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

Bob Doll

Photo: 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.

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

PREDICTION: 'The U.S. economy continues to muddle through yet again.'

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

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

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

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

PREDICTION: 'US stocks outperform non-U.S. stocks.'

Right

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

Tally: 5.5/7.0

Source: Advisor Perspectives

PREDICTION: 'Dividends and buybacks hit a record high.'

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

PREDICTION: 'Healthcare and energy outperform utilities and financials.'

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

PREDICTION: 'Republicans capture the Senate, retain the House, and defeat President Obama.'

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

Drumroll...



60% ain't terrible.

Firms are already making their 2013 predictions

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