Market Guru Bob Doll Made 10 Predictions For 2012 — Here’s How They’re Doing

Bob Doll

[credit provider=”Bloomberg TV screenshot”]

Bob Doll, the now former chief equity strategist at BlackRock and the current chief equity strategist for Nuveen, offered 10 predictions for 2012 a year ago.”In summary, 2012 is likely to feature a slow-growth world that includes a recession in Europe,” he wrote. “Should the muddle-through environment come to pass, we believe earnings and some improvement in confidence would allow equity markets to move higher, with US stocks leading the way.

So, it seems he nailed the gist of 2012.  But what about the details?

We looked back at Doll’s 10 prediction and gave him a score.

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[slide
permalink=”prediction-the-european-debt-crisis-begins-to-ease-even-as-europe-experiences-a-recession-1″
title=”PREDICTION: “The European debt crisis begins to ease, even as Europe experiences a recession.””
content=”Right

In Q3, the eurozone went into recession after booking its second straight quarter of contraction. Meanwhile, stock markets are up and yields are down in the the area. E.U. leaders have put together a package that keeps Greece in the E.U. and out of bankruptcy for now.

Tally: 1.0/1.0

Source: BlackRock, Business Insider

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[slide
permalink=”prediction-the-us-economy-continues-to-muddle-through-yet-again-2″
title=”PREDICTION: ‘The U.S. economy continues to muddle through yet again.'”
content=”Right

While not a quantitative term, ‘muddling through’ is one of the more accurate descriptions of U.S. economic activity that we’ve heard. Unemployment remains high and GDP growth remains below 3 per cent.

Tally: 2.0/2.0

Sources: BlackRock, Business Insider

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[slide
permalink=”prediction-despite-slowing-growth-china-and-india-contribute-more-than-half-of-the-worlds-economic-growth-3″
title=”PREDICTION: “Despite slowing growth, China and India contribute more than half of the world’s economic growth.””
content=”Half Right, Half Wrong

China and India’s growth rates both slowed in 2012. However, the two countries did not account for half the world’s growth. In 2012, the IMF estimates the world added about $2.3 trillion in wealth via a projected growth rate of 3.3%. Of that, China contributed approximately $600 billion and India contributed about $100 billion. The two countries contributed less than half of the world’s growth in 2012.

Tally: 2.5/3.0

Source: IMF

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[slide
permalink=”prediction-us-earnings-grow-modestly-but-fail-to-beat-estimates-4″
title=”PREDICTION: “US earnings grow modestly, but fail to beat estimates.””
content=”Half Right, Half Wrong

U.S. earnings have grown modestly in the first two quarters, and are on pace to have negative growth in Q3. However, around 70 per cent of S&P 500 companies are beating earnings estimates, according to data compiled by FactSet.

Tally: 3.0/4.0

Source: FactSet

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[slide
permalink=”prediction-treasury-rates-rise-quality-spreads-fall-5″
title=”PREDICTION: “Treasury rates rise, quality spreads fall””
content=”Half Right, Half Wrong

The quality spread as measured by BAML US High Yield Index has fallen (see chart). However, Treasury rates have continued to trend lower.

Tally: 3.5/5.0

Source: St Louis Fed

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[slide
permalink=”prediction-us-equities-experience-double-digit-percentage-return-as-multiples-rise-6″
title=”PREDICTION: “US equities experience double-digit percentage return as multiples rise.””
content=”Right

Stocks are up double-digits so far, despite low earnings growth. And it has everything to do with higher multiples.

Morgan Stanley’s Adam Parker, the most bearish strategist of 2012, has blamed his missed call on on multiple expansion. ‘Only the hubristic deign to project the market multiple — and those who “accidentally” get it right for a year, like us in 2011, and potentially develop exaggerated confidence — as evidently we did this year in projecting another year of multiple contraction,’ wrote Parker.

Tally: 4.5/6.0

Source: Bloomberg, Morgan Stanley

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[slide
permalink=”prediction-us-stocks-outperform-non-us-stocks-7″
title=”PREDICTION: ‘US stocks outperform non-U.S. stocks.'”
content=”Right

For the most part, U.S. stocks have beaten the major global indices.

Tally: 5.5/7.0

Source: Advisor Perspectives

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[slide
permalink=”prediction-dividends-and-buybacks-hit-a-record-high-8″
title=”PREDICTION: ‘Dividends and buybacks hit a record high.'”
content=”Half Right, Half Wrong

According to S&P’s Howard Silverblatt, buybacks are at pre-crisis highs, but not all-time highs. Dividend payouts, however, are at record levels.

Tally: 6.0/8.0

Sources: Business Insider, S&P
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[slide
permalink=”prediction-healthcare-and-energy-outperform-utilities-and-financials-9″
title=”PREDICTION: ‘Healthcare and energy outperform utilities and financials.'”
content=”Half Right

Healthcare (XLV) is up 16% and energy (XLE) is up 2%. Utilities (XLU) are down 2% and Financials (XLF) are up 21%.

Tally: 6.5/9.0


Source: Bloomberg
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[slide
permalink=”prediction-republicans-capture-the-senate-retain-the-house-and-defeat-president-obama-10″
title=”PREDICTION: ‘Republicans capture the Senate, retain the House, and defeat President Obama.'”
content=”Wrong.

Not only did the GOP fail to win back the White House or Senate, the party also lost seats in the House.

FINAL TALLY: 6.0/10.0
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title=”Drumroll…”
content=”

60% ain’t terrible.
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[slide
permalink=”firms-are-already-making-their-2013-predictions-12″
title=”Firms are already making their 2013 predictions”
content=”GOLDMAN: Here Are 10 Stories That Will Dominate Markets In 2013 >
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