Grade The Analysts: Caldwell Wins Race Against 15.1 Million

by Bertel Schmitt

March 2nd, 2012 11:02 AM

RankAnalyst GMFord Chrysler SAARSAAR DiffOEM DiffOverall1Jessica Caldwell (Edmunds.com)-5.0%18.0%32.0%14.44.64%18.15%22.79%2Brian Johnson (Barclays Capital)-3.6%7.1%32.0%14.35.30%20.34%25.64%3Jesse Toprak (TrueCar.com)-6.1%14.0%27.0%14.35.30%20.94%26.24%4Patrick Archambault (Goldman Sachs)-2.6%11.0%26.0%14.35.30%21.44%26.74%5Peter Nesvold (Jefferies)-5.9%13.0%27.0%14.25.96%21.74%27.70%6Emmanuel Rosner (CLSA)-3.9%5.6%25.0%14.53.97%29.14%33.12%7Joseph Spak (RBC)-5.2%8.0%24.0%14.16.62%29.04%35.67%8Rod Lache (Deutsche Bank)-4.0%8.7%22.0%14.16.62%29.14%35.77%9Alec Gutierrez (Kelley Blue Book)-5.8%5.6%25.0%13.88.61%31.04%39.65%10Chris Ceraso (Credit Suisse)-5.6%3.4%22.0%14.16.62%36.04%42.67%11Adam Jonas (Morgan Stanley)NA NA NA14.35.30%300.00%305.30%12Matthew Stover (Guggenheim) NA NA NA14.35.30%300.00%305.30%13Himanshu Patel (JPMorgan) NA NA NA14.25.96%300.00%305.96%14Itay Michaeli (Citigroup)NA NA NA14.25.96%300.00%305.96%15Alan Baum (Baum & Associates) NA NA NA14.07.28%300.00%307.28%16Jeff Schuster (LMC Automotive)NA NA NA14.07.28%300.00%307.28%17George Magliano (IHS Automotive)NA NA NA13.88.61%300.00%308.61%Average-4.8%9.4%26.0%14.2Actual1.1%14.3%40.4%15.1

The strong February was good news for the car industry, bad news for the analysts. Even the most optimistic prognosis could not withstand the mad February rush to buying cars.

February ended with a Seasonally Adjusted Average Rate (SAAR) of 15.1 million, something the world had not seen since carmageddon. Even the most optimistic analyst (and the winner of the February round of Grade The Analysts) would predict only 14.4 million.

GM had a big minus sign in front of every estimation. It came in with a 1 percent gain. Chrysler sales were estimated to grow “only” 26 percent. They grew 40.4 percent. Even with Ford, the augurs were too cautious.

As any racer will tell you: In a race where everybody is confused, the least confused wins. Despite not calling anything right, Jessica Caldwell of Edmunds wins by coming slightly closer to the truth than anyone else. Nevertheless: 22.79% deviation, that is the worst win in Grade The Analyst history.

While we are at it, we welcome three new analysts, Emmanual Rosner, Chris Ceraso, And Matthew Stover. We are pleased that two out of three FNGs decided to go whole hog and to provide estimates not just for the SAAR, but for all Detroit companies. It’s the only way to win this game. In racing, you don’t get points for not racing either.

#BertelSchmitt #February2012 #GradeTheAnalysts #GradeTheAnaqlysts

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3 of 6 comments

Dude500 on Mar 02, 2012

The bigger question is: is this jump in SAAR pointing to a trend, or is this just a blip in the radar? Seems like with employment still weak and housing still down, car sales should remain low. But what's the explanation for the jump in February? And if SAAR continues to grow, why?

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- Lorenzo on Mar 02, 2012
  
  My take is that people have been keeping cars longer for a good 5 years. It may be cheaper to fix an older car, but at some point the scale and expense of the repair isn't worth it. The high cost and limited selection of used cars probably induces buyers to visit a new car showroom. OTOH, those with a late model used car that doesn't fit their needs can benefit from higher trade-in value and a more fuel efficient replacement, with warranty protection against costly repairs.
  
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Lynn Ellsworth on Mar 02, 2012

I am reading "Thinking Fast & Slow" by Kalneman and what I am learning is how bad "experts" in all fields are at making predictions. The worst predictors seem to be chief financial officers so keep a watch on where your retirement funds are. Thank you for these monthly prediction comparisons.

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