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Howard Gold
Nov. 20, 2010, 12:01 a.m. EST
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Groupon should just say no to Google
By Howard Gold
NEW YORK (MarketWatch) "” The year started on a high note, with a rallying stock market and clear signs of economic recovery. After the near-death experience of 2008-2009, the worst appeared to be over.
That was the zeitgeist when I made my own predictions for 2010, which I'm reviewing a bit early this year.
As I re-read those columns, two things became clear: I had my best year ever in anticipating the swings of the market, and I was generally too optimistic about the economy.
Since I'm a put-your-best-foot-forward kind of guy, I'll begin with what I got right.
The Fed is fending off attacks both domestic and international, in what amounts to the biggest wave of criticism of the central bank in recent times. How might that affect the global economy? Kathleen Madigan, Michael Derby and Paul Vigna report.
In "Six Big Predictions for 2010" (Jan. 7), I focused primarily on the economy, but also touched on the markets. Read "Six Big Predictions for 2010."
"There will be a financial mini-crisis or two that re-ignite investors' fears," I predicted.
"The sell-offs they trigger would be more like corrections than a second bear market, so for bullish investors they could be buying opportunities." Right on target.
The most likely victims of such a crisis, I wrote then and in a Jan. 21 follow-up, were "the sovereign debt of the PIGS nations (Portugal, Ireland, Greece, and Spain) "” perhaps Italy, too."
Within weeks, the crisis over Greece's debt exploded, raising fears of another contagion. But I managed to keep my head while others were losing theirs.
"The Greek crisis was just a pretext for a long-needed sell-off in markets that had gone 10 months without a significant correction," I wrote on Feb. 11. "I have no idea how deep this correction will get," I concluded. "But based on all the historical evidence I've seen, a correction it is, not the end of the rally."
The Standard & Poor's 500 index closed at 1,078.47 that day, and the following week, a new rally began, taking it up to 1,217.28 on April 23, an 11.4% move.
Just a week before the S&P hit its April highs, I had noted the strength of the rally, but warned: "After such a huge move, there could be a nice correction at hand "” maybe the "?official' 10% we just missed in January and early February."
The S&P actually fell 16% to its closing low of 1022.58 on July 2, and couldn't make much headway for the rest of the summer.
The gloom was palpable then, according to several surveys, including our own mid-August MoneyShow.com Investor Sentiment indicator, which "showed the highest bearish ratings we've ever seen "” far greater than back in February 2009, just before the market bottomed."
But enough was enough, I wrote on Aug. 5: "Looking beyond the next few weeks and into 2011, "¦ the real economic improvement I see, the terrific corporate earnings that ultimately drive stock prices, and the weight of market history tilt the balance to a cautious optimism."
An IPO by Groupon could show it is a sustainable business on its own and fuel more competition with Google
3:51 p.m. Nov. 19, 2010
- ProfessorBear | 2:00 a.m. Today2:00 a.m. Nov. 20, 2010
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