Sunday, January 14, 2018

2018 Prediction Contest

This year we have 16 entrants in the prediction contest - not bad.

Below are the list of events and the average probability given by the group: 


Average
Happened in 2017 – Could It Happen Again?
* CMG trades below 300 at any point (not counting Jan 2nd and 3rd prices) 0.66
* A Cat 3 hurricane makes landfall in the continental U.S. 0.35
* Donald Trump is still President of the United States at the end of the year 0.91
* Bitcoin (@$15k) outperforms gold (@$1312) 0.43


Proposed for First Time in 2017 But Didn't Happen
* Buying equal dollar basket of SHLD, JWN, M, WMT outperforms Amazon 0.36
* The RMB/USD exchange rate goes over 8 at any point 0.27
* Global negative yielding debt goes under $1 trillion 0.39
* Either Buffett or Munger dies 0.27
* Someone besides Elizabeth Holmes is running Theranos at the end of year (resigns, court appointed receiver, trustee, etc) 0.35
* Another Supreme Court seat opens 0.27
* The 10 year Treasury yield falls below the July 6, 2016 low of 1.336% 0.14
* Any country leaves the Euro currency 0.14
* Another Decacorn (nonpublic company, peak valuation >$10 billion) is uncovered as a fraud 0.24
* Either VRX or SHLD enter bankruptcy 0.36
* Twitter is taken private 0.19
* The home mortgage interest deduction is eliminated from federal income tax 0.05


Didn't Happen in 2016 or 2017
* A Euro hits $1 US. (EURUSD parity) 0.19
* The 10 year Treasury yield rises above 3.5% 0.30
* Gold trades below $1000 0.18
* Hussman is up for the year including dividends (fund currently $7.13) 0.38
* Buying equal dollar basket of FB/AAPL/NFLX/GOOGL returns below 0% including dividends 0.40
* The BBB yield closes above 5% at any point 0.33
* A 2 year treasury yields more than 10 year treasury 0.36
* Gold trades above $2000 0.18
* One or more of Kim/Merkel/Saudis loses power (dies, resigns, or is deposed) 0.33
* One or more of Gross/Ackman/Miller/Hussman/Einhorn leaves the business (dies, fired, resigns, manages personal money only) 0.29
* A nuclear weapon is used in anger 0.05


New Ones – Political
* Republicans lose the Senate majority 0.44
* Republicans lose the House majority 0.43
* Joe Arpaio wins Arizona Senate Republican primary 0.35
* One or more of Donald Trump Jr or Jared Kushner is indicted 0.26
* One or more of Hillary Clinton or Huma Abedin is indicted 0.20
* Any TWO or more of the four major Trump cabinet figures (SoS, SoT, SoD, or AG) leaves position (for any reason) during the year 0.37
* More than 10,000 of the DACA people are deported 0.24
* US ends daylight savings time 0.06


New Ones – Cryptocurrency
* Cryptocurrency combined market cap on Coinmarketcap.com exceeds $1T 0.42
* The Flippening: Etherium market cap is greater than Bitcoin (core/classic) at any point during the year 0.36


New Ones – Financial Markets
* TSLA share price goes below 200 at any point 0.40
* The 90-day T-bill yield exceeds 2% 0.36
* The S&P goes below 2,500 0.50
* Any of the following countries' 10-year government bonds yield more than US: Germany, Italy, Canada. 0.44
* Total return of 1 year T-bill outperforms S&P 500, Nasdaq, and bitcoin. 0.35
* The CBOE Volatility Index ($VIX) exceeds 30 at any point during the year 0.43
* Federal Reserve raises target rate four times (in 25bps equivalents) in 2018 0.35
* Federal Reserve lowers target rate any times (in 25bps equivalents) in 2018 0.10
* The Vanguard Balanced Index Fund (VBINX) has a positive total return for the year 0.52
* Federal Reserve bank balance sheet total assets 0.40
* Worst performing S&P 500 sector over past 3 & 5 years (energy) outperforms (price) best performing (information technology). 0.54
* JPYUSD below 100 0.37
* US 30-year treasuries have a positive total return for the year; 0.45
* Crude (WTIC) ends the year above $62.58 0.60


New Ones – Happenings
* Another year with no commercial jet fatal plane incidents 0.61
* 2018 US vehicle sales are under 2017 vehicle sales (17.2 mm in '17, first decline since GFC) 0.57
* An earthquake of magnitude 7.5 or greater affects the continental United States 0.18
* A players' strike occurs in any of the four major US sports leagues (NBA, NFL, MLB, NHL) 0.13
* Philadelphia Eagles win the NFL Super Bowl 0.18
* A tropical cyclone makes the list of 10 wettest on the U.S. Mainland 0.18

