http://silverenthusiast.com/grading-jon-nadler/

Written on October 11, 2010 at 6:55 am by Tim

Grading Jon Nadler

Filed under Editorials 49 comments

It is popular opinion that Kitco’s frontman Jon Nadler has a poor understanding of the precious metal markets, but I decided it would be prudent to see if the complete lack of respect for this man from the enthusiast community was justified given his forecasting performance over the last few years. The results were fairly conclusive. Even when given a timeline of just a few months, Nadler is woefully off the mark across the board, and often doesn’t show up in the right zip code when asked about longer-term expectations. Unfortunately, most of his predictions are on gold, but we found some great quotes on why he doesn’t appear to like silver and his general attitude towards the metal. Don’t take my word on it, however, take Jon’s:

11/2006:
Nadler predicts the 2010 average price of gold to be $800/oz. Unfortunately, this year’s average looks to be around $1,150 glancing at a chart. Hey, what’s a 41% miss among friends?
Timeframe: ~4 year prediction
Result: Garden-variety fail.
Grade: D [we'll cut some slack on an extremely long term prediction. it's like kicking a 70-yard field goal; we knew he'd miss, but why even bother trying?]

10/25/2008:
Nadler predicts gold in the low $500/oz range and reflects that a world of $2,000/oz gold is “not one we’d like to live in“. He doesnt see anything ‘pleasant’ for silver within two years, and further, he comments on those crazy eBayers paying more than $5 over spot for silver (silver is still around $5 over spot on eBay, by the way),. He does hit a softball question about his greatness out of the park, though: “If I tried to convince you that it’s a one-way street and it can only go that way and buy now, beat the rush, two years from now you might not want to talk to me. I would have lost credibility. It’s not about being right on price forecasts, although I don’t think I’m too far off on those either.” Actually, if Nadler convinced you to rush out and buy gold then, you’d be up 87% and probably sending him Christmas cards every year. Regarding price forecasts, well, he’s not off to a good start.
Timeframe: Unclear, assuming 1-2 years
Result: Epic fail.
Grade: F [he lauds his own credibility for keeping you out of market that would have almost doubled. brilliant!]

10/26/2008:
Nadler marginalizes silver, stating that silver is just a “trade” and opines that it has “pretty much lost its long-standing monetary attributes“. Had someone made a ‘trade’ in silver and resolved to not sell for 2 years (ie, go long) based on Nadler’s comments? They’d be up 144%.
Timeframe: 2 year prediction
Result: Epic fail.
Grade: F- [it's one thing to say an asset will drop and be wrong, but it's an entirely new skillset to trivialize an asset and have it rocket 144% over two years].

12/31/2008:
Nadler predicts the average 2009 gold price “..will likely register near $810 per ounce, following its $871 average for the current year.” He tries to pad his prediction by citing it could be $100 higher/lower given financial and geopolitical uncertainties. So that’s anywhere from $710-910/oz. Nadler misses again, as average prices were $972. Not a huge miss if you consider his padded-high-end figure, but gigantic at his padded-low.
Timeframe: 1 year predicition
Result: Garden-variety fail.
Grade: D [his disclaimer that he could be wrong saved him from an F, but he was still 36% off from his low].

01/06/10:
Nadler kicks off 2010 with a swath of predictions: “For the six months ahead, we envisage …. $880 to $1280 with the inside channel of $970 to $1070 likely. For the time being, the average price is likely to stick fairly close to the 2009 number near $970 per ounce. With a view to the three-year average gold price still near $845, and with the aforementioned rising possibilities of Fed behavior changes, the expectations that the final 2010 tally will see even better than last year’s 25% year-on-year gains in gold, may be…great expectations“. He made their six-month high-end just accurate enough to cover the $1200/oz price gold was at the time, but wasn’t close on the low-end. Gold was around $1,120 on January 4th, 2010. It will need to close at or above $1,400, which is a real possibility given the current pricing, to prove him wrong on exceeding the year-over-year from 2009 to 2010.
Timeframe: 6 months and 1 year
Result: Partially accurate
Grade: C [he was just within his 6-month range on the high side, but he gave himself a 45% margin of error to do it. if he's right on the year end not exceeding 25% gains, he's only going to be right by a percent or two, no more.]

05/18/10:
Nadler, when asked to predict the price of gold throughout 2010, cites multiple sources again supporting an $800/oz figure. Strangely, even though [see above] gold was nearing his high-end pricing for mid-year, he decided to predict average pricing well below his first 2010 predictions. While the whole world was watching gold sustain gains, Nadler, apparently, was waiting for a collapse. He tries to validate his lowball pricing by arguing “I am not alone in computing such figures.” He might not be alone, but he’s dead wrong. He went as far as to contemplate the ‘right price’ for gold clearly stating “I still think that between $680 and $880“.
Timeframe: 6 month predicition
Result: Epic fail.
Grade: F [no excuse for this one. relatively short-term call and he couldn't be more wrong.]

09/09/10:
Nadler wisely stops trying to make predictions in writing, so decides to make video predictions instead. He dances around a question of where he sees gold, but appears to suggest gold won’t break $1260/oz unless we’re in ‘a crisis mode‘. Further, ‘contrarians are optimistic that they’ll see their day yet‘. Well, a month later and $100 higher, Nadler appeared to miss predicting what turned out to be a 4.8% monthly gain for gold. Surely a ‘senior analyst’ could have foreseen something that was so apparent the the rest of us?
Timeframe: 30 days
Result: Epic fail.
Grade: F [tries to hedge himself by quoting others, but effectively calls a top when it was anything but.]

As the chart below illustrates, Nadler hasn’t quite perfected the art of forecasting prices. Curiously, he is consistently low on every prediction I’ve found, apparently trying quite hard to be the antithesis of the ‘radical gold bug extremists‘ (his phrase, not mine!) he so despises. It continues to beg the question of why Kitco continues to employ this gentleman only to be consistently wrong. Anyone with even a crude interest in the market should be able to forecast with the same gaping 30-50% margin of errors. For my money, I am proud to note that I’ve never purchased a single piece of gold or silver through Kitco, and I certainly encourage anyone reading to avoid them as long as Mr Nadler is on the payroll.