Investment gurus

You can't just bang your fists on the table. You have to bang them harder than everyone else. Such is the first law of investment punditry during a boom or bust. For example, few made more noise about the wonders of the technology boom in the late nineties than Abby Joseph Cohen of Goldman Sachs. As stocks soared higher, investors rushed to her rallying cry.

Every period of market madness, whether up or down, has its figureheads. Jim Rogers and Marc Faber led the charge on commodities earlier this decade, while David Lereah, chief economist of the National Association of Realtors, was constantly on screens to expound the virtues of home ownership. During this crisis, economists and pundits have clambered over themselves to become the kings and queens of gloom. New York University's Nouriel Roubini, for one, is already near-synonymous with the current meltdown.

Of course all gurus only became so because they were right for a while. If things were different, other names would have come to the fore. And a turn in the sun does not last for ever. The question then is: what does an “expert” do next? Unfortunately, the second law of punditry, which covers this problem, is often ignored. It says that upon suddenly becoming spectacularly wrong, you should not bet the investment house again.

Ms Cohen is no longer the lead index forecaster for Goldman. Responsibility for guessing the S&P's trajectory was passed a year ago to a colleague. Others, however, keep the predictions coming. Fortunately, one does not have to remain a committed bull or bear. Economist Harry Dent, having famously predicted in 2000 and again four years later that the Dow would reach 40,000, has just written a book called The Great Depression Ahead. Battered investors perhaps need look no further for a buy signal than that.