2024 predictions, and recap of 2023

My predictions for 2023 were spot-on, only being wrong about Bitcoin going up. I was right about the stock market surging, about inflation fears subsiding, about Trump not going to jail, etc. It could not have gone better. Meta stock, which I singled-out in Jan 2023, was among the best-performing stocks of the S&P 500, rocketing from $130 to $350 for the year. I knew that the fears of layoffs, Metaverse losses, and advertisers cutting budgets were overblown or unfounded. The 70-percent decline of Meta stock in 2021-2022 was unjustified, and this massive recovery restores Meta to its more appropriate value based on the otherwise strong fundamentals of its mobile advertising business between Facebook and Instagram, Metaverse losses notwithstanding.

Here is what I wrote:

Prediction 3: META stock will do very well, outperforming the Nasdaq. Wallstreet has already written off the Metaverse as a dud and is looking ahead to 2023. Despite some slowdown of growth and profits, META still stands to generate tens of billions of annual profits for 2023. Through its three platforms–WhatsApp, Instagram, and Facebook–META still has a near-total grip on social networking, save for TikTok and Snapchat.

I was right about the Turkish stock market, economy, and Lira resuming its freefall after a brief reprieve in 2022, writing:

Prediction 1: Turkish stock market and ETF (ticker symbol: TUR) will crash in 2023. So will the Turkish lira (USDTRY). I forgot to add this in my original post. Turkey has the same problems that have plagued it from 2013-2021, such as brain drain, low IQs, lack of foreign investment, hyperinflation, incompetent leadership, etc.

TUR, an ETF that tracks the Turkish stock market, fell from $37 to $33 despite the S&P 500 gaining 23-percent:

And the Turkish lira (USDTRY) resumed its crash, the exchange rate going from 20-1 to 30-1 against the dollar:

I also predicted weakness of emerging markets relative to the S&P 500, due to lower IQs, higher inflation, corruption, etc. (the usual reasons):

Prediction 2: Emerging markets will lag the S&P 500. For the above reasons, there is no reason to ever buy emerging markets when the US economy and stocks are superior.

Sure enough, right again there too. EEM, an ETF which tracks an assortment of emerging markets, was flat for 2023 compared to huge gains for the Nasdaq and the S&P 500:

All those fears in 2022 and early 2023 about tech layoffs, inflation [0], interest rate hikes, and other problems also came to pass.

One thing that stands out about prediction posts is how everyone misses the big things. It shows how hard this is. No one predicted Jan 6th, Covid, the ‘2023 AI-boom’ (especially GPT-4 being so important compared to earlier iterations), the collapse of FTX, the 2023 surge of Nvidia , Meta’s huge stock comeback for 2023 (I got that one right), the October 7th attacks, Russia invading Ukraine, the overturn of Roe v. Wade, and so on. AI has been in the news for a long time, but no one pinpointed 2023 as being the takeoff year. Same for Israel vs. Palestine–a conflict which has been simmering for decades–only to explode literally in 2023.

No one predicted the inflation surge of 2022-2023 either (except for the people who tend make this prediction every year and just happened to be right). Where was “Coffeezilla” before Nov 7th, 2022, warning of the FTX fraud? He missed it [1]. Same for Matt Levine, Krebs on Security, and others. What was in hindsight so obvious (curly-haired guy stole customer deposits to fund his hedge fund, among other endeavors) eluded everyone. Also, I think too many people also turn prediction threads into wish lists. The most interesting type of predictions are those that are not too obvious but also have a reasonably good chance of happening…the stuff that is easy to miss, at least somewhat probable (with some well-founded justification for happening), and important.

For 2024, I am going to roll over my 2023 predictions as it pertains to finance, economics, Meta, etc. The bitcoin ETF will be delayed, Bitcoin will lag 3x leveraged tech funds (TQQQ & TECL), and will fall for 2024. Yesterday, after a brief and pathetic attempt at a rally above $45,000, Bitcoin crashed again below $42,000 this morning.

This is why I never sweat this stuff and stick with the gameplan. I don’t have to worry about the unknown and losing money because I already know what will happen based on having the correct mental models and framework of the world in which being right axiomatically follows. The world really is not as uncertain as commonly assumed to be. It tends to be the same rules and patterns, albeit with some occasional tweaks (like Trump entering the political scene).

