Thursday, January 7, 2016

Credit Bubble Stocks 2016 Reader Prediction Contest: Probability Time

Credit Bubble Stocks has compiled the most interesting potential events submitted by readers into a master list of two dozen.

  1. Ten year Treasuries trade at a yield below 1.5%.
  2. Ten year Treasuries trade at a yield above 3.5%.
  3. At any time, the two year Treasury yields more than the ten year Treasury.
  4. EURUSD trades at parity.
  5. The S&P 500 trades below the low of 1820.66 from October 15, 2014.
  6. The S&P 500 trades above the high of 2134.72 from May 20, 2015.
  7. Gold trades below $1,000/oz.
  8. Gold trades above $2,000/oz.
  9. Spot crude oil ($WTIC) trades below $30.
  10. Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
  11. Donald Trump is elected President.
  12. Republicans retain the House of Representatives and Senate.
  13. Any of the following lose power (resign, deposed, defeated, killed): Kim Jong Un, Angela Merkel, Saudi royal family.
  14. A nuclear weapon is used in warfare or terrorism.
  15. Any of the following are indicted: Aubrey McClendon, Tom Ward, Hillary Clinton, J Michael Pearson.
  16. Any of the following leave the asset management business (retirement, death, switching to family office): Bill Gross, Bill Ackman, Bill Miller, David Einhorn, John Hussman.
  17. John Hussman's HSGFX fund is positive for the year (including dividends) starting January 1.
  18. Any of these four Carl Icahn holdings that are junk credits go bankrupt: CHK, NAV, RIG, SSE
  19. Chipotle Mexican Grill share price revisits 2012 levels by trading below $300.
  20. No street legal, fully autonomous (“self-driving” from A to B based on address input alone) car is available for sale in the United States in 2016.
  21. A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).
  22. The BofA Merrill Lynch US Corporate BBB Effective Yield© exceeds 5%.
  23. A current venture capital “unicorn” (most recent financing round valued at >$1B as of Jan 1) liquidates or sells for less than $250 million (not counting Gilt Groupe).
  24. For the first time since 2005, a hurricane of Category 3 or greater (at time of landfall) makes landfall in the continental U.S.
Now, everyone can take the master list and give a probability estimate for each event. You can either submit your probabilities via email or leave them in the comments below (in which case you need to leave them as a logged in user).

At the end of the year, the contest is scored. We add up your probability estimates for each event that happens. We subtract your probability estimates for each event that doesn't happen. The net is your score.

14 comments:

innerscorecard said...

Great contest format. Really punishes fuzzy thinking. So here is my fuzzy thinking:

5% - Ten year Treasuries trade at a yield below 1.5%.
5% - Ten year Treasuries trade at a yield above 3.5%.
10% - At any time, the two year Treasury yields more than the ten year Treasury.
75% - EURUSD trades at parity.
51% - The S&P 500 trades below the low of 1820.66 from October 15, 2014.
49% - The S&P 500 trades above the high of 2134.72 from May 20, 2015.
20% - Gold trades below $1,000/oz.
5% - Gold trades above $2,000/oz.
80% - Spot crude oil ($WTIC) trades below $30.
10% - Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
50% - Donald Trump is elected President.
45% - Republicans retain the House of Representatives and Senate.
60% - Any of the following lose power (resign, deposed, defeated, killed): Kim Jong Un, Angela Merkel, Saudi royal family.
1% - A nuclear weapon is used in warfare or terrorism.
15% - Any of the following are indicted: Aubrey McClendon, Tom Ward, Hillary Clinton, J Michael Pearson.
90% - Any of the following leave the asset management business (retirement, death, switching to family office): Bill Gross, Bill Ackman, Bill Miller, David Einhorn, John Hussman.
50% - John Hussman's HSGFX fund is positive for the year (including dividends) starting January 1.
50% - Any of these four Carl Icahn holdings that are junk credits go bankrupt: CHK, NAV, RIG, SSE
30% - Chipotle Mexican Grill share price revisits 2012 levels by trading below $300.
95% - No street legal, fully autonomous (“self-driving” from A to B based on address input alone) car is available for sale in the United States in 2016.
50% - A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).
40% - The BofA Merrill Lynch US Corporate BBB Effective Yield© exceeds 5%.
65% - A current venture capital “unicorn” (most recent financing round valued at >$1B as of Jan 1) liquidates or sells for less than $250 million (not counting Gilt Groupe).
50% - For the first time since 2005, a hurricane of Category 3 or greater (at time of landfall) makes landfall in the continental U.S.

CP said...

Note: apparently Hurricane Rita was a Cat 3 when it made landfall in 2008:

https://en.wikipedia.org/wiki/Hurricane_Rita

Admiral MPD said...

