2024 predictions cont. (Meta, SVIX, McDonald’s, weight loss drugs, etc.)

Just like how in 2023 I singled-out META, which was among the strongest-preforming stocks of the S&P 500, for 2024, as part of my epic-sized prediction post, I am singling-out SVIX and META again for 2024. No need to change anything. For 2023, META only came up second to Nvidia (the others were/are not on the S&P 500 at the time):

So I picked the second-best stock out of 500.

SVIX is not a tech stock or a leveraged tech fund, but rather is an ETF which tracks the inverse of short-dated volatility futures. It tends to do well when volatility is flat or falls, but more specifically, when realized volatility is less than expected volatility, which is the case most of the time. The fund tends to do well in bull markets, although it did crash during Covid. It’s sorta like the opposite of the Taleb tail-hedging strategy–an overhyped hedging system which failed after 2020.

I first mentioned SVIX on November 3rd 2023, and since then it gained 28-percent, well in excess of the S&P 500, writing: “I was right about tech recovering, having added to the dip on Meta and SVIX last week.”

To add, for 2024, I reiterate my predictions that food companies will not be negatively affected by the new weight loss drugs, specifically, McDonald’s and Walmart. McDonald’s stock (MCD) has recovered earlier losses from Ozempic-based fears and is back above $290/share:

Walmart (WMT) took spill on earnings months back, but I also predict it will do well. Both stocks posted double-digit gains for 2023, and I predict similar gains for 2024 too. These companies thrive in almost any macro environment. During high inflation, they pass the costs by raising prices and or shrinkflation. During deflation or recession, they are perceived as bargains (even though McDonald’s is more expensive than preparing food at home and is hardly a bargain, as a viral post of an $18 Big Mac meal shows, which is about as expensive as a decent steak at the food store; fast food is overpriced).

The GLP-1 weight loss drugs will continue to see widespread use for 2024, and are the most promising answer to obesity yet, but will not solve the obesity crisis, or even put much of a dent in it. U.S. obesity rates will climb despite these drugs, but more slowly perhaps. The problem is a sizable percentage of people on these drugs do not lose much weight, as posts on Reddit show:

Those who lose only a little weight will be disinclined to continue taking these drugs, due to costs and other factors, so in the coming years we will see a lot of people who in 2021-2023 were formerly on these drugs regain weight. But some lucky individuals, so-called hyper-responders, lose a lot of weight and will probably remain life-long users, but this is only small fraction and is not enough to reverse the obesity epidemic or hurt food sales much.

But the windfall from these drugs will incentivize the development of even better anti-obesity drugs. Solving obesity will require a multi-pronged approach (e.g. targeting metabolism, digestion etc.), and I think it’s doable within 40-60 years. This is a long time, but it took about 20 years develop Wegovy, including clearing the regulatory hurdles and clinical trials. The major medical advances of the 20th century (e.g. antibiotics, statins, chemo, and insulin ) were low-hanging fruit and produced major marginal gains in life expectancy, especially antibiotics. Squeezing additional years by curing cancer and obesity will be many magnitudes harder than anything done before.

Other predictions:

1. Nothing will come of the Epstein files. The files are insufficient to prove criminal activity. What are needed are the tapes, which are conveniently missing.

2. Elon remains at the helm of Twitter/X, no decline of userbase despite people threatening to quit. Nor is the site sold.

3. Russia-Ukraine stalemate continues

4. The big one is the 2024 election. The outcome is a coin toss. I have no idea who will win, only that it will be very close. I’m not a fan of prediction markets, because unlike the aforementioned strategies, I have no edge.