I just read an
article discussing Yahoo's 22% share
plunge. The bit that got my attention had nothing to do with the plunge though. It was a comment from Piper Jaffray & Co and their prediction of Yahoo's share price by year end.
Piper's prediction is that Yahoo will hit $36 by the end of the year (down from their initial $42 prediction). This is the same Piper Jaffray that made the
prediction at the start of 2006, that Google would hit $600 by year end. Google is actually down about $25 (currently about $400). In fact, it's even the same analyst at Piper Jaffray making these predictions, Safa Rashtchy!
These "analysts" are entirely over rated. They are no more capable than the cabbage sitting in the frost free vegetable compartment of my fridge. To be fair, I should probably sample a portion of these analysts predictions and try to draw conclusions based on that. But then, I would have to include Mark Stahlman's prediction that Google would hit $2,000 by end of 2006, and all those other outrages oil, gold, etc predictions that have been circulating this year.
The way it works though is that if the analysts get it wrong, you won't hear about it. If they get it right, it will make the first page of their glossy promotional brochure in 2007.
There are too many factors out of our control. I say limit your down side, open your up side, and brace for the best. Don't fool yourself, and don't listen to charlatans.
Consider this, if Ug the cave man could have predicted the future, then why didn't he just invent the wheel and get on with it?
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