It is also interesting to look at the events in the order of most likely to least likely:


Average
* Donald Trump is still President of the United States at the end of the year 0.91
* CMG trades below 300 at any point (not counting Jan 2nd and 3rd prices) 0.66
* Another year with no commercial jet fatal plane incidents 0.61
* Crude (WTIC) ends the year above $62.58 0.60
* 2018 US vehicle sales are under 2017 vehicle sales (17.2 mm in '17, first decline since GFC) 0.57
* Worst performing S&P 500 sector over past 3 & 5 years (energy) outperforms (price) best performing (information technology). 0.54
* The Vanguard Balanced Index Fund (VBINX) has a positive total return for the year 0.52
* The S&P goes below 2,500 0.50
* US 30-year treasuries have a positive total return for the year; 0.45
* Any of the following countries' 10-year government bonds yield more than US: Germany, Italy, Canada. 0.44
* Republicans lose the Senate majority 0.44
* The CBOE Volatility Index ($VIX) exceeds 30 at any point during the year 0.43
* Republicans lose the House majority 0.43
* Bitcoin (@$15k) outperforms gold (@$1312) 0.43
* Cryptocurrency combined market cap on Coinmarketcap.com exceeds $1T 0.42
* TSLA share price goes below 200 at any point 0.40
* Federal Reserve bank balance sheet total assets 0.40
* Buying equal dollar basket of FB/AAPL/NFLX/GOOGL returns below 0% including dividends 0.40
* Global negative yielding debt goes under $1 trillion 0.39
* Hussman is up for the year including dividends (fund currently $7.13) 0.38
* JPYUSD below 100 0.37
* Any TWO or more of the four major Trump cabinet figures (SoS, SoT, SoD, or AG) leaves position (for any reason) during the year 0.37
* A 2 year treasury yields more than 10 year treasury 0.36
* Buying equal dollar basket of SHLD, JWN, M, WMT outperforms Amazon 0.36
* The Flippening: Etherium market cap is greater than Bitcoin (core/classic) at any point during the year 0.36
* Either VRX or SHLD enter bankruptcy 0.36
* The 90-day T-bill yield exceeds 2% 0.36
* Someone besides Elizabeth Holmes is running Theranos at the end of year (resigns, court appointed receiver, trustee, etc) 0.35
* Joe Arpaio wins Arizona Senate Republican primary 0.35
* A Cat 3 hurricane makes landfall in the continental U.S. 0.35
* Total return of 1 year T-bill outperforms S&P 500, Nasdaq, and bitcoin. 0.35
* Federal Reserve raises target rate four times (in 25bps equivalents) in 2018 0.35
* The BBB yield closes above 5% at any point 0.33
* One or more of Kim/Merkel/Saudis loses power (dies, resigns, or is deposed) 0.33
* The 10 year Treasury yield rises above 3.5% 0.30
* One or more of Gross/Ackman/Miller/Hussman/Einhorn leaves the business (dies, fired, resigns, manages personal money only) 0.29
* The RMB/USD exchange rate goes over 8 at any point 0.27
* Either Buffett or Munger dies 0.27
* Another Supreme Court seat opens 0.27
* One or more of Donald Trump Jr or Jared Kushner is indicted 0.26
* Another Decacorn (nonpublic company, peak valuation >$10 billion) is uncovered as a fraud 0.24
* More than 10,000 of the DACA people are deported 0.24
* One or more of Hillary Clinton or Huma Abedin is indicted 0.20
* A Euro hits $1 US. (EURUSD parity) 0.19
* Twitter is taken private 0.19
* An earthquake of magnitude 7.5 or greater affects the continental United States 0.18
* Philadelphia Eagles win the NFL Super Bowl 0.18
* A tropical cyclone makes the list of 10 wettest on the U.S. Mainland 0.18
* Gold trades below $1000 0.18
* Gold trades above $2000 0.18
* Any country leaves the Euro currency 0.14
* The 10 year Treasury yield falls below the July 6, 2016 low of 1.336% 0.14
* A players' strike occurs in any of the four major US sports leagues (NBA, NFL, MLB, NHL) 0.13
* Federal Reserve lowers target rate any times (in 25bps equivalents) in 2018 0.10
* US ends daylight savings time 0.06
* The home mortgage interest deduction is eliminated from federal income tax 0.05
* A nuclear weapon is used in anger 0.05

