I am one who believes that financial markets are chaotic — highly sensitive to changes in sentiment and economic conditions, so much so that the future is essentially unpredictable.

But that doesn’t stop people (or me) from making guesses.  For many years now, my old friend Tom Campbell has been making educated guesses using mathematical models of his own design, and he now publishes his predictions on his web page.  I wish him good fortune, but I have also expressed to him my skepticism about the value of such forecasts.

So let’s have a little contest to see if my skepticism is well-deserved, or if Tom has indeed come up with the Holy Grail of forecasting that investors have sought for decades.  Below, you will see a list of Tom’s most recently published forecasts — I extracted these values from the charts on his website.  At the end of the year, I will bring this post back to the top and, assuming Tom is still updating his figures, we can see how he did.  I’m going to guess that Tom will get one or two of these about right.  I will publicly congratulate him if he is more accurate than that.

Forecasts for January 1, 2013, taken from AAFORECAST.COM on March 20, 2012:

Without doing any modeling, my guess is that the unemployment rate will be a few tenths higher than what Tom predicts, the S&P 500 will be about 1360-1380, and the Gold ETF will be roughly where it is now or a bit lower (say 15.75-16.00).  See you at year’s end.