Tadas Viskanta of Abnormal Returns was one of my inspirations for writing this blog.
What I liked about his blog was that it was “forecast free”. He didn’t make any predictions or tout any stock picks.
I wanted to create a blog on the same lines…where the reader thinks for himself/herself.
Great investors like Warren Buffett have time and again said that they can’t predict the market or forecast what individual stock prices will be.
But in the Indian scenario,we have various brokerages and pundits making predictions/forecasts like crazy.The old adage “If you want to forecast, forecast often” seems to hold true for them.Their target prices follow the stock prices resulting in considerable losses to their investors.
I thought it would be interesting (amusing ??) to see what actually happened to these predictions made by Dalal Street’s finest.
On 5 Nov, 2011, Motilal Oswal put out a buy on Bharti Airtel with a target price of Rs.515.This implied an upside of 29% over the then prevailing price of Rs.398
A year later, Bharti Airtel’s price is languishing around Rs 304, a decline of 23%.
Forecasting folly, anyone?