The Worst Predictions of 2006
Karl Rove, Howard Stern, and eBay's (EBAY) Meg Whitman weren't just a little off about 2006. They were flat-out wrong. So were some housing analysts and government meteorologists. Now that the season for goodwill has passed, let's gloat over some of the forecasts that fizzled.
PREDICTION: "We are on a tear to be the undisputed winner in China." — eBay CEO Meg Whitman, Feb. 10, 2005
THE REALITY: In December, 2006, eBay said it would close its eBay operation in China and become instead the junior partner in a new Chinese e-commerce venture.
PREDICTION: "Satellite radio will succeed.…Trust me. With me, it's a lock." — Howard Stern, Dec. 22, 2005
THE REALITY: The stock of Sirius Satellite Radio (SIRI), Stern's new employer, is down more than 40% since he began broadcasting. In the first nine months of 2006, Sirius lost nearly $900 million.
PREDICTION: Patricia Dunn is "The clean-up queen of corporate governance" — Headline in The Age, Melbourne, Australia, Apr. 4, 2006
THE REALITY: On Oct. 5, Dunn, Hewlett-Packard's (HPQ) former board chairman, was booked in California's Santa Clara County on felony charges arising from HP's alleged spying tactics in its investigation of boardroom leaks.
PREDICTION: "A very active hurricane season is looming." — National Oceanic & Atmospheric Administration, May 22, 2006
THE REALITY: Of the up to six "major" hurricanes in the North Atlantic that were predicted by NOAA, only two materialized. Number that reached U.S. shores: zero.
PREDICTION: "It's very clear to us that oil prices have peaked for this cycle." — Bill Miller of Legg Mason (LM), Dec. 8, 2005
THE REALITY: Miller, the firm's leading investor, said oil prices would reach $40 to $55 a barrel during the year. Instead, they hit $78 in 2006.
PREDICTION: The national median home price will rise about 6.1% in 2006. Over a full year, it "has never declined since good record-keeping began in 1968." — National Association of Realtors, Dec. 12, 2005
THE REALITY: Through October, the median price of residential properties was down 3.5% from a year earlier.
PREDICTION: "It's the definitive last chapter in the trial of the century." — Fox Broadcasting (FOX) Executive Vice-President Mike Darnell, on O.J. Simpson's book, If I Did It, Nov. 13, 2006
THE REALITY: It wasn't the last chapter; it was the last straw. After a public uproar, News Corp. (NWS) Chief Executive Rupert Murdoch killed the book and fired its editor, Judith Regan.
PREDICTION: "Earnings disappointments will likely cause a more significant correction in equities at some point in 2006 than we have experienced in some time." — Robert Doll, chief investment officer of Merrill Lynch (MER) Investment Managers, Jan. 10, 2006
THE REALITY: Corporate earnings reached their biggest share of gross domestic product since 1950, the market never "corrected," and through Dec. 20, 2006, the S&P 500 stock index was up 14%.
PREDICTION: "There's just not that many videos I want to watch." — Steve Chen, co-founder of YouTube, worrying in March, 2005, about his startup's potential popularity
THE REALITY: As Chen was expressing this anxiety, YouTube had roughly 50 videos available. Today more than 100 million are viewed daily on YouTube, which was acquired by Google (GOOG) on Nov. 14 for $1.65 billion.
PREDICTION: "I'm looking at all of these [polls]…and adding them up. I add up to a Republican Senate and a Republican House. You may end up with a different math, but you are entitled to your math, and I'm entitled to THE math." — Presidential adviser Karl Rove, Oct. 24, 2006
THE REALITY: …was rather different.
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