It’s time for 2022 predictions, and a recap of my 2021 predictions. Overall, my 2022 predictions and forecasts are a continuation/extension of 2021, with little changing.
My 2021 forecasts were right on the nose. The only thing I missed was CPI going up a lot, and all the headlines about inflation and shortages. But it was not an actionable prediction, meaning there is no way myself or anyone else could have made money by being right, so I cannot beat myself up for missing it. Imagine if it were December 30th, 2020, and you had forewarning or perfect foresight of impending inflation for 2021. The ‘logical’ trade would have been to go ‘long’ gold (given how it’s touted as an inflation hedge), ‘short’ the US dollar (as Peter Schiff has repeatedly warned of a dollar collapse due to hyperinflation, and although 5% is far from hyperinflation, given the alarmist headlines it may as well be 1924 Germany ), and also ‘short’ treasuries (because of the expectation of higher interest rates and inflation generally being a negative for fixed income). So lo and behold a year later, how did that turn out? Gold did nothing, and treasuries and the US dollar actually did well (the dollar had one of its strongest years ever, gaining 5% as shown below). Also, the very people who got this prediction right were right only by luck, not skill. If someone like Peter Schiff predicts high inflation every year, eventually, given enough time, he will be right at least once.
Hence the most ‘obvious’ inflation trade–buying gold, shorting treasuries, and shorting the dollar–fell flat on its face.
I got everything else right. For example, regarding Covid and vaccines, I wrote:
Despite all the hype, the vaccine will not put much of dent in terms of daily Covid case counts and deaths. Even if there is an appreciable decline, it will not necessarily imply that the vaccine will have worked. The Covid vaccine is not at all like childhood vaccines of diseases such as Polio and Measles, in terms of being much less effective, having lower compliance rates, and much shorter duration of protection owing to the high propensity of Covid to mutate, which means multiple vaccinations will be needed, hence lowering effectiveness even more so. The restrictions and lockdowns will continue all year. All the experts who in mid-2020 promised that things would return to some semblance of normalcy by early 2021 were wrong again, as experts tend to be. It is the usual bait and switch: force compliance now in the hope/promise that said restrictions will be rescinded at a later date, and when that date comes, nothing changes or it is pushed back again. These politicians, health experts, policy makers, etc. are liars.
Given the rise of Delta and Omicron and record numbers of daily cases in the US, even the liberal media has finally stopped saying that the vaccines prevent Covid. There are going to be more lockdowns and protests in Europe and Australia, more variants, more deaths, more cases, etc…no change between now and 2023.
— Defiant L’s (@DefiantLs) January 4, 2022
As I also correctly predicted, the stock market will keep going up despite this, and no recession either. GDP growth, corporate profits, consumer spending, exports, etc. will remain robust. The people dying or getting really sick due to Covid are either past their peak productive years (old or disabled people) or were never that productive to begin with (such as average/low-IQ people)…that’s just the harsh/Darwinian reality of the situation and why all of these deaths and illnesses have not hurt the overall economy.
There will be no tensions or escalation of US relations with China; no invasion of Taiwan by China. Just the usual sabre rattling.
The US dollar will remain strong, and the Turkish Lira will continue crashing. Treasuries will remain strong despite the fed raising rates once or twice. There will be no ‘taper tantrum’ or ‘shock’ to the bond market despite frequent predictions of such. What matters is not that the fed raises rates, but the expectation of future rate hikes. The fed will raise rates, but only very, very slowly, so the bond market will not be perturbed by this.
CPI growth will revert back to 2-3%.
Bitcoin will continue to lag 3x index ETFs such as TECL, TQQQ, and UPRO. Bitcoin will lag the S&P 500 and Nasdaq. Tesla stock will end the year at at least $1,300 (already at $1,160, having gained 10% on January 3rd due to blowout deliveries, again, as I predicted). My Tesla and 3x tech ETF portfolio, presently valued at $450,000, will likely grow to at least $600,000 by the end of the year. Because I am not using options, it does not matter if these targets are not met; there is no path dependency risk.
