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Bob Hoye: Rational Fringe?

| Last Updated: November 14, 2012 | Posted in: Individual Gurus

Guru Accuracy Rating
This is below average. Current guru average is 47%

As suggested by a reader, we evaluate here the stock market commentary of Bob Hoye via “Pivotal Events” commentary at SafeHaven. Bob Hoye is Editor & Chief Investment Strategist of Institutional Advisors, which states that: “The term ‘Rational Fringe’ has been used to distinguish our research from the mainstream convictions that financial history was random and could be managed by inspired manipulation of interest rates. Our models are based upon a thorough review of the highly volatile conclusions of 5 previous new financial eras. This provides forecasts of significant trend changes with enough lead time to formulate strategy.” The table below quotes forecast highlights from the cited source and shows the performance of the S&P 500 Index over various numbers of trading days after the publication date for each item. Grading takes into account more detailed market behavior when appropriate. Red plus (minus) signs to the right of specific forecasts indicate those graded right (wrong) based on subsequent market behavior, while red zeros denote any complex forecasts graded both right and wrong. We conclude that:

  • Bob Hoye’s essential forecasting approach involves identifying a consensus view that he considers at odds with broad historical experience.
  • His commentaries at SafeHaven have several large gaps before mid-2008, indicating the possibility of non-systematic sampling. Systematic posting dates back only to mid-2008.
  • Bob Hoye’s forecast sample is small and fairly short in duration, so confidence in the measurement of his accuracy is low.

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.

