Predictions for 2003 (1)
This will be a review of the predictions I made for 2002. And suffice to say, I really screwed them up.
The bold face text will have been my predictions for 2002, made on January 1, 2002.
Macroeconomics: Recession for the first half of 2002, and the second half of 2002 will see this so-called "economic recovery".
Hmm, depends on what your definition of a recovery is. According to bea.gov , we saw positive GDP growth in the first three quarters of 2002, which means that we were never in a recession.
Short term interest rates will go from 1.75% to 4.00% at the end of the year. Long bond (30 year) rates will head up from about 5.4% to 7-8%.
Wrong! If I said "4.00% to 1.75%", this might have been acceptable, but I was totally off the ball on that one. Short term rates are now 1.25%, and the long bond is 4.87% as I write this.
Inflation should be about 3-4%, as measured by CPI/PPI.
Wrong! It's roughly 2.2% for the CPI, and the PPI was roughly flat.
The Canadian dollar will go under US$0.60 per CDN$1.00. The Euro will go nowhere.
Wrong and wrong. CDN$ reached a low at 61.92 cents US, and the Euro is up about 15% on the US currency (from about 90 cents per Euro to 1.03 cents per Euro today!)
The Japanese economy will continue remaining the piece of garbage it currently is. The Yen will continue its downslide, and the extreme debt to GDP ratio that the Japanese government has put themselves into will eventually catch up to the Japanese people. I don't think an economic collapse will occur this year, but at their current trend, they are looking in severe trouble.
Right about the Japanese economy, and wrong about the Yen. The yen is up from about 132 Yen/USD to about 120 today.
Energy prices will remain steady, oil at around $20/barrel. This will be interrupted by price spikes due to tension (if not all outright war) in Saudi Arabia, and Iran.
Boy, did I ever screw up this one! Oil is up about 50%, and the primary source of tension in the middle east originated in Israel, and Iraq!
The real estate market *may* collapse in 2002. I'm not entirely sure, but rising interest rates will kill the refinancing markets, and should cause drops in property values.
Wrong! Real estate is still (relatively) healthy, and rates have remained low.
Osama bin Laden is never found, or seen again. Presumably, he is dead.
This can never be verified, but I think this one turned out to be correct.
The price of a 3.5GHz Intel processor will be US$300 at the end of 2002.
Wrong! The fastest thing I can pick up at a computer store is an Intel Pentium 4, 3.0GHz, for CDN$1019, or roughly US$650. This, incidentially, means that Moore's law didn't hold for 2002.
Hydrogen fuel cell technology will STILL be nowhere. Sales of hybird-electric vehicles will be tepid. For that matter, sales of cars will be decreasing, simply because the zero percent financing in the later half of 2001 will have cannabalized car sales for 2002.
Right, right, and wrong.
About the hydrogen fuel cells: Ballard (BLDP) got roasted 60% in the stock market this year, and I don't see any commercially viable technology based on Hydrogen-powered products.
Hybrid-electric vehicles: Sales data:
ott.doe.gov
Compare this to 17.5 million vehicles sold in the USA for 2001. I don't have a link to the vehicle sales for 2002, but GM and Ford are still doing brisk business with their zero-interest rate policy.
Microsoft will still be duking it out with Sony in the console wars. Nintendo will survive with their classic game developers, and their niche audience of young people.
I'd say this one is a "yes". Although Nintendo is looking in pretty sad shape, they still 'survived'. (what a lofty prediction).
Airline service will continue to be as shitty as usual, and even though the perception of security will continue to increase, there will still be stories of idiots brining guns and other nasty items on board. Eventually the federal government will get so pissed off at the airline's inept attempt at security, so that they'll start levying some significant punishment for non-compliances.
Shitty as usual service: Yes.
Perception of security: Yes, there have been numerous stories about things being brought about aircraft that have evaded security.
Feds getting tough on airlines: Not really, or at least I haven't heard anything significant to this degree, although one could argue that not giving UAL a loan guarantee might have been because that their business was fundamentally bankrupt.
Republicans get the senate in 2002.
Probably the longest shot prediction I made that actually turned out to be true.
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Index/Stock predictions I made:
^DJX: 11000
^IXIC: 2450
^NDX/QQQ: 1950/48
^SPX: 1320
As of Christmas, 2002:
^DJX: 8448 (off by 23%)
^IXIC: 1372 (off by 44%)
^NDX/QQQ: 1023/25.35 (off by 48%)
^SPX: 892 (off by 32%).
I'd consider that a series of fairly disasterous predictions!!
Stock predictions:
AFCI at 17.67
CEGE at 23.24
MIR at 16.01
MTP (now TAA) at 5.75
SNDK at 14.40
At Christmas 2002, they are:
AFCI: 16.82 (down 5%)
CEGE: 12.15 (down 48%)
MIR: 1.72 (down 89%)
MTP (now TAA): 0.32 (down 94%!!)
SNDK: 22.15 (up 54%).
If I put all five stocks in an equal-weighted basket at the end of 2001, the net performance would have been -36.4%.
Wow, I really screwed up that one eh? I'm just glad that these are virtual dollars I'm playing around with in this portfolio.
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Now, after a wonderful record of predicting things, who in their right mind would want to see my picks for 2003 (for contrarian purposes of course?).. I'll have a post of what I see for 2003 between now and the end of the year. |