And also from highest standard deviation among the 16 predictions (biggest disagreements) to lowest:


SD
* Cryptocurrency combined market cap on Coinmarketcap.com exceeds $1T 0.27
* Another year with no commercial jet fatal plane incidents 0.26
* A Cat 3 hurricane makes landfall in the continental U.S. 0.26
* Bitcoin (@$15k) outperforms gold (@$1312) 0.25
* Someone besides Elizabeth Holmes is running Theranos at the end of year (resigns, court appointed receiver, trustee, etc) 0.24
* Joe Arpaio wins Arizona Senate Republican primary 0.24
* A 2 year treasury yields more than 10 year treasury 0.23
* 2018 US vehicle sales are under 2017 vehicle sales (17.2 mm in '17, first decline since GFC) 0.22
* The 90-day T-bill yield exceeds 2% 0.22
* Either VRX or SHLD enter bankruptcy 0.22
* Buying equal dollar basket of FB/AAPL/NFLX/GOOGL returns below 0% including dividends 0.21
* Any TWO or more of the four major Trump cabinet figures (SoS, SoT, SoD, or AG) leaves position (for any reason) during the year 0.21
* The Flippening: Etherium market cap is greater than Bitcoin (core/classic) at any point during the year 0.21
* Buying equal dollar basket of SHLD, JWN, M, WMT outperforms Amazon 0.21
* Global negative yielding debt goes under $1 trillion 0.21
* CMG trades below 300 at any point (not counting Jan 2nd and 3rd prices) 0.21
* One or more of Kim/Merkel/Saudis loses power (dies, resigns, or is deposed) 0.20
* Worst performing S&P 500 sector over past 3 & 5 years (energy) outperforms (price) best performing (information technology). 0.20
* Federal Reserve bank balance sheet total assets 0.20
* One or more of Hillary Clinton or Huma Abedin is indicted 0.19
* Crude (WTIC) ends the year above $62.58 0.19
* Federal Reserve raises target rate four times (in 25bps equivalents) in 2018 0.19
* Another Decacorn (nonpublic company, peak valuation >$10 billion) is uncovered as a fraud 0.18
* One or more of Gross/Ackman/Miller/Hussman/Einhorn leaves the business (dies, fired, resigns, manages personal money only) 0.18
* Republicans lose the House majority 0.18
* Another Supreme Court seat opens 0.18
* An earthquake of magnitude 7.5 or greater affects the continental United States 0.18
* JPYUSD below 100 0.18
* Twitter is taken private 0.18
* More than 10,000 of the DACA people are deported 0.17
* Republicans lose the Senate majority 0.17
* A tropical cyclone makes the list of 10 wettest on the U.S. Mainland 0.17
* The RMB/USD exchange rate goes over 8 at any point 0.17
* US 30-year treasuries have a positive total return for the year; 0.17
* Total return of 1 year T-bill outperforms S&P 500, Nasdaq, and bitcoin. 0.17
* TSLA share price goes below 200 at any point 0.16
* The CBOE Volatility Index ($VIX) exceeds 30 at any point during the year 0.16
* The 10 year Treasury yield rises above 3.5% 0.16
* Philadelphia Eagles win the NFL Super Bowl 0.15
* The Vanguard Balanced Index Fund (VBINX) has a positive total return for the year 0.15
* One or more of Donald Trump Jr or Jared Kushner is indicted 0.15
* Any of the following countries' 10-year government bonds yield more than US: Germany, Italy, Canada. 0.15
* The BBB yield closes above 5% at any point 0.15
* The S&P goes below 2,500 0.15
* Any country leaves the Euro currency 0.13
* A Euro hits $1 US. (EURUSD parity) 0.13
* Hussman is up for the year including dividends (fund currently $7.13) 0.12
* Either Buffett or Munger dies 0.12
* Gold trades below $1000 0.10
* Federal Reserve lowers target rate any times (in 25bps equivalents) in 2018 0.09
* Gold trades above $2000 0.08
* A players' strike occurs in any of the four major US sports leagues (NBA, NFL, MLB, NHL) 0.08
* The 10 year Treasury yield falls below the July 6, 2016 low of 1.336% 0.07
* Donald Trump is still President of the United States at the end of the year 0.06
* US ends daylight savings time 0.05
* A nuclear weapon is used in anger 0.04
* The home mortgage interest deduction is eliminated from federal income tax 0.04

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