Your macro/mkt prediction for 2022

[Humanofearth]

How brutally wrong I was on my first prediction. Always love reflecting and learning, improving. Hope everyone is doing well.

I see technology continuing its growth, automation, crypto, sovereign individual developing. Just not sure how much progress will be made this year.

[thedollar]

2022 Predictions

• Cash is trash will continue to rule in 2022. Lots of cash currently on the sideline as well as huge stimulus will continue to inflate assets.
• BTC will hit $100,000
• Gold hits $2,000
• S&P500 hits 5,000 for the first time ever!
• TSLA hits $1,500
• Inflation goes back down to a level lower than 3% towards the end of the year
• The 3 rate hikes planned for 2023 are rolled back due to lower inflation
• Brent (oil) falls below $60/bbl as demand disappoints
• Corona is 'over' or not a significant problem by Dec-22 as almost everyone has already had it

Boy am I wrong so far. BTC went from around 50k to 30k. Looks like gold actually hit $2,000 briefly. S&P500 and Tesla... don't even want to mention it.

Guess things could still improve (or get worse) from here

[Mister Imperceptible]

Peter Atwater used to work on Wall Street who is now a professor at William and Mary and so is not selling anything.

He coined the phrase “K-shaped recovery” as well as “Me Here Now” and “Us Everywhere Forever”.

I first heard him speak a few years ago:
https://m.youtube.com/watch?v=uRDYEyH4FVU

Saw this more recently:
https://m.youtube.com/watch?v=IrAP-qw41Xw
https://m.youtube.com/watch?v=_iV-nTQigOI

May be useful to someone who may be either heavily invested in growth/dreams or be receiving stock based compensation in a growth/dream company as to the risks if we move from the dream of “Us Everywhere Forever” to a concrete reality of “Me Here Now.”

[prudentelo]

What are you buying instead of broad US equity?

[Seppia]

Inflation will sustain and oil will keep going up (little known fact: USO has done better than Bitcoin in 2021). I’m 70% confident in this one.

Cathie Wood’s funds will have another year of underperformance, in spite of TESLA again powering to even more implausible highs. 90% confident on the ARK part, less so on Tesla. When it will break, it will be ugly.

China and (to a lesser extent) most of Europe will NOT move on from covid. It’s too good of an opportunity for politicians to exert power through fear. 90% confident

USO +65% YTD and inflation at 9%.
ARKK -55% YTD
China still locking down millions of people to protect them from what has become (thanks to vaccines and mutations) a bad cold

Missed Tesla -33% YTD (which was in part a reverse jinx) and luckily Europe opening up

[Mister Imperceptible]

What are you buying instead of broad US equity?

In my “don’t try this at home” options portfolio I am holding long dated HYG put options because if government bonds sell off more it should hit junk bonds even harder and even credit spreads should widen if there is a panic phase. I am also holding long dated QQQ and IWM put options, and SIL and SILJ long dated call options. I also have a small TLT call option position to partially hedge the HYG position if nominal rates fall, and in the event of a panic where credit spreads widen, both the HYG put position and TLT call position can appreciate at once- this a poor man’s version of Hugh Hendry’s most famous trade. I should add that the greatest risk to the options portfolio is that the asset markets now just chop sideways for awhile before anything significant happens and the options burn time value, so I hold cash in the options portfolio also.

I continue to hold a fully invested gold and silver mining portfolio that is long only without margin and does not attempt timing. I can endure any 50% or 70% or 90% drawdown of that portfolio in full knowledge that a crash that brings down the miners such is the catalyst for the Fed reaction function that will cause them to not only recover but gain new highs. Where the gold miners are unique is that if the Fed allows a full depression instead, the primary inputs of mining (energy and labor) become cheaper and mining profit margins explode anyway. See Homestake Mining in the 1930s. State confiscation of mine assets is a risk but I expect the politicians to come for energy and food first.

Cash is a strategic reserve. In March 2020 I looked to buy physical gold but when I saw that street prices were more expensive despite crashing paper prices, I bought miners instead. The capital gains from March and April 2020 investments are enough to cover all other losses from betting against the market these last 2 years. In such a circumstance where GLD is falling but physical gold is rising, one should consider physical gold properly as cash already, and should question why they hold GLD in the first place.

Edit: Adding the caveat that the above should not be regarded as hot tips for trades, in particular the options. For example, I bought QQQ, IWM, and HYG puts months ago, and have recently added to the HYG position now that equities have already come down a bit, and the TLT position is also recent. One should only consider individual trades and in particular options in the context of a larger strategy.

For example, I am aggressively positioned to generate crisis alpha because I already consider my financial goals achievable through income alone, and I consider my income susceptible to asset market developments. Some folks may not earn a high enough income and consider it necessary to generate a return in all markets, or they may already be retired and so it is better to remain diversified. Within my personal strategy it is acceptable for the assets not to perform on a short term basis as long as the underlying thesis has not been disproved by new evidence, while others may puke a gold mining stock if they buy it and it drops 50% because they have no conviction.

It has been awhile since I articulated positions instead of themes and the need to post the above edit is probably why.

[prudentelo]

Thank you for clear and specific answer.

You are betting on nominal stock market drop, rate rises, precious metal appreciation within some timescale set by the rate at which you are currently losing money and your predicted magnitude of these shifts

[theanimal]

Thanks for sharing the links @MI.

[thedollar]

Didn't we have a thread for 2023 predictions?

[PhoneticNachos]

BNPL is a huge industry for younger generations Z and Alpha , and I guess some Millennials too and older folks too I guess.

Sezzle is one of the fastest growing buy now pay later stocks in the industry. SEZL , some of my holding are up over 400%, and they are still so small market cap wise. This is a 10+ bagger in the making, right up Warren Buffett and Charlie Munger's avenue.

Also stocks like PUGE and SIRC and CYN are all going to be huge someday.