Predictions

Three trading days before year end, and predictions for next year are starting to come out. Predictions are usually of low value, with the notable exception that allows you, the investor, to know what the consensus view is. Since investing is a zero sum game for the most part, betting on those areas where consensus might be wrong, provides big rewards. In the chart below you can see 25 predictions organized by theme: markets, economy, technology, geopolitics and everything else. Graphically, the higher the number of color circles behind the prediction, the higher the conviction behind it. Which tells us the consensus sees strength in the economy (blue circles), with AI and fiscal and monetary impulses supporting the new year. Consistent with that is a prediction for double digit returns for the S&P500, combined with a steepening of the treasury yield curve, and continued strength on gold, which perhaps implies an inflationary environment. Overall, it appears big banks are betting on continuation, with economic expansion and good returns across the board. What’s your prediction?

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