Profile – Dr Frank Shostak

About Dr Frank Shostak

Dr Frank Shostak has over 35 years experience as a market economist, central bank analyst, and builder of large scale macro-econometric models. His coverage ranges from analysis of stock, bond, currency and commodity markets.

Dr Frank Shostak is highly regarded among the financial community for economic framework, which places heavy emphasis on monetary data and its effects on various markets.

Frank Shostak holds a PhD, MA and BA honours from South African universities as well as BA in Economics from Hebrew University in Jerusalem. He was also professor of economics at the Witwatersrand University in Johannesburg and the university of Pretoria.

He is one of the world leaders in the applied Austrian School of Economics. He is also an adjunct scholar at the Mises Institute in the US. Dr Shostak has been an economist and market strategist for MF Global Australia (previously Ord Minnett) since 1986. During 1974 to 1980 he was head of the econometric department at the Standard Bank in Johannesburg South Africa. During 1981 to 1985 was head of an economic consulting firm Econometrix in Johannesburg.

Track Record – Economic Insights Performance Highlights


The following is a series of selected economic forecasts made by Dr. Shostak.  They are quoted from his publications utilizing the Austrian School of Economics framework.  These predictions were made throughout the course of his career and, while not intended to be an all-encompassing list, they focus on some of the major calls Frank has made.

A Historical Perspective:

Over the years, Dr. Shostak has analyzed many significant monetary developments which impacted GDP growth, bond yields, and the performance of the equity, currency and commodity markets. Several of these forecasts are highlighted below:

August 1987 – on the Dow Jones Index

“The severe imbalances between the real and financial sectors in most of the countries in the world, and western economies in particular, will create a severe recession . . . the bubble is approaching a dangerous dimension.”    Frank went on to say, “[Our analysis] suggests that a downward correction of 200 basis points is ahead of us.  From the beginning of 1988, the upward trend is expected to resume.”

September 1993 – on the Dow Jones Index

In September 1993, Frank wrote that “the stock market bubble could burst at any time”. By the first half of 1994 (January-June) the Dow Jones average declined by 8.8 percent.

October 1996 – on the Dow Jones Index

In October 1996, Dr. Shostak anticipated that the Dow’s strong performance would continue to be supported by Fed interest rate policy. Over the next nine months the market posted double-digit gains.

Early 1994 – on GDP Growth

Throughout January and February of 1994 Dr. Shostak forecast that economic activity would fall in the months ahead. From June, 1994 through December, 1995, GDP’s growth rate slowed from 4.2 to 2.0 percent year-over-year.

September 2000 – on GDP Growth

In September 2000, Dr. Shostak predicted an abrupt fall in the rate of growth of GDP.  By June, 2001 GDP growth hovered around one-half of one percent, down from 4.9 percent in June, 2000.

December 1993 – on Bond Yields

In December 1993, Frank’s analysis indicated that there would be “strong upward pressure on long-term yields”.  Long yields increased from 5.66% in January, 1994 to 7.18% by May, 1994.

May/June 1995 – on the US$/Yen

Throughout May and June, 1995, Dr. Shostak forecast a stronger US dollar/Yen relationship.  From June, 1995 through April, 1997 the dollar appreciated by almost fifty percent versus the Japanese Yen.

Late 1995 – on Gold Prices

Late in 1995 and again in early 1996, Dr. Shostak forecast coming weakness in gold prices.  In January 1996, the price of gold stood at $405/oz and fell below $370/oz by the end of the year.

Nice, But What Have You Done for Me Lately?

Early 2002 – on an Economic Recovery

Throughout 2002, Dr. Shostak, in a contrarian opinion, suggested that prospects for a 2002 rebound were very remote.  Frank stated “. . . no meaningful economic recovery can take place.”

November 2002 – on a 2003 Economic Rebound

In November 2002, Dr. Shostak predicted a rebound in economic activity in mid-2003, at which time, GDP growth began to accelerate.

December 2003/January 2004 – on a 2004 Economic Slowdown

Throughout the fourth quarter, 2003 and first quarter of 2004, Frank stated that he anticipated an economic slowdown beginning mid-year.  Frank forecast that “the so-called economic recovery may come to an abrupt end.  [The recovery] is likely to come under increasing pressure in the months ahead.”

Early 2008

At the beginning of 2007, Dr Shostak suggested that the stock market would experience a significant decline….” By December the stock index is forecast to settle at 800 a fall of 46% from the end of December 2007”. By December 2008 the S&P500 index fell by 38% from December 2007.

Early 2009

Whilst the equity markets were in their bear market, Frank continued to raise his contrarian voice, suggesting that the S&P500 was about to bottom and was to begin a significant rally…” The main message from the model is that there is a growing likelihood that the worse for stocks is over.” As it was, the market bottomed in February 2009 and began its rally.