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Getting Away With Murder?

The Huffington Post The Huffington Post 19/02/2016 Leland Faust

Far too often the Wall Street press has amnesia when reporting its own prior advice. The cover story of the February 8, 2016 issue of Barron's demonstrates this all too well. A picture of a red oil drum emblazoned with "Here Comes $20 Oil" appears with the prediction: "Why oil should move back to around $55 late this year." When readers turns to the table of contents they are greeted with a description of the cover story that reads: "A supply glut is setting the stage for oil prices to dip to $20 a barrel, before they rebound in the second half of the year. Our spot - on predictions since 2014."
Spot on? Let's take a look. Barron's provides a chart, with commentary, which attempts to show it's "spot-on predictions." On December 6, 2014 (oil then at for $66 per barrel), Barron's made "the case for $35 oil." That was followed on January 10, 2015 (oil then at $49 per barrel) with the observation that "oil could fall to $20." Next comes the cover of the February 16, 2015 edition (oil then at $51 per barrel) with the headline: "Buy Oil Now." Then the cover trumpets their panelists as seeing "oil settling at around $60 a barrel." About a month later in the March 23, 2015 issue (oil then at $46 per barrel) readers are warned that "Investors are still too bullish on oil."
So which is it guys? Are we headed up to $60 or down to $20? In December (with oil at $66 per barrel) they make the case for oil at $35. When the trend is going their way about a month later and oil has fallen to $49, they indicate it could go to $20. But then in the February 9, 2015 issue when oil had increased to $52, readers were warned: "Beware the false bounce in oil." Seems to me a "false bounce" means it's heading lower. But then a week later when oil has moved down $1 to $51 per barrel, we were told that it should settle in at around $60. If we've had a false bounce at $52, why would we be predicting it's going to $60? My only guess is they think that we are all stupid and pay no attention to their prior projections and that we don't mind if they change their analysis from one week to the next. How can they get away with this?

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Leland Faust is a financial expert, author, speaker and triathlete. He is the founder of CSI Capital Management and served as Chief Investment Officer for 33 years, managing over 1.5 billion. He is one of only two investment advisors to be included in the list of 100 most powerful people in sports by the Sporting News. He was selected by Barron's as one of the top independent investment advisors in the country. His first book is scheduled to be released in the fall of 2016 and he is available for speaking opportunities. Follow Leland on twitter @LelandFaust.

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