Regarding individual stocks:
Tesla stock will keep surging…no-brainer prediction. Same for Palantir stock. Same for FAANG stocks, Microsoft, and PayPal. Tesla will be worth $1 trillion, on its way to $10-30 trillion valuation within 2 decades as I predicted. Amazon stock will probably double in 2021. An increasingly large percentage of economic activity will be funneled through a shrinking number of companies.
Amazon did not double (flat for the year), and PayPal (flat) and Palantir (down) did not do that well. So those were wrong. This is why I do not trade options like on WallStreetBets. Too risky.
Regarding Tesla, the personal brand of Elon Musk will be even bigger than it already is (although I am not sure how to quantifiably measure this in terms of making a prediction). Elon’s Twitter account is the most popular on the site by a huge margin (way more popular than Biden, Obama, or any celebrity), and is a social network in and of itself. If Elon wants to become a trillionaire even sooner (which will happen in a few years anyway), he should start his own social network and collaborate with Trump. Elon is a bigger celebrity now than any celebrity of the past. There is nothing comparable to it, and it shows no signs of slowing. Tesla stock going to $2,000/share soon will make him even bigger, or a Space-X mission to the moon or mars (although this won’t happen for a long time). Same for Joe Rogan, who will continue to gain in popularity and influence, too, as much as the left wishes he didn’t exist.
Also, e-celebs, YouTube creators, Ben Shapiro, Jordan Peterson, Lex Fridman, Eric Weinstein, etc…(the whole ‘IDW’) will continue to grow in popularity and relevance as people seek alternatives to ‘controlled media’. There will also be the continued intensification of the culture wars, although I am not sure how to measure this.
There will another mass shooting incident.
Big tech will keep getting bigger. These are not just technology or consumer-tech companies, but infrastructure companies for a future world in which federal and state governments, encumbered by debt, inefficacy, and bloat, have abdicated their roles and power to these companies. The implication of this is that it’s one step closer to the creation of parallel institutions that will coexist with existing institutions or even supersede them, possibly within 50-75 years. Tesla will soon be worth $2 trillion, not because it’s a car company, but because investors are looking way out to a future in which Tesla is a major energy and transportation infrastructure provider for the future type 1 civilization.
Biden, ‘the most mediocre president ever,’ will continue to see his approval ratings hover around 40-45%, similar to Trump. There will probably be another bloated stimulus program that lines the pockets of big companies, middlemen, and bureaucrats. There will be no student loan forgiveness/cancellation, no ‘billionaire tax’, or push for single-payer/Medicare-for-all.
In 2021 I wrote:
In spite of all the predictions by the alt/dissident-right about how bad Biden will be, I predict the Biden presidency, especially his inaugural year, will be surprisingly uneventful. Biden’s main focus , as I said many times, will be on the economy (such as pushing for more stimulus, as if we haven’t had enough stimulus already) and the logistics of distributing the Covid vaccine to millions of Americans. There will be no court packing, no tax hikes, no student loan forgiveness, no war with Iran, etc. The neocons may want to push America into another Middle East quagmire, but will probably wait until Biden is gone.
100% correct. None of the bad things everyone said would happen, actually happened. There was no court packing, no escalation of Middle East wars, no tax hikes, and so on…
The student loan bubble, the most watched bubble ever and the most ‘inevitable’ crisis ever, will continue to keep expanding .The college wage premium will keep widening, as I correctly forecasted a year ago.
Home prices, rent will keep going up. No crash even though everyone keeps predicting it and even in spite of rising interest rates. Also, 30-year mortgage rates will remain low.
FAANG compensation will keep rising even more, creating more millionaires, such as with FIRE.
Like 2021, the recurring theme for 2022 is inertia, an imperviousness to change. The political climate is angrier and more divided than ever, yet so little changes, and most people seem to have so little effect on anything despite collectively making so much noise. The sense of being ignored is probably a contributing factor to the worsening of discourse. Everyone, liberals and conservatives alike, are in general agreement that the system is broken, that ‘our’ policy makers are inept or callously indifferent, yet what can be done.