Their prices fell by an unprecedented1 25% last year, marking a highly unusual third consecutive" year of decline. Thai means that shares almost certainly have to go up this year: Right’/
1 in sorry, I haven t a chic1′. "And 1 m not the only one. Last year, a panel of leading City’ experts polled by the Financial Tiling at the end of 2001 predicted that the FTSK-HX) share index would close al the end of 2002 somewhere between 5,350 and 6,200 points. With such a wide margin of error there was obviously a good chance that someone1 would get it right, if only1 by accident. That is not what happened. I hey all got it wrong, and not only wrong but wildly wrong. The index closed the year at 3,910. 4 points.
All the experts thought shares would rise by at least 2%, whereas in fact they fell by 25%. That is quite a serious miscalculation by people’ who are paid hundreds of thousands of pounds a year to get it right. It might well have" caused thousands of savers to keep their pensions or other savings in equities’ , rather than switch to gills" (or put the money under their pillows)–both of which would have had a far higher return than investing in equities.
In ordinary circumstances, people making errors like this might be in fear of their jobs but don’t worry, most of the same people and companies are still in business" and are making more authoritative predictions for this year.
Now for the bad news. Last year s mistake was not a one-off1" miscalculation which investors can ignore. For the past six years.
The city experts have got it seriously wrong every lime.
Whenever anyone asks me about shares. I freely admit that 1 am absolutely useless about predicting what will happen in the coming month-—or years – and that on no account11 should they take my advice. And, unlike the City experts. 1 don’t charge them a penny.
But that doesn’t mean 1 have been wrong. I have been convinced for years that shares were seriously overvalued even before the last bull market’"’ got underway1".