#175 - 2023 Predictions For Markets, Sports and Politics
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Biggest Loser of 2022
Quick look back on 2022
What to expect in 2023
Gold or Bitcoin?
UCP vs. NDP
Ai in Health care and Search
Recommendations and Predictions
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👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
What happened in 2022 is the bottom fell out of the capital markets and the startup and tech sector more broadly. And Commodities made a name for themselves.
A big problem with bubbles is the reflexive association between wealth and wisdom, so a bunch of crazy ideas are taken seriously because a temporarily rich person said it. Insert Elon.
2022 was the 7th worst year for stocks in history:
Such an awful performance happened only twice in the past 20 years (stocks fell 38% in 2008 and 23% in 2002). And before that? You’d have to go back to 1974 and 1937.
The common phrase is that the stock market goes up like an escalator (slowly and gradually) and down like an elevator (less often, but much faster).
The S&P benchmark returned an average 10% annual return from 1926 to 2021, and 74% of the years were positive. However, stocks are extremely volatile. They make us put up with years like 2022 every decade or so.
Bull Markets: 2.7 years, +112% gain.
Bear Markets: 10 months, -36% loss.
Investors try to avoid the bear.
They should be focused on not missing the bull.
The stock market is often referred to as forward-looking because it is based on the expectations of future economic performance. So the general consensus is that business fundamentals will be ugly in 2023, with a potential recession looming.
However, as best put by Peter Lynch:
"This one is different," is the doomsayer's litany, and, in fact, every recession is different, but that doesn't mean it's going to ruin us.
Unless you own a crystal ball and can predict the future (I can’t), you need a sustainable and repeatable process over many years and be prepared for a rollercoaster ride.
To benefit from the amazing wealth-creation machine that is the stock market, you need to make a lifelong commitment to it. It involves riding the ups and downs without interruption and letting the power of compound interest do its magic.
I believe that sometime in the first half of 2023, the central banks around the world will start backing off the tightening that they have been engaged in as inflation continues to ease and the economy continues to cool. Interest rates will level off in the first half of 2023 and I think there is a good chance of a “soft landing” or a very mild recession in 2023…
Conservatives Have a Millennial Problem
Recently, a Fascinating trend has evolved showing that Millennials aren't growing more conservative as they age.
Link here for the full article: https://enterprise-sharing.ft.com/error.../expired-link...
IF YOU DON'T PAY FOR THE FT:
What's going on?
A common response is "it’s things like homeownership that make people more conservative. Fix that, and they’ll come back". While there is certainly *some* truth to this, it’s not nearly as simple as people think.
In the UK, even among homeowners, Millennials are less conservative than previous generations and show no sign of following the old trend.
Of course, the simple difference in levels between those two charts matters, and by my calcs if Millennials owned homes at the same rate as boomers did at that age, they would be a couple of points more conservative, but only a couple. There are clearly deeper-lying problems.
(tho important to note, conservative parties should not just think of fixing housing affordability as a convenient hack for turning Millennials conservative — they should think of it as demonstrating that they care about this generation, and that might have a much bigger impact)
So while homeownership is playing a role, the underlying reasons are likely deeper and fuzzier. A useful framework for thinking about it is in terms of age, period, and cohort effects, a concept from public health analytics: https://www.publichealth.columbia.edu/.../age-period...
An age effect is something that affects all individuals are they age:
e.g the historical pattern of becoming more conservative as you grow older.
This can’t explain the Millennial problem, because they *aren’t* getting more conservative as they age.
A period effect is where an external factor impacts people of all ages simultaneously. Trussonomics was a class example, shifting all ages away from Tories. But that was a brief shock whereas we’re looking at a multi-year trend, and it can’t explain the same pattern in the US or Canada
So we’re left with a cohort effect: a difference that emerges among people who experience a common event at the same time.
When you consider that Millennials came of age in the aftermath of the global financial crisis, and entered their thirties with homes less affordable than ever, it starts to feel quite plausible that this context may have shaped this generation differently from its predecessors.
This is borne out in the data, too. Millennials in both the US, Canada, and the UK favor more left-wing economic policies than previous generations did at the same age. They’re much more in favor of redistribution from rich to poor.
You then have the culture war (of which Brexit was a perfect distillation), the pursuit of which has been undoubtedly successful for conservative parties over the last decade, but which may now come back to bite them.
Cultural war issues generally map very neatly onto education, so it should hardly be surprising that they go down badly with the most well-educated generation in history. The problem is, it may now prove difficult to undo that damage.
But it’s critical for conservative survival that they find a way to undo the damage because while the Millennial vote has been easy to dismiss due to lower turnout among young people, Millennials aren’t 25 forever. Many are now in their 40s. And people in their 40s vote.
Parties on the right used to rely on people aging into conservatism. Millennials are different, likely due to the following 2 things:
Coming of age during econ and home-ownership crises -> forming more left-wing views
Using culture war politics