I thought it a good point to review my pontificating in 2013.
So I’ve pulled all my articles from the year to see if I’m a dunce.
This is what I found.
UK will never leave Europe. The referendum will never happen. The ruling UK Tories are still promising this but in 2017, whether they will win the next election in 2015 is unknown. If they do, will they follow through. If there is any chance there will be an increasing anti-europe drumbeat to create the voter storm needed to re-elect the tories on an anti-euro ticket. Anything short of a thunderous anti Brussels campaign means the policy isn’t real. We are yet to hear it.
Apple will revert to $200 to $300 a share. Unless Apple come out with a new miracle product we have seen the top of the Apple stock price. Competition will erode its margins and likely in time its sales. iPhone and iPad will go the way of its computers and iPod, where sales are falling. Apple was over $500 at the time and went below $400 by mid-summer. Its back up as few percent from this bearish post after a strong rally alongside the market. The efficient market says the best prediction is always to state the price will be unchanged over any time frame. So I guess I have to accept mostly wrong on this call, but I remain stubbornly bearish.
Dow will hit 15,000 this year and 16,000 by 2015. Seeing as the Dow was 14000 at the time, 15000 was a brave call. Remember articles are permanent so even the best pundit is going to be wrong a lot and on record. If you bdont wish to appear an idiot this is a sobering prospect. At the time of writing I couldn’t believe my own chart so I thought I’d give 16000 more time to brew. That is still the best call as to call the market to rocket like it has is just to aggressive. However to make money in the market the only thing you really need to know is the direction, when is secondary within reason. So I like this prediction. Over the years my dow calls have been pretty good. My most recent prediction, for 20,000 is insanely aggressive but if we don’t hit an iceberg, I believe we are heading there.
Apple is a bubble. Yep still a bubble, dammit! In the end all bears get their crash but that doesn’t make the prediction smart. The recent apple Rally was strong, but I still see the stock as in a post bubble dynamic. The glory days are over. My key point with all-star stocks is, don’t have so much of them that you cant afford for them to fail. By all means own some Tesla, but don’t put your financial well-being on the line for it. People do and time and again get horribly mangled.
If trade is not balanced the developed world will simply become poorer and poorer at best until it is as poor as China, Russia, and Brazil etc. People are asking, why do people from the BRIC own all the expensive real estate in our capital cities and we cant afford to live there. The answer is, they are rich and you are poor. People confuse rich countries with ones their citizens are also rich in. When countries take all of private sector GDP in tax, the people are poor, meanwhile the states that rule them are rich. China and Russia takes 25% of private sector GDP in tax and their citizens have money. In places like Denmark the state takes more than 100% of private sector GDP in taxes and their citizens have to borrow just to make ends meet. Are you rich if you have to borrow just to live?
Groupon, Zynga are all overvalued. Linkedin is a bubble but isn’t close to the top yet. Google will breach $1,000. Groupon zoomed. Zynga fell by 33% then crawled back in the Nasdaq boom to put on 15% or so. Lonked in zoomed 60% and pulled back to about 30% by year end. Google went from $800, smashed $1000 and is now about $1100. Apple short, Facebook long back in June 2012. Facebook was $31 Apple was $584. At the time of the article Facebook is now $58, apple $543. Apple was $449 and face book $27.39. That’s a 47% profit since the summer of 2012 with the added benefit of hedging the general technology frenzy. However who would do that trade. Its too boring for anyone up to their neck in dotcom2.
May dip will be a small one. And so it was. Why? I believe that the may dip is a soverign wealth fund rebalancing event. Their strategy has changed. They have gone from pro bond to pro equity. As such the rebalancing didn’t hit stocks so hard as the flow was towards equities which softened the disruptive effects of this yearly process, but it did smash gold. I might be mad but the call was good.
Gold will be $5,000 by 2020 because inflation will hit. Will you remember??? Ill remind you if I’m right in 6 years. There is of course no inflation in the developed world, it is just the things you are buying that have gone up in price. That’s nothing to do with CPI, how could it be?
Bonds are going to get monetised. Sovereign debt will be turned into cash. The economy of the U.S. is going to get very liquid indeed.
Japanese market heading for 16,000 as the first plateau of a long-term multi-year bull. May 15th Nikkei closed at 15096. On May 23 it hit 15942. I drew a chart that said watch out at 16000 and as if by magic the price pulled back 2000 point in 2 days. Wow, not bad, almost makes up for Apple!
I wont write anything about the next 6 months as its still a bit too early to look back on these predictions. Tesla did spectacularly fold when I said it was a bubble. I did say love the Twitter IPO before everyone did and call a 10% apple rally, but that’s better left for six months hence.
I hope you made some money from my thoughts and I hope I can continue to get it write for you, apart from apple of course.