Welcome to the Soothsayer's Ball

We've entered the last week of the calendar year, which (to me) can only mean one thing:

We're about to be inundated by "Top 10 _____ of 2008" lists.

I've always found these lists to be quite amusing, if not pointless. On the financial markets side of things, does it really matter which story was #1, and which was #7? I wonder, if someone lost $100MM in Bernie Madoff's ponzi scheme, and then reads that the Madoff scandal was the #1 financial story of 2008, does that provide any comfort? Conversely, if the poor fellow sees that the Madoff scandal is the #6 story, behind the overall market drop, the bankruptcy of Lehman Brothers, the fire sale of Bear Stearns, the AIG bailout and the collapse of the housing market, does that add insult to injury?

While these lists seem silly to me, thay do serve one important purpose. A person could space out for 51 weeks, and then catch up on everything over the last few days of the year. That's pretty neat.

The really pointless exercise lies not in the sundry annual "wrap up" stories, but in the "prediction" pieces that also typically run at this time of year. In stock market terms, different media outlets will assemble a formidable collection of pundits who will polish their crystal balls and tell us where the market will be at the end of the next year. Invariably, you will get a very wide range of predictions. One guy will say that he expects the stock market to rise by 35% in the next year, while some other person will call for a 40% drop. One thing you can be certain of is that anyone who lobs a prediction at us will be sure to back it up with an impressive-sounding argument.

Over the years, I've struggled with the question of which prediction to follow. Several years ago, when I was working as a stock analyst, a colleague of mine gave me this sage advice: "When in doubt, go with the guy who is wearing a bow tie." This made a great deal of sense to me at the time, so I made a mental note to do so going forward. About a year later, my illusions were shattered when our firm's bow tie-wearing chief economist showed up 30 minutes late to a meeting, sheepishly saying, "I thought this meeting was called for Thursday, not Tuesday." I realized that this guy couldn't figure out his schedule for the week ahead, let alone predict the stock market's level 12 months out.

Flamboyant neckwear aside, I think that it's rather obvious by now that even the "pros" have a difficult time accurately predicting the future. So, I figured that we should just have at it ourselves.


I am therefore pleased to introduce The First Annual IcebergCarwash Stock Market Prediction Contest.


To join, use the "comments" section to register your prediction of where the S&P 500 Index will be at the end of 2009. For reference, consider that the Index is currently at 865.42. It ended 2007 at 1468.36 (ouch).

We will keep track of everyone's predictions, and at the end of 2009, we will award a prize to the person whose prediction came closest to the actual closing level of the S&P 500 Index at the end of 2009. (Please read the disclaimer below). You've got until the market opens on January 2, 2009 to join. Good luck, everyone.





Disclaimer
This contest does not represent an offer to sell or a solicitation of an offer to buy any security. It is open to anyone in the world, provided that the jurisdiction in which the entrant primarily resides does not expressly or implicitly prohibit joining contests of this nature. There is no fee to join this contest. IcebergCarwash disavows any connection to any individuals, including, but not limited to, the Governor of the State of Illinois, who might attempt to solicit fees from those who join this contest. The contest is open to relatives, friends or enemies of the operators of IcebergCarwash. The contest is not open to anyone named Charles who chooses to be referred to by the nickname "Chaz." In such instance, either "Charlie" or "Chuck" is acceptable. IcebergCarwash reserves the right to award a truly stinky prize to the winner of this contest. Reference to the term "stinky" in relation to the proposed prize includes any prize which could be deemed to be inadequate for the winner of such a contest, generally unattractive, or possessing a particularly foul odor, whether such prize is the actual source of said foul odor, or if the foul odor was derived from something which came in contact with the prize, thereby imparting - temporarily or permanently - the odor upon the prize. Taxes will be the sole responsibility of the contest winner. IcebergCarwash makes no representations whatsoever regarding the tax liability arising from winning the contest's prize. Each participant is advised to consult with his/her tax adviser to determine any potential tax liability, prior to accepting any prize awarded by IcebergCarwash in connection with this, or any, contest or promotional event.