Strategist of StreetAuthority, is one of Zacks' "pros." StreetAuthority describes itself as "a research-intensive financial publishing firm that aims to level the playing field for small investors by giving them access to the ideas and insights of some of the country's top investment analysts and writers." The table below extracts highlights from his commentary and shows the performance of the S&P 500 index over the 5, 21, 84 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:

• Paul Tracy is a long-term investor, generally advocating being in stocks even when short-term prospects for the overall market are unfavorable. He seeks to overcome poor markets by choosing the right sectors and stocks.
• With respect to market timing, Mr. Tracy was a little late to see the strength of the 2003 advance, when being early was better because the first stage of the advance was so strong. He was also slow in taking his foot off the pedal in early 2004. He has apparently stopped issuing public forecasts via Zacks.com.
• Based on subsequent stock market performance and our judgments about the accuracy of Paul Tracy's forecasts, his bottom-line advice about market direction was right 54% of the time, above average. The forecast sample size for Mr. Tracy is moderate, as is therefore our confidence in this conclusion.
• Since he expects below average performance from the overall market over the next several years, Mr. Tracy advises against investing in broad indices.
• Paul Tracy's commentary at Zacks.com has been essentially forecast-free with respect to the overall stock market for over a year. We will therefore not update this page again pending a new forecast from him. We retain this record for historical reference as part of an overall analysis of guru accuracy.

In summary, Paul Tracy's sense of the overall stock market direction is above 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.

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