Around this time every year, we would start to see the prediction machine humming.
Talking heads on CNBC and all over Twitter start espousing what they think is going to happen going into the next year.
This year though, the prediction machine has been somewhat subdued.
To some degree it has been lost in the madness of COVID and the election but I just don’t feel like I am seeing the usual barrage of confident predictions.
Of course, that could have something to do with the fact that I rarely have the TV on in the office any more…
But even the internet does not seem as loud and prediction filled as 2020 comes to a close.
I think the fact that absolutely nobody predicted what happened in 2020 has led to fear among the machine. The unpredictability of this year is keeping the pundits quiet.
A 40% decline followed by a decade’s worth of technology adoption being jammed into a few months was not foreseeable.
Now, there are some predictions being made, but only among the brokerage firms that have to. And trust me they don’t want to.
The mutual fund companies have also gotten their predictions and guidance for 2021 out to the world as well.
Most of the predictions I am seeing so far are looking for the S&P 500 to close 2021 somewhere between 3600 and 4500.
There are the outliers that are either looking for the mother of all rallies or a devastating crash that throws the world back into the dark ages.
All of these are entertaining to read. Most of them are well thought out and make what seems to be a reasonable case for their thoughts on 2021…
Most of them are also pure crap.
Charlie Munger once talked about the market forecaster of today saying “There’s always been a market for people who pretend to know the future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts. It happens over and over and over.”
If you base your investment decisions on any of these predictions you deserve to lose whatever they end up costing you.
Predictions are marketing.
If the predictions are even close to right the sage will be celebrated as the great investor who knows where the market is going to go and can make you a fortune.
People will throw money at the lucky prognosticator.
Then, since markets are impossible to predict and they are merely a prediction lottery winner, they will never be even close to right again and investors will lose a lot of money.
I have seen this occur constantly since I started in the financial industry over 30 years ago. The academics and actual superstar investors will tell us over and over again that markets cannot be predicted.
We all nod wisely and then follow the “head lemming” over the prediction cliff again.
We want someone to tell us exactly what to do so we can become rich in the stock market overnight, if not sooner.
New flashs – you cannot.
There is only one person in the history of the world that has been 100% accurate for more than two decades with his stock market forecast each and every year for more than 2 decades.
It is me.
Today, for the first time since last year around this time, I will share my predictions for stock prices as well as my expectations for the economy over the next year.
Here we go.
Next year on most weekdays the stock market will open at 9:30 and close at 4.
On days the NYSE has designated as Holidays the market will not open as usual.
Prices will fluctuate during the hours the market is open.
The fluctuations will be upwards in nature at times, and downward at others.
Some companies that are expected to be great will see their stock prices tumble instead during the year.
Some companies no one has ever heard of will have a spectacular rise at some point in the year.
Some hedge funds will blow up at some point in the year.
Some small fund no one has ever heard of will have an enormous year.
Some parts of the economy will do very well.
Others will not.
Congress will do something stupid.
There it is, my guaranteed to be accurate 2021 prediction.
If all of this doesn’t work out exactly as I suggest you can get back every penny you paid me for it.