Byron Wien’s Surprise Predictions for 2013
Saying earnings are decelerating and most don’t recognize it, along with anything housing related being a winner, Byron Wien discussed his 2013 surprise predictions on CNBC’s morning show “Squawk Box” today (see videos below).
Wien’s 10th surprise is that Europe’s structural problems remain unsolved. He doesn’t expect much change in the dollar vs. euro relationship. He also sees European stock indexes down 10%.
The 9th surprise — Japanese stocks have a good year. The yen declines to 100 versus the dollar.
The #8 surprise is that inflation remains tame and gold hits $1,900 per ounce.
From a Blackstone Advisory Partners press release [link]:
Number 7: Climate change contributes to another year of crop failures, resulting in grain and livestock prices rising significantly. Demand for grains in developing economies continues to increase as the standard of living rises. More investors focus on commodities as an investment opportunity and increase their allocation to this asset class. Corn rises to $8 a bushel, wheat to $9 a bushel and cattle to $1.50 a pound.
Number 6 on Wien’s list is that China’s leaders make efforts to root out corruption and Chinese A shares appreciate 20% in the coming year.
The number 5 surprise is that due to the increasing Hispanic population Republicans reverse their stance on immigration policy.
Number 4 on Wien’s list is that financial stocks have a rough year and reverse the gains made in 2012. “The reasoning is that there is too much capacity in financial services, too many banks, too many brokerage firms,” Wien said. He added that the people who work there are paid too much and the return on equity is low and it’s just not a good business.
The 3rd suprise is the Democrats sponsor a vigorous program to make the U. S. energy independent by 2020.
From the Blackstone Advisory Partners press release:
2. A profit margin squeeze and limited revenue growth cause 2013 earnings for the Standard & Poor’s 500 to decline below $100, disappointing investors. The S&P 500 trades below 1300. Companies complain of limited pricing power in a slow, highly competitive world economic environment.
Wien’s final surprise (#1) is that sometime this year Iran will have sufficient enriched material to make a nuclear weapon.
Wien was quite accurate in his 2012 predictions [link]. By his own estimation he got six out of 10 correct.