1. Nasdaq
and S&P will drop 40-50% from its recent peak over the next few years. The
other global markets will also drop a similar amount. Maybe the bear market
could eventually end around the 2025 inauguration. But if the US falls into a
civil war kind of panic and reality, hell will be in sight.
5/25/2023 Update: Nasdaq
already dropped by more than 35% and S&P by more than 25% at some point in
2022. They are in a bounce right now. If this bounce last until at least the
end of Q3 2023, or even the end of Q1 2024, Nasdaq could eventually drop by
about 70% and S&P by about 50%.
1/4/2024 Update: 2023
turned out to be exactly as I expected on January 22, 2023, with a run up to
potentially Q1 2024, and large swings. My last view was a comment on October 6,
2023 to a good friend in the industry: “today
should be the start of a bounce that could last till early January in the best
case scenario.” We are approaching the final stage of the
bounce. January will definitely be pretty bad for equity. There is a
possibility of strong rebound in February and March but the market could also continue
to drop. We either have a very volatile fluctuating market for the rest of the
year, or a downtrend bear market in which Q2-Q4 will see negative equity
returns each quarter. The bear market case is more likely.
2. US is
likely to have a recession in late 2023 or 2024. The recession will be
relatively mild in terms of employment and output.
5/25/2023 Update: So far
the recession hasn’t come yet, as I predicted, despite of most everyone having
predicted the recession happening in 2022!
1/4/2024 Update: My
recession watch has finally started. But it could be that we won’t have recession
until the end of 2026 or even 2026. Note that for everyone else, this would be
their third recession watch from the start of 2022.
3. Some of
the current darling stocks will drop very substantially. For example, can you
imagine Tesla at around or below $200 again?
5/25/2023 Update: at the
adjusted prices, my prediction was that Tesla would have dropped to about $65.
Tesla has dropped to about $100 from more than $400 already, surprising most
people. I stand by the $65 target.
1/4/2024 Update: Ideally I
would short Tesla at $300. But it may not go back there before reaching around $65.
4. USD has
not peaked yet but is close to its peak. After peaking, it will fluctuate at a
high level for a couple years before a very significant leg down lasting many
years. So don’t bet that it will go down or go down soon.
5/25/2023 Update: USD
rallied by more than 15% in 2022, as I predicted, which surprised most people. It
has dropped a lot from the peak but I expect it to rally at least once more,
exactly as I have been predicting.
1/4/2024 Update: It is
another time that everyone wants to write off USD and predicts a cyclical drop
from here. But USD will surely have another run up this year, potentially
reaching the cycle high.
5. Gold will
slump from this level too but will get out of the slump before all the other
assets. The time of its bottom could be in 2023. It will likely have a strong
bull market from there, appreciating many times. Gold companies will take
longer to bottom, say another year after gold bottoms.
5/25/2023 Update: Gold has
dropped about 20% from 2000s to 1600s in 2022, as predicted, but has bounced to
close to the all time high in 2023. It will probably drop again to at least
1800s and maybe even 1600s before the long term rally.
6. US
housing bull market from 2011 is only about half done. It will go up slowly for
a few years and then up sharply for some more. So prepare for about another 10
years of US housing bull market and a price appreciation of a similar amount of
what we had since 2011.
5/25/2023 Update: US
housing market did not tank at all and let’s wait for its eventual sharp upturn
as predicted.
1/4/2024 Update: US
housing market is fluctuating while going up slowly, exactly as I predicted.
7. Chinese
housing market and stock market will hold up a bit better than the rest of the
world for a little longer. Just holding on there, unlikely to go beyond its
prior peaks. Then they will likely have a very serious slump that will not end
until say 5 years later.
5/25/2023 Update: Chinese
housing market and stock markets are fluctuating but haven’t gone beyond the
prior peaks as predicted. Let’s wait for their long term slumps.
1/4/2024 Update: The
serious and long term slump in Chinese housing and stock markets have started.
To drop to even the 2015 level, the housing prices need to drop by about 75%
and by at least 60% even in the first tier cities. I have always said to never consider
Chinese stocks until the index reaches at least the 2500 level.
8. Hong Kong
stock markets look extremely cheap to
most people but will drop at least 50% from its peak in 2018. It could drop 2/3
from that peak too in extreme cases. If it does drop that extremely, it is
probably wise to load up the assets if it still has a somewhat independent
future.
5/25/2023 Update: HK stock
market already dropped by more than 50% from its peak. After the current sharp
bounce, Hang Seng will drop by about 2/3 from that peak, which will be close to
11,000 to 12,000.
1/4/2024 Update: HK market
is marching to my predicted price target month by month.
9. Commodities
will also be among the last to slump in this cycle but it will have a pretty
bad slump too. It could be the most lucrative investment opportunity among all
for the many years after the slump is over.
5/25/2023 Update:
Commodities have been holding up very well but have started the slump somewhat.
The slump will continue and the buying opportunity hasn’t started until they
are much lower.
1/4/2024 Update: Some
commodities could bottom this year but commodity producers’ stocks may not.
10. Value
will significantly outperform growth in the next 10 years. Quant funds will do
relatively better too.
5/25/2023 Update: Value
has already outperformed growth significantly in 2022. This trend will continue
as predicted.
1/4/2024 Update: Value
will again outperform growth significantly in 2024.
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