Early Retirement Extreme Forums

I propose this: give your best speculative prediction of what you think is likely to happen in terms of "the economy" / markets in 2020. Be as broad or as narrow geographically/asset-class-wise as you wish, and can be as quantitative/qualitative as you wish. Make concrete predictions - no, "it's gonna go up or it's gonna go down" or "if this happens, that happens, but if this happens, that happens." Just your best speculative theory, and your reasoning. Then beginning of Jan 2021 we issue a winner. Also, please do not comment on the predictions of others here. Make a separate discussion thread. This thread is just for recording predictions.

Here is my prediction: Politically, I think the Jan 3rd Iraq event will end up being more significant than the market discounted. It was barely a blip market-wise, and the news quickly spun it as, "well, he was a bad guy so we did them a favor anyway," but. It's a sense I have. Feels like the first link in a chain of dominoes that would result in an unforeseen consequence to me. This sounds too much like, "this event will impact other events", which, of course - any event impacts other events. My argument is this event will end up much more significant than currently foreseen or discounted. [What I hope will happen: nancy and mitch sit down and with their donors and are like, yea you wanted this dotard cokehead so you could do whatever you want, but look, he's a loose canon, we can't keep protecting him anymore, we need to impeach his ass. The risk of him hitting a big red button because someone told him, "well, what are'ya gonna do!" is way too high. Said dotard gets impeached and can't get reelected, bubble lets out air, and someone sane is elected in November. I don't even care if it's a democrat or a republican, just someone with an actual understanding of the dignity of their position, two brain cells that talk to each other, and a modicum of sanity. Murica: I like you guys. I want better than this shitshow for you.]

The market: everyone is preparing for stocks to tank and HYG to blow up. Everyone is looking for stocks with a "good balance sheet" - by which most people really mean not leveraged to the eyeballs. My prediction is that it's precisely the most leveraged companies that would do the best, because the money printing / debt monetization would proceed at scale and the real value of their debt would decline significantly, making them less leveraged in real terms and thus raising their valuations disproportionately. (This is one for the TSLA bulls, I guess though I am too chicken to act on it myself). But yes, the prediction is that while everyone expects HYG to be obliterated, it would actually outperform.

By 31 December I predict:
S&P500: 3,881.82 (+20%)
TSLA: $500.00 (+13%)

I'm going to predict political risk manifests in November and SP500 finishes -30% for the year and 2021 is as bad or worse.

After an especially jumpy autumn, the market ends down roughly 9% on the year.

Edit: we also start to see minor municipal pension failures in 2020, and this becomes a bigger issue.

Seasonally-adjusted weekly initial unemployment claims (or their 4-wk moving average since weekly is noisy) will end 2020 higher than they started (222k for the week ending 12/28/19).
Edit: by a lot

US stock market margin debt will at no point in 2020 exceed the current cycle high set in January 2018.
Edit: WRONG, November margin numbers (and probably December) managed to beat the January 2018 euphoria.

The ISM manufacturing PMI will fall below 45 at some point in 2020.
Edit: Correct, low of 41.5 in April.

S&P500 RSI (14 day) will fall below 50 at some before the end of February (I know this would not seem like a bold prediction if it weren't for this crazy rally).
Edit: Correct, fell below 50 on 1/27/20.

Gold mining stocks (e.g. RING ETF) will outperform S&P500.
Edit: Yes.
S&P500 total return: about 18%
RING total return: about 25%

Donald Trump will lose the 2020 presidential election.
Edit: Yup

Most will face a frugal future, well into the decade. Possibly improving toward the end.

Stock market begins a moderate correction during a rocky summer and early fall, S&P down around 15-25% by end of year.

Amazon announces it is getting into the EMR business. Health insurers and pharma drop on the news. AMZN ends the year flat or slightly up.

Republicans maintain control of Senate, Democrats of House. Trump loses re-election. One or more traditionally red sun belt states (e.g. Utah, Texas, Georgia) votes for the Democratic presidential candidate. Iran conducts attacks against Trump properties after he leaves office (more a five year prediction than one year).

African swine fever devastates European pork. A sizeable protest movement erupts in mainland China. PG&E has another round of widespread blackouts during the dry season in California. Utility is taken over by its hedge fund investors. Net migration to the state continues to be negative and drop further, cutting population growth in half.

bostonimproper wrote: ↑

Tue Jan 07, 2020 10:06 am

Iran conducts attacks against Trump properties after he leaves office (more a five year prediction than one year).

I know it shouldn't but that would make me smile.

I predict a neutral year, equities wise, hitting November within +/- 5% of where we are now. I'm not sure whether Trump will be reelected, but I predict he gets more individual votes than he did in 2016. If he wins, I see a moderate-to-neutral end of the year. If he loses, I see an immediate bump but the year ending negative.

Rackety year but S&P ends up by 13%. Bloomberg wins by larger margin than polling predicted. 50 billion devices connected to internet.

I predict that the markets will go up, and down, but not in that particular order.

I predict that most predictions made about short term market directions will, in the aggregate, be slightly less accurate than a random generation would have been.
I also predict that, in the next decade, USA stocks will underperform world ex-US

I don't put any stock in these sorts of predictions, but it's fun to play along.

I think time spent on investing is better spent reading analyst reports and looking at charts, but sure I'll play along. It's fun.

I expect some headline inflation in the form of higher commodity and real estate prices, but consumer price inflation to remain subdued in America. I think commodities rising will be due to negative interest rates in Europe. If bonds pay negative and commodities pay nothing where would you store wealth? I expect consumer price inflation to stay low because it is not hard for companies to raise money to expand supply capacity and the deflationary effect of technology. In Europe consumer price inflation will outpace that of the US, because who wants to make loans to increase supply with those terms?

I expect real estate prices to continue upward. Industrial real estate will likely outperform commercial, because of the growth of e-commerce requires more warehouses and fewer brick and mortar retail outlets.

I expect Chinese growth-rates to revert closer to the long term average.

Lots of noise and volatility ultimately leaves the S&P 500 at 3250 on December 31st- relatively flat. Democratic candidate wins the presidency.

I like that we can have this conversation here without all the indexers* reminding us how it is impossible to predict anything.

*I am one. I can talk trash about them.

Bigato, you are right, I did miss your post. I agree with what you said though. I don't like how much of a religion indexing has become in some circles.

Political: Trump & Macron wins

Monetary: Usa markets -7% (Recent history, aka 24 years, there has been a market bump at a presidental party change due to party hopefuls investing for the "new" future. There wont be a change and congress will hem and haw until then.)

Social: Turkey releases millions of migrants to Europe.

Environmental: Australia embarks on massive tree planting.

thedollar wrote: ↑

Sun Jan 05, 2020 11:45 am

TSLA: $500.00 (+13%)

congrats man first guy to get one right this yr

that thing's chart gives me the heebie-jeebies, you're in my thoughts man please get out even over the internet i've got anxiety

jk i remember you're saying you've decided to stick with it, i'm too chicken to do anything but watch but good luck hope it works out

@ertyo

Wohoo! my prediction came true

Don't worry about it, it's a very small part of my investments <2%. I realize it could drop 50% in a heartbeat and I'm OK with that.

I'm more worried about S&P500 and current stock market valuations. The day after day, month after month increases seem insane