    S&P 500 Index  
Date Comments from:  Bob Hoye via “Pivotal Events” Excerpts at Safe Haven 21-Day Return 63-Day Return 126-Day Return 254-Day Return  
11/14/12 Senior stock indexes are not oversold enough to really clear the decks for an extended rally. …a low (for nimble traders) is possible, soon, followed by choppy action into the end of the year. 4.3% 12.2% 21.8% 32.2%
11/8/12 …a significant decline seems to have started.
This would mainly involve stocks and commodities…
3.0% 10.2% 18.6% 28.3%
9/13/12 We are beginning to turn cautiously pessimistic. …it looks like the stock market is on the edge of a seasonal cliff. -2.2% -2.8% 6.3% 18.0% +
8/22/12 Somehow very serious bearish sentiment has to ease – perhaps by a few more weeks of rising stock prices. 3.3% -1.6% 5.3% 15.7% +
3/14/12 …stock markets…have reached momentum and sentiment readings associated with important tops. -1.7% -5.0% 2.8% 11.8% +
2/8/12 Stock markets are poised to roll over. 1.5% 1.0% 3.8% 12.6%
12/8/11 This week’s jump has been outstanding and we think the accomplishment will be to keep going for some six weeks. 4.7% 11.1% 7.4% 15.0% +
6/30/11 This could run for some weeks and generate some overbought conditions. -2.6% -12.8% -5.4% 4.0%
6/15/11 …our target for the S&P has been the March low of 1249. While equities have been vulnerable to that level, if the S&P is steady through Friday, a weekly Downside Capitulation would register. In which case a relief rally would follow. It need not get to 1249 to rebound. 4.0% -7.3% -2.3% 6.3% +
3/23/11 The Bubble Seems To Have Reached Its Gossamer Limit …a strong surge into around March has been essential to set the reversal to the down side. 3.1% -0.2% -7.4% 9.2%
3/1/11 The Forecaster has been anticipating a cyclical peak and technical measures have been confirming this melancholy prospect. The key question is will the economy turn down with the stock market or will the decline in the S&P lead the downturn in the business cycle? 1.7% 1.9% -9.9% 4.8% 0
1/13/11 Risk on the downside is becoming more obvious and our Forecaster suggests there is only a little time left for the favourable stock market… 3.8% 2.4% 2.0% 1.9%
11/16/10 Taking out S&P 1204…will turn the market down. It could be an intermediate decline. 5.5% 12.7% 12.8% 3.2%
9/22/10 The stock market seems to be enjoying the September sunshine and this week could conclude the move. 4.1% 9.9% 14.1% 0.2%
9/9/10 Market forces seem close to having policymakers “for lunch” – again. 5.5% 10.8% 19.5% 5.3%
8/17/10 It is difficult to call for a noticeable decline from conditions that prevailed over the past two weeks, but a number of different tools formed our conclusions. This slide could continue for a couple of weeks and resume in early September. 2.9% 9.8% 21.9% 4.4%
7/13/10 …once this week’s bounce is over the decline should resume. The next target is last summer’s correction low at the 890 level. Major support is at the March 2009 low of 666 and there are some reasons why such a low is possible. -0.5% 6.4% 16.1% 19.5%
6/22/10 …close enough to say that the best is in for the rebound. In the meantime, the advance has been just building the first step down from a clearly defined top. …This will not be a friendly environment for investors. -0.1% 4.3% 13.6% 17.2%
6/9/10 …the “lines” are setting up for a rebound out to around 1130 on the S&P. Following that bright possibility, the downtrend would resume. 2.1% 3.4% 15.9% 20.4% +
5/20/10 … the senior indexes…set a lower low for the week and that was the signal for us to push the “sell” button. The damage to equities has been severe and the rebound may not last too long. 3.9% 2.1% 10.0% 22.9%
4/27/10 Investors can increase the rate of selling and traders can play the short side. -9.8% -5.8% -0.1% 14.9% +
4/20/10 It is also time to begin lightening up in the general stock markets. -7.6% -11.3% -2.6% 10.2% +
3/10/10 The combination of exceptionally low mutual-fund cash and the pattern in the GSR confirms that an important top is completing. 4.3% -7.3% -4.7% 13.9% +
2/4/10 Investors could take money off the table and traders can play the short side. 7.1% 9.7% 6.0% 24.1%
12/23/09 By reliable measure, stocks are as precarious as in 2007. -2.5% 4.0% -4.2% 12.3%
10/28/09 From the distress in March a magnificent rally had to follow. From current excesses an equivalent decline must follow. …Investors and traders can sell aggressively. 4.7% 4.0% 15.7% 13.6%
6/29/09 …sell the rallies. As conditions get worse, …relief rallies may only be “day-and-a-half wonders”. 5.2% 12.6% 21.5% 10.8%
6/23/09 …the cyclical bear market will end with “Rational Dismay”, and we are not there yet. 9.1% 18.9% 23.2% 20.3% +
6/9/09 …this week’s reversal could roll over into an intermediate decline, which is current analysis. -6.3% 7.8% 17.1% 15.8% +
5/26/09 We are reaching extremes for the move, and now we look for change. -1.0% 12.7% 20.3% 21.2%
4/21/09 …it is time for traders to begin selling, but not yet to short. Investors should be selling. 6.3% 11.9% 28.0% 43.2%
4/1/09 …while a good part of the expected move is in, targets for important highs in April-May seem realizable. 8.2% 13.3% 30.8% 46.6%
3/24/09 We now watch for the exit for the general stock market. 5.7% 10.8% 32.1% 44.7%
3/17/09 …it looks like this week’s recovery will be more than a two-day wonder. 11.2% 18.7% 34.9% 49.1% +
3/9/09 Pressure seems close to finishing, which will set up the rebound. 20.5% 39.0% 48.3% 70.0% +
12/17/08 With some inevitable swings stock markets should show good returns out to April. -11.0% -13.3% 1.5% 23.2%
12/8/08 We have been describing the expected move out to spring as a tradable rally for investors and traders. It could carry most, if not all, sectors with it. 0.0% -20.9% 3.6% 21.2%
11/24/08 …we have been expecting a tradable rally out to around March. This would likely carry most equity sectors with it. 1.9% -10.2% 4.8% 28.1%
11/17/08 Traders should continue to cover shorts and get prepared for a rally from the latter part of this month to around March. 6.3% -7.3% 6.7% 28.7%
11/11/08 …we have hopes that stock markets can muster a tradable rally into March-April. This would be within the context of a cyclical bear market. -2.8% -7.3% -1.7% 21.6%
11/4/08 …it seems that the move could be more than another “day-and-a-half” wonder. -16.0% -17.3% -8.6% 6.3%
10/14/08 …the bottom could be accomplished in the latter part of October. -14.6% -12.6% -14.6% 9.0%
9/22/08 …a hard stock market decline can run for 55 trading days and, using the Nasdaq, this counts out to late October. There can be some interesting swings on the way. Once this selling phase is exhausted the market could rebound into the first quarter. It could be a tradable rally within a cyclical bear market. -25.7% -26.7% -31.8% -12.9% 0
9/2/08 The upshot is more down… The next decline could take down most, if not all, equity sectors. -9.1% -29.8% -45.5% -21.5% +
7/30/08 The outlook for the rest of the summer is choppy to down and it is worth keeping in mind that in unwinding the excesses of a great speculation the fall often is the season of forced liquidation. 1.3% -33.9% -31.9% -21.9% +
6/9/08 This is a fully-fledged warning on the next slide in the stock markets… We like to play the seasonal rally and the best is likely in and we are essentially out of the play. Traders could begin to play the short side. -8.6% -8.8% -37.9% -30.6% +
6/4/08 This pattern is, or should be, compelling persuasion to be positioned for a cyclical bear market. -8.3% -7.2% -40.7% -31.8% +
5/20/08 …much of what we thought possible has been accomplished and we watch for the exit. -5.0% -9.5% -38.2% -37.2% +
5/13/08 Investors and traders should be prepared for another slide in most prices of stocks, corporate bonds and commodities. -4.5% -7.0% -33.6% -37.1% +
12/15/07 …traders should be selling… Sometime in the first quarter these key lows will be visited again… -7.8% -8.0% -6.6% -38.8% +
11/10/06 The market could now slip to the lower standard deviation band at around 1350, which would be followed by a 10% rally into the New Year. 2.2% 4.6% 8.7% 5.1% 0
9/12/06 …the action in stocks, commodities, and residential real estate is indicative of a cyclical peak. 2.8% 7.4% 5.6% 12.5%
8/25/06 …sell the rallies. 3.2% 8.6% 8.0% 12.6%
5/16/06 Continue to lighten up. -2.8% -1.8% 6.9% 18.0% +
1/21/06 Defensive positioning in most sectors is appropriate. 2.3% 3.8% -1.9% 12.5%
10/18/05 …the intermediate low could be accomplished in November. 4.5% 8.5% 11.2% 16.2%
8/5/05 …dance close to the exits… 0.6% -1.0% 3.1% 3.2%
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