Sunday, July 12, 2015

How Are the Credit Bubble Stocks 2015 Predictions Doing?

In December, we asked the readership to give five predictions at 80% confidence level, meaning four should turn out to be right and one wrong - if the reader is well-calibrated. I thought I'd take a quick look to see if anyone is out of the race already (yes) and if there are any front runners.

"Louisiana" has one of the most interesting early successes so far. He said, "a breakout populist candidate will emerge in the Republican primary. To quantify: not currently polling above 5%, for whom immigration and jobs will be a centerpiece issue." Trump!

"Panda" has 3.5/6 which is looking pretty good, "Blue Devil's" $90 oil by midyear prediction is already dead wrong, hopefully "Admiral" didn't put real money on the National Bank of Greece preferred stock (!), "Memphis" is in the running, "Zoolander" is too, "Rothko" is middle of pack as is "Boston" and "Stagflationary Mark". "Hollywood" isn't looking great, nor are "bjdubbs," "jHurt", "Allegheny", "Gotham" or "whydibuy".

Recall your host's predictions:

  • Quicksilver Resources, RadioShack, Walter Energy, and Molycorp will all restructure (dilutive out of court exchanges count). Only Walter hasn't so far.
  • U.S. ten year note yield will not exceed three percent. Good so far.
  • Silver goes below $15/oz. Dipped below $15 in early June.
  • Spot WTI does not exceed $90/bbl. Not even close.
  • U.S. thirty year yield hits 2.5%. Went below 2.5% in the first week of January.
It's looking like we'll get to keep our bottle of scotch...


CP said...

I suppose I should say that, even though the RSXJ prediction by "Texas" wasn't a valid entry, it has rallied since December:

CP said...

The worst so far was the late entry:

So far all five of those are on track to be wrong.

But the year ain't over yet!

CP said...

Speaking of NATO though:

"[N]ext time we think about military intervention in a foreign country that hasn’t attacked us, it might be worth running a thought experiment to work out at exactly which moment, in the many internecine conflicts that have afflicted the British Isles, our forebears would have most benefited from the arrival of 3500 troops and eight helicopters, and for which 'side' those troops would have fought."

Stagflationary Mark said...

I've had one failure so far. The 30-year treasury breached the 3% level. Good news for me if it continues, for I have a large TIPS bond maturing early next year and I'd like to reinvest. No complaints!

The Fed still hasn't raised rates, unlike many would have guessed. I'm no more confident now than I was in December that I'll ultimately get that one right though. Might be a nail biter. In any event, I am amused by their justifiable procrastination.

US department store sales are trending below last year.

US Exports to China are trending below last year.

Shafowstats still hasn't raised their annual subscription price, which is extremely odd given hyperinflation that they've claim should have happened already. ;)

As it stands now, 3 to 4 right out of 5 seems plenty doable by year's end. 4 would be perfect of course, given 80% confidence. :)

Knock on wood. Still 6 months to go.

Stagflationary Mark said...

I'm more than 80% confident that I should have proofread the "shafowstats" and "they've claim" paragraph before I posted my comment, lol. Sigh.

James said...

I'm reading The Alchemy of Finance, and it's interesting to see how many predictions Soros got wrong-- pretty much all of them. The contest entrants are in good company.

CP said...

Ah, I was thinking of reading/reviewing Gyorgy's book, but I tossed it instead.

Can you give us some notes when you're done?

James said...

Can you give us some notes when you're done?

I'll do a post with some excerpts. I think the key to Soros's success was realizing the importance of positive feedback loops and understanding their power to take prices far above or below fair value. The book gives examples from his career, like Teledyne using overpriced stock to make accretive aquisitions and REITs increasing NAV by doing secondaries above book value. When he talks about "reflexivity" he's really talking about feedback loops.