Of the 67 investment strategists surveyed for BusinessWeek's 2005 Fearless Forecast of the equity markets, William Greiner took the gold. Predictions from the chief investment officer at UMB Asset Management in Kansas City, Mo., were just 0.8% above the Dow Jones industrial average, 0.6% off the Standard & Poor's 500-stock index, and less than 0.1% higher than the NASDAQ Composite. The race was close: Nearly half the lot came within 5% overall.
How did Greiner win? He expected that the negatives of rising interest rates and slowing earnings growth would be offset by robust capital spending and strong export growth. "All these factors combined led us to believe the market was going to be up this year, but not by a lot," says the 51-year-old Kansas native and an economics graduate of Washburn University in Topeka.
Although his name is the one that goes on the forecast, Greiner credits his colleagues who assist him in crunching the data. It also helps that he has 27 years of investment experience -- the past six at UMB. Before joining UMB, Greiner worked at Northern Trust in Chicago. He also attributes some of his smarts to his hobby -- riding motorcycles. "When I'm on the bike, I'll ride aggressively and have to focus," he says. "It cleanses the system."
For 2006, Greiner anticipates a Dow finish of 11,700, the S&P at 1,340, and the NASDAQ at 2,350. Those are advances of 8.5%, 6.4%, and 4.1%, respectively. "While our numbers look tame, there are going to be trading opportunities" during the year, he says. The trend is up, but rising interest rates, slowing profit growth, and angst about the housing market are sure to help generate volatility in the stock market.
Will the Fearless Forecast produce an unprecedented two-time champ next December? Runner-up C. Kim Goodwin -- last year's winner -- nearly was one this time around. She was hot on Greiner's heels, but missed the NASDAQ by 1.9%. This year when BlackRock Financial Management (BLK ) acquired Boston's State Street Research & Management Co., Goodwin decided to go independent. A corporate board director for Akamai, (AKAM ) she's forecasting a 2006 Dow finish of 11,850, 1,456 for the S&P, and 2,563 for the NASDAQ. One thing's for sure: With Goodwin more bullish than Greiner, there's no way the two will repeat their neck-and-neck finish in 2006.
By Bremen Leak