40%: 1. Ten year Treasuries trade at a yield below 1.5%.
10: 2. Ten year Treasuries trade at a yield above 3.5%.
20: 3. At any time, the two year Treasury yields more than the ten year Treasury.
50%: 4. EURUSD trades at parity.
95%: 5. The S&P 500 trades below the low of 1820.66 from October 15, 2014.
20%: 6. The S&P 500 trades above the high of 2134.72 from May 20, 2015.
50%: 7. Gold trades below $1,000/oz.
2%: 8. Gold trades above $2,000/oz.
85%: 9. Spot crude oil ($WTIC) trades below $30.
15%: 10. Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
2%: 11. Donald Trump is elected President.
50%: 12. Republicans retain the House of Representatives and Senate.
40%: 13. Any of the following lose power (resign, deposed, defeated, killed): Kim Jong Un, Angela Merkel, Saudi royal family.
2%: 14. A nuclear weapon is used in warfare or terrorism.
15%: 15. Any of the following are indicted: Aubrey McClendon, Tom Ward, Hillary Clinton, J Michael Pearson.
10%: 16. Any of the following leave the asset management business (retirement, death, switching to family office): Bill Gross, Bill Ackman, Bill Miller, David Einhorn, John Hussman.
2%: 17. John Hussman's HSGFX fund is positive for the year (including dividends) starting January 1.
60%: 18. Any of these four Carl Icahn holdings that are junk credits go bankrupt: CHK, NAV, RIG, SSE
60%: 19. Chipotle Mexican Grill share price revisits 2012 levels by trading below $300.
100%: 20. No street legal, fully autonomous (“self-driving” from A to B based on address input alone) car is available for sale in the United States in 2016.
80%: 21. A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).
85%: 22. The BofA Merrill Lynch US Corporate BBB Effective Yield© exceeds 5%.
30%: 23. A current venture capital “unicorn” (most recent financing round valued at >$1B as of Jan 1) liquidates or sells for less than $250 million (not counting Gilt Groupe).
40%: 24. For the first time since 2005, a hurricane of Category 3 or greater (at time of landfall) makes landfall in the continental U.S.

Anonymous said...


Some bold predictions. Will be fun to look at a year from now.

10% - Ten year Treasuries trade at a yield below 1.5%.
10% - Ten year Treasuries trade at a yield above 3.5%.
45% - At any time, the two year Treasury yields more than the ten year Treasury.
40% - EURUSD trades at parity.
100% - The S&P 500 trades below the low of 1820.66 from October 15, 2014.
15% - The S&P 500 trades above the high of 2134.72 from May 20, 2015.
25% - Gold trades below $1,000/oz.
5% - Gold trades above $2,000/oz.
100% - Spot crude oil ($WTIC) trades below $30.
5% - Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
50% - Donald Trump is elected President.
80% - Republicans retain the House of Representatives and Senate.
5% - Any of the following lose power (resign, deposed, defeated, killed): Kim Jong Un, Angela Merkel, Saudi royal family.
1% - A nuclear weapon is used in warfare or terrorism.
95% - Any of the following are indicted: Aubrey McClendon, Tom Ward, Hillary Clinton, J Michael Pearson.
60% - Any of the following leave the asset management business (retirement, death, switching to family office): Bill Gross, Bill Ackman, Bill Miller, David Einhorn, John Hussman.
50% - John Hussman's HSGFX fund is positive for the year (including dividends) starting January 1.
95% - Any of these four Carl Icahn holdings that are junk credits go bankrupt: CHK, NAV, RIG, SSE
45% - Chipotle Mexican Grill share price revisits 2012 levels by trading below $300.
100% - No street legal, fully autonomous (“self-driving” from A to B based on address input alone) car is available for sale in the United States in 2016.
85% - A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).
75% - The BofA Merrill Lynch US Corporate BBB Effective Yield© exceeds 5%.
90% - A current venture capital “unicorn” (most recent financing round valued at >$1B as of Jan 1) liquidates or sells for less than $250 million (not counting Gilt Groupe).
90% - For the first time since 2005, a hurricane of Category 3 or greater (at time of landfall) makes landfall in the continental U.S.

-John

bjdubbs said...

After totally nailing my XPO prediction in 2015, I'm back for more triumphant predictions.


