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Weighing The Week Ahead: A Review Of The Silver Bullet Winners For 2015

By Jeff Miller :

For years, it's been a staple of our Weighing the Week Ahead series to recognize analysts who go above and beyond in their coverage of the issues. We congratulate these writers with the Silver Bullet Award - named in honor of the Lone Ranger, who lived by a strict code: "…that all things change but truth, and that truth alone, lives on forever."

In 2015, we gave out the Silver Bullet Award 21 times - the most ever in a single year. Despite the constant fearmongering from some bloggers and media personalities, more and more people are providing individual investors with the tools they need to make informed decisions. Our winners are summarized below. Readers may also want to check into our 2013 and 2014 compilations, as many of the same issues persist to this day.

Have any thoughts or predictions on what will dominate news cycles in 2016? Know of a great analyst flying below our radar? Feel free to post in the comments with any suggestions or nominations.

January 4, 2015

Our first Silver Bullet of the year went to RL at Slope of Hope for his examination of charting "techniques" in the post-2008 recovery.

(click to enlarge)

RL notes:

What can we conclude from all the above? Well, first of all that making long-term trend predictions is not recommended, no-one knows what is awaiting for us in the future. Bull or Bear Market, inflation or deflation, you name it. What we can do, is to predict market trend extensions with statistical analysis, comparing past trends and current trends and that is in fact what we do with our RL models. We do not know if the market can go to 3000 in the next few years, it's possible if all of a sudden a lot of investors, after staying on the sidelines since 2009, decide to join this 5 years long rally (how about that for a

March 1, 2015

Nicholas Colas and Jessica Rabe of Convergex took on Jeff Gundlach's assertion that equities have never risen for seven years in a row since 1871. With due respect to Mr. Gundlach, the authors primarily took issue with the dataset (courtesy of Robert Shiller) he had used to draw his conclusion. Colas and Rabe write :

April 5, 2015

Barry Ritholtz dug up an old Onion article , as an analogue for what passes as analysis in the financial blogosphere. Readers may be reminded of Sidd Finch.

April 11, 2015

Bill McBride (AKA Calculated Risk) ended 2014 by asking himself ten questions about the state of the economy. His quarterly reviews helped to measure economic progress over time, in line with his expectations. This innovative approach to interpreting data earned Bill our Silver Bullet Award .

April 19, 2015

Ed Dolan's thorough deconstruction of ShadowStats is one of our favorite blog posts from 2015. From the way he picks his target, to his measurement of the data - his post reads like a step-by-step guide to winning a Silver Bullet . We found this excerpt particularly interesting:

April 26, 2015

The "what if?" question plagues individual investors and fantasy football fans alike. While the sports fans can afford to indulge in flights of fancy, investors probably shouldn't. David Fabian won the Silver Bullet for writing to this effect very effectively:

Lastly, I think it's important for investors to forget the

June 08, 2015

We frequently warn individual investors to keep their politics and their investments separate. Morgan Housel earned himself a Silver Bullet by illustrating this with a clear, relatable example . The market has seen significant gains since 2008. If you've been sitting on the sidelines, you've missed some big opportunities.

Take these two statements:

June 13, 2015

Regular readers know that we like to carefully scrutinize mainstream financial media. Needless to say, we got a kick out of Cullen Roche's colorful guidelines for financial journalists. They're all well worth reading, but our favorites are quoted below.

I. The Stop Scaring People Rule. Scaremongering is not to be tolerated except during the middle of a financial crisis or nuclear war. Writing scary articles for the sake of conjuring emotionally driven page views is not a legitimate business model and is generally counterproductive.III. The Crash Call Rule. That pundit who comes on TV predicting financial Armageddon every week is not a

June 20, 2015

Declining profit margins are a prime target for perma bears in the blogosphere. You'd think after an "expert" calls nine of the last three recessions, this one would go away - but we've been fighting it for years . Pierre Lapointe received the Silver Bullet for taking on the crowd.

July 04, 2015

Beyond errors in the investment world, we like to caution our readers to think carefully about all kinds of data. Math Professor Jordan Ellenberg, of the University of Wisconsin-Madison, provided a fascinating article about the misuses of numbers. We gave him the Silver Bullet based on his conclusion:

All these mistakes have one thing in common: They don't involve any actual falsehoods. Still, despite their literal truth, they manage to mislead. It is as if you said,

July 18, 2015

Zero Hedge is one of the least credible yet oft-cited websites sucking up oxygen in the financial blogosphere. Their supporters are apparently pervasive, which is why we had to give Fabius Maximus a Silver Bullet for his thorough deconstruction. The full article is of course excellent: his commentary ranges from exposing half-truths, conspiracy-mongering, selective use of data, and outright deception.

ZH is an ugly version of Wal-Mart or Amazon. It would be sad but insignificant if ZH was exceptional. But ZH is a model of successful web publishing, probably taking mindshare from mainstream providers of economic and market insights. I see websites using its methods proliferating in other fields. For example, geopolitics has become dominated by sites that provide a continuous stream of threat inflation as ludicrous as the worst of ZH.

July 26, 2015

On a lighter note, we greatly appreciated a video done by Jimmy Atkinson at Dividend Reference. His guide to useless (but entertaining) stock market indicators comes with an important lesson attached . Below is one example particularly relevant to hockey fans in the Chicago area.

August 02, 2015

Michael Batnick won a Silver Bullet this year when he abated growing fears about market tops. His careful analysis (backed up by solid data) is a huge asset for individual investors looking for an edge.

Conventional wisdom goes that prior to market tops, the major averages become more reliant on just a handful of stocks to lead the rally. When stocks are making new highs, it's important to look at breadth indicators because indices can pull a nasty trick of masking what is actually happening to the majority of stocks. For instance, the S&P 500 is up 2.3% YTD, however, the average S&P 500 stock is down 0.7%.Observers with a mission fail to note that divergences often resolve to the upside. Here is an interesting table, showing both frequency and the range of gains.

August 22, 2015

We at "A Dash" applaud anyone willing to challenge the so-called conventional wisdom. We gave Barry Ritholtz a Silver Bullet this year for taking on the Death Cross .

…yesterday's decline triggered the dreaded Death Cross, as the index's 50-day moving average crossed below the 200-day moving average. The other major indexes haven't yet succumbed to the Death Cross horror, though the S&P 500 is heading in that direction.In a research note late yesterday, Bespoke Investment Group observed that this was the first time this has happened since Dec. 30th, 2011, or in 903 trading days. They also note the modest statistical significance of the Death Cross. Looking at the past 100 years, they wrote that

August 30, 2015

Our final award of the year went to Michael Batnick and Todd Sullivan (citing "Davidson) for two separate articles on the same theme. Both illustrate the danger in the way the Shiller CAPE ratio is presented to investors. Batnick notes:

When Shiller says 15-16 is where CAPE has typically been, what he really means is this is what the average has been. However, what he fails to mention is that over the past 25 years, the CAPE ratio has been above its historical average 95% of the time. Stocks have been below their historical average just 16 out of the last 309 months. Since that time, the total return on the S&P 500 is over 925%.

Sullivan shows that the profit estimates in the data are flawed because of accounting changes. He shows that large and completely implausible changes in "earnings" were actually the result of the FAS 157 rules.

Conclusion

As always, you can feel free to contact us with recommendations for future Silver Bullet prize winners at any time. Whenever someone takes interest in defending a thankless but essential cause, we hope you'll find them here. Have a Happy New Year and a profitable 2016.

See also Signet's A Real Market Gem on seekingalpha.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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