My grandparents used to have a vintage, “manual” clock proudly displayed in their living room. The ornate wooden structure, beautiful detail work, and grand lettering on the clock face provided a striking comparison to the bland digital and analog clocks that are the modern standard. 

 

Both of my grandparents immigrated from Europe, so it was clear to me as a young boy that this device had come from a distant land and time. 

 

However, this clock had another interesting feature: it did not have a pendulum that drove the clock mechanism. 

Instead, it had a small series of lead weights that were attached to chains. Every day someone would have to pull the chains to raise the weights. Then the weights would pull down with gravity and drive the clock gearing to move the hands on the clock face.

If no one reset the chain weights, the time-keeping movements would run out of gravity-powered energy and grind to a halt, rendering the clock functionally worthless.

A Broken Clock is Right Twice A Day

Predictions are everywhere in the financial industry. Consume any form of media and the talking heads forecasting an imminent boom or bust is constant. 

DEBT! TAXES! CURRENCIES! RATE HIKES! BUBBLES! MARKET CRASHES!

The irony of the Financial Prediction Industrial Complex (FPIC) is: 

Most of these predictions are completely useless!

For a prediction to be “correct” you have to be right in direction and right in timing. 

For example, to capitalize on a pending market crash, you have to be correct in predicting the actual correction AND when it will happen. If the timing is wrong, the prediction is null and void.  

This is where the clock analogy applies: A broken clock is worthless for telling time but it is certainly right twice a day.

Here are some recent examples of predictions that missed the mark.

This quip surely applies:

“No one knows anything.”

 -William Goldman

UnPredictions for 2022

So in this spirit of humility, I have facetiously labeled my predictions for this coming year: UnPredictions. 

 

Though the subject matter is serious, these predictions are meant to be fun and lighthearted.

 

At the end of the year, I intend to come back and rate my success at predicting the future!

Big Trends Will Continue

  • Cryptocurrency will be further embraced by mainstream consumers, leading to more retail financial products and adoption as an asset class.

  • Work Changes brought about by Covid and improvement in digital technology, such as work from home and distributed teams, will be further adopted by employers and employees. 

  • The Great Resignation, where record numbers of employees leave their jobs, will continue.

  • Consumer Demand remains pent up and ready to be unleashed on certain sectors, particularly tourism and secondary/luxury goods industries like vacation homes, boats, and automobiles. 

Covid 

  • Corporations will err to the side of caution in regards to supply chain capital investments and be slow to hire employees to meet accelerating demand. See above.

  • Summer 2022 will be “Normal”. This may be wishful thinking, but I believe the summer of 2022 will be as “open” or more “open” than the previous year.

  • Global Tourism Will Boom after worldwide governments soften their covid restrictions on border crossings and international travel. 

Markets and Economics

  • Public Markets will correct downwards into bear market territory at some point, but not this year! This bull market will continue upwards on the back of sustained consumer spending.

  • Inflation Will Continue Rising while being driven by supply and demand imbalances in multiple consumer sectors.

  • Interest Rates will be raised this year by the Fed to cool off the economy and nip rising inflation.

  • The Housing Market will keep charging upwards in desirable places to live. Even if interest rates rise, the large supply and demand imbalance remains. 

Personal

  • Bands that have not toured since pre-Covid will venture out on the road to support an avalanche of new music written and recorded during the pandemic. Mumford & Sons, please come to Washington DC!

  • Football Teams that I cheer for, will match or beat their accomplishments in 2021. Michigan will repeat as B1G Champs, Navy will beat Army, and the Detroit Lions will actually look like an NFL team (the bar is low).