These days, "news" is old by the time you read it. People don't want to know what happened anymore -- they want to know what's going to happen next. In our quest to feed this obsession, and to seem smarter than everyone else, columnists and pundits make a lot of predictions, especially at this time of year. You'll likely see a lot of "what happened in 2004, and what's going to happen in 2005" columns very soon. In fact, you're reading one now.
I'm getting my year-end wrap-up column in early, not just as a service to you, but for two other reasons: First, as the head of a national polling company, it's our business to predict events and trends. Because we conduct so many national InsiderAdvantage surveys on an array of topics, we are often able to provide insight ahead of time. It's basically "predictive polling." Second, in the business of predictions, you're only as good as you are accurate, and I want to see how I did with the prognostications I made last year. I'll skip giving myself a letter-grade, but welcome your comments and criticism.
At the end of 2003, I predicted an economic upturn that would be modest, that stock market growth would occur in the second half of the year and that the Federal Reserve would "lay low during an election year."
Results: The DJIA is up around 5 percent, the S&P around 12 percent -- with most of the movement into positive territory occurring since November. Since August of last year, we have seen 15 consecutive months of positive jobs reports -- but the biggest gain (337,000) came only in October. The Fed has raised interest rates, though, four times this year, and will likely do so again in December. While that's not exactly "laying low," the increases have been in small, quarter-point increments, and the Fed has repeatedly signaled a "neutral" strategy. It's also had to come off a 46-year low for interest rates, and do so without slowing the economy down. Overall, I'm satisfied with the economic predictions.
Politically, I guessed that Howard Dean would capture the Democratic Party nomination for president and that Dick Gephardt would be seen as moderate enough to balance the ticket, but that in the end it wouldn't matter, as President Bush would not only carry Florida but also ultimately win re-election. While I (and many other pundit-predictors) were undone by Howard Dean's YEEEAAARGH! meltdown, the Democrats did select a more moderate, though just as unsuccessful, ticket. And Florida was officially "too close to call" by the best pollsters in the nation -- until it was over.
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