Most investors are familiar with the 1979 Business Week issue that had the story "The Death of Equities." Those investors also know that issue represented one of the most contrarian market indicators of all time, considering the extended bull market that began shortly after. In that spirit, let's review some of the worst predictions for 2007.

On stocks
In October 2006, an analyst report on online retailer (NASDAQ:AMZN) stated, "AMZN is a stock that continues to live on borrowed time."

At the time, Amazon was changing hands at about $39 a share, and contrarian investor Bill Miller owned a ton of stock. I haven't analyzed Amazon, but when I look at the company, I see no net debt and very healthy free cash flow generation. And I can't remember the last time I bought a book at Borders (NYSE:BGP) or Barnes & Noble (NYSE:BKS). Those analyst comments made it sound as though Amazon were fighting to survive.

Today, with the stock trading at more than $90 and sporting a price-to-earnings ratio of more than 100, it's probably too rich for most investors. But the company's business model is strong, and I just don't see people choosing not to pay less for books.

On housing
In January 2007, the chief economist at the National Association of Realtors said, about the housing market, "The steady improvement in [home] sales will support price appreciation ... [despite] all the wild projections by academics, Wall Street analysts, and others in the media."

I am certainly no economist, academic, or analyst. Yet we have all seen housing supply continue to go up as homebuilders continue to build -- albeit at a declining pace -- while demand goes down. It's tough for any goods or service to appreciate in value under these conditions, and in 2007, housing prices got worse and fell further than many had predicted. To be fair, though, plenty of smart people didn't see how painful the housing market would become as a result of the crumbling lending market.

They said what?
"We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system," Federal Reserve Chairman Ben Bernanke said in May. Months later, a global credit crunch of widespread proportions set in and affected the likes of Citigroup (NYSE:C), Merrill Lynch (NYSE:MER), and just about everyone else with exposure to credit products.

And then you have Lord Browne, CEO of BP (NYSE:BP), who in June 2006 found it "very likely that oil prices will range in the medium term around an average of $40" per barrel. He didn't stop there. "In the long run," he said, prices "could even be $25 to $30."

It will be a long time before Browne is vindicated. In 2007, oil prices have averaged more than $70 a barrel.

Take it with a grain of salt
Folks like Bernanke and Browne are where they are because they are extremely smart. But no one is perfect, and if even they slip occasionally, what does that tell you about everyone else?

Not even Warren Buffett is right all the time, but what he does get right is avoiding the influence of predictions. After all, investors are constantly bombarded with predictions about the economy, opinions on the state of the market, and recommendations on buying and selling, and it's not always easy to filter out the noise.

Your best bet? Pay attention to what intelligent people say, but always exercise your own due diligence.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.