Other predictions for 2024:

1. The outcome 2024 United States presidential election will be razer-thin and decided by a handful of swing states. The results will be contested, but no unrest like Jan 6th. Unlike in 2012 or 1996, Biden’s approval ratings are much lower compared to past Democratic incumbents, which is why it will be close. Meanwhile, Trump is as popular as ever among his base. There is no evidence that despite the liberal media’s best attempts at equating him with white supremacy, extremism, or other bad things, that support for Trump has in any way lessened. America is more divided than ever too, even more so than 2016, 2020, or after Covid. The media thinks that by trying to make Trump’s supporters look bad or by exposing Trump’s misdeeds that supporters will defect, but it has the opposite effect of making both sides more fixed in their views.

The pearl-clutching by the media about how Trump is not ‘respectable’ will change no minds, just like it didn’t in 2016 or 2020. No one is that outraged by Trump except those who are instructed/scripted to do so because their jobs require emoting outrage. Billionaire hedge fund managers (like Bill Ackman) and plumbers alike support Trump for what he represents–that being a bulwark against an encroaching democratic-elite and Washington corruption, and his candidness and strait-talking personality is a welcome departure from the scriptedness and fakeness of ‘politics as usual’.

2. On a related note, I predict Trump will nominate Nikki Haley as his running mate, to the disappointment of some of his more far-right supporters on Twitter and myself included. Trump has a long history of doing this sort of stuff, in which he panders to the base and comes up empty or does the opposite, so this should not be much of a surprise.

3. AI will continue to disrupt low-stakes industries, like text and image generation and freelancing. There will be no white-collar job apocalypse, no human enslavement by robots, or the earth being converted to paperclips , goo, or other inanimate substances, or other doomsday scenarios that experts dispense with certainty. Life will go on as usual, except with these new technologies that may disrupt some industries but otherwise things will be the same. We’ll look back at such fears as silly and irrational. Maybe this comes off as too optimistic or flippant, but a good rule of thumb is the next crisis is usually where no one is looking (like Covid, which no one saw coming).

However, AI-generated spam will get much worse, and AI-generated content will become much more pervasive. Media companies and spammers (as if there is a meaningful distinction between the two anymore) alike will increasingly rely on machine-generated content, such as for articles and spam tweets. AI-generated text is usually clunky, overly formal, and otherwise obvious to those who know what to look for, but for non-discriminating readers it’s good enough to get the job done and saves costs by not needing as many staff writers.

At the same time, subscriptions and readership for top human writers will keep growing, like on Substack and Twitter. There will always be a huge premium and demand for top talent (IQ will keep being important and a filter, among many, for who succeeds or fails at life despite fears of AI making white-collar jobs obsolete). Lawyers, consultants, and doctors will not be rendered destitute due to AI.

4. The Israeli–Palestinian conflict will keep going on, but without any escalation like seen in October. Like Ukraine-Russia, which similarly started with a bang, it will become background noise. Israel will keep pressure on the region until the Hamas leadership is gone, and cries by left-twitter and the always-ineffectual international community about alleged human rights abuses will be ignored. The only opinion that matters about Israel is the US leadership–what the rest of the world thinks is inconsequential.

5. The college wars will die down too, but another college president will resign due to allegations of plagiarism or antisemitism. This is analogous to the many restorations of Christian institutions during history, like the English Reformation or the Second Vatican Council. Or Hollywood and ‘#MeToo’. When institutions become too bloated or decadent, they undergo occasional shake-ups like seen now with Harvard and other elite colleges. I predict however Harvard’s reputation will not be hurt by this, and things will return to normal.

[0] This is not to dismiss inflation entirely. Food inflation, especially shrinkflation and tip-inflation, are still a problem and will get worse. Including shrinkflation, tips, obsolescence, and other various hidden or subtle forms of inflation, the actual inflation rate for food may be as high as 30-percent/year, well in excess of CPI. But in terms of CPI, which as critics note excludes a lot of things, the inflation situation has improved.

[1] The closest was an April 2022 video (https://www.youtube.com/watch?v=C6nAxiym9oc) about yield farming being a scam. But he failed to implicate the FTX exchange of having a shortfall or SBF being a fraud. He missed the link between FTX and Alameda. Or the link between Alameda and the FTT token. Or Binance and FTT.