TOP GURU: LAST YEAR'S PRIZE BULL ISN'T EXACTLY BELLOWING
When BUSINESS WEEK's yearend issue showed up at his office in late December, 1995, Robert F. Dickey got a shock. A few weeks earlier, Dickey had filled out a market forecast survey, predicting that the Dow Jones industrial average would vault to 6300 by the end of 1996. ''I was really surprised to see the next high-est forecast at 6000, and that I was 5% higher,'' he says. ''Then the market beat even my forecast, before falling back. It's incredible.''
Dickey, technical analyst at Minneapolis-based Dain Bosworth Inc., doesn't boast about forecasting models or pontificate about technical indicators. ''To pick a yearend forecast is luck, I admit it,'' he says. ''I thought my estimate was a long shot.'' But since the stock market had been averaging an annual 17% gain since 1982, he didn't think his forecast was totally out of line. ''The fact that economic growth was so steady and sustained made it pretty easy to expect the market to do the same,'' he says.
Now, however, Dickey says the market is close to a correction. He doesn't envision a prolonged bear market, but he does forecast 20% to 30% drops for the Dow, Standard & Poor's 500-stock index, and Nasdaq Composite index. ''There are more problems on the horizon now than there were a year ago,'' he says. ''A rise in energy prices over the next few months will translate into higher inflation overall, which will negatively affect interest rates, and the stock and bond market will follow like dominoes.''
Dickey's stock pick for 1996 was one of the biggest winners in last year's survey. His choice, U.S. Surgical Corp. was up 75.3% as of Dec. 16. His favorite stock now: Barrick Gold Corp. Gold? That's a bear growl if there ever was one.
By Suzanne Woolley in New York
Updated June 13, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.