10% - Ten year Treasuries trade at a yield below 1.5%.
5% - Ten year Treasuries trade at a yield above 3.5%.
5% - At any time, the two year Treasury yields more than the ten year Treasury.
50% - EURUSD trades at parity.
30% - The S&P 500 trades below the low of 1820.66 from October 15, 2014.
80% - The S&P 500 trades above the high of 2134.72 from May 20, 2015.
80% - Gold trades below $1,000/oz.
0% - Gold trades above $2,000/oz.
20% - Spot crude oil ($WTIC) trades below $30.
30% - Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
40% - Donald Trump is elected President.
70% - Republicans retain the House of Representatives and Senate.
30% - Any of the following lose power (resign, deposed, defeated, killed): Kim Jong Un, Angela Merkel, Saudi royal family.
0% - A nuclear weapon is used in warfare or terrorism.
10% - Any of the following are indicted: Aubrey McClendon, Tom Ward, Hillary Clinton, J Michael Pearson.
10% - Any of the following leave the asset management business (retirement, death, switching to family office): Bill Gross, Bill Ackman, Bill Miller, David Einhorn, John Hussman.
20% - John Hussman's HSGFX fund is positive for the year (including dividends) starting January 1.
40% - Any of these four Carl Icahn holdings that are junk credits go bankrupt: CHK, NAV, RIG, SSE
10% - Chipotle Mexican Grill share price revisits 2012 levels by trading below $300.
100% - No street legal, fully autonomous (“self-driving” from A to B based on address input alone) car is available for sale in the United States in 2016.
40% - A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).
50% - The BofA Merrill Lynch US Corporate BBB exceeds 5%.
85% - A current venture capital “unicorn” (most recent financing round valued at >$1B as of Jan 1) liquidates or sells for less than $250 million (not counting Gilt Groupe).
20% - For the first time since 2005, a hurricane of Category 3 or greater (at time of landfall) makes landfall in the continental U.S.

Unknown said...
This comment has been removed by the author.
Taylor Conant said...

45% Ten year Treasuries trade at a yield below 1.5%.
5% Ten year Treasuries trade at a yield above 3.5%.
0% At any time, the two year Treasury yields more than the ten year Treasury.
35% EURUSD trades at parity.
75% The S&P 500 trades below the low of 1820.66 from October 15, 2014.
5% The S&P 500 trades above the high of 2134.72 from May 20, 2015.
25% Gold trades below $1,000/oz.
25% Gold trades above $2,000/oz.
30% Spot crude oil ($WTIC) trades below $30.
25% Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
20% Donald Trump is elected President.
35% Republicans retain the House of Representatives and Senate.
10% Any of the following lose power (resign, deposed, defeated, killed): Kim Jong Un, Angela Merkel, Saudi royal family.
0% A nuclear weapon is used in warfare or terrorism.
0% Any of the following are indicted: Aubrey McClendon, Tom Ward, Hillary Clinton, J Michael Pearson.
5% Any of the following leave the asset management business (retirement, death, switching to family office): Bill Gross, Bill Ackman, Bill Miller, David Einhorn, John Hussman.
25% John Hussman's HSGFX fund is positive for the year (including dividends) starting January 1.
25% Any of these four Carl Icahn holdings that are junk credits go bankrupt: CHK, NAV, RIG, SSE
80% Chipotle Mexican Grill share price revisits 2012 levels by trading below $300.
100% No street legal, fully autonomous (“self-driving” from A to B based on address input alone) car is available for sale in the United States in 2016.
60% A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).
50% The BofA Merrill Lynch US Corporate BBB Effective Yield© exceeds 5%.
15% A current venture capital “unicorn” (most recent financing round valued at >$1B as of Jan 1) liquidates or sells for less than $250 million (not counting Gilt Groupe).
0% ( http://www.aoml.noaa.gov/hrd/Landsea/elnino/ ) For the first time since 2005, a hurricane of Category 3 or greater (at time of landfall) makes landfall in the continental U.S.

Unknown said...

A basket with one share each of Facebook, Apple, Netflix, and Alphabet (Google) has a negative return (including dividends).

Isn't a share of Google worth much more than the other three put together?

Unknown said...

I don't have strong opinions about any of these, but here are a few guesses:

30% - Ten year Treasuries trade at a yield below 1.5%
10% - Ten year Treasuries trade at a yield above 3.5%.
10% - At any time, the two year Treasury yields more than the ten year Treasury.
25% - EURUSD trades at parity.
3% - Gold trades above $2,000/oz.
33% - Spot crude oil ($WTIC) trades below $30.
5% - Spot crude oil ($WTIC) trades above the May 6, 2015 high of $62.58.
1% - A nuclear weapon is used in warfare or terrorism.
33% - The BofA Merrill Lynch US Corporate BBB Effective Yield© exceeds 5%.

CP said...

James, that's only 9 of the 24. What about the other 15?

Unknown said...

I don't know enough about the others to have any opinions about them, e.g. I don't follow politics and don't follow most of the specific stocks the contest mentions.

innerscorecard said...

Seems to be the whole point of the competition, though. Forcing you to have precise opinions on things where you cannot possibly have the expert opinion.

A rigged competition.

But that's why it's fun.

Taylor Conant said...

Wow, this one is coming up fast!

"Oil prices dropped below $32 a barrel Monday for the first time in 12 years as a persistent global glut of crude continues to weigh on the market. "

Colin Lee said...

1> 20%
2> 15%
3> 15%
4> 70%
5> 70%
6> 20%
7> 80%
8> 5%
9> 65%
10> 25%
11> 5%
12> 10%
13> 5%
14> 12%
15> 65%
16> 70%
17> 20%
18> 80%
19> 75%
20> 95%
21> 55%
22> 65%
23> 85%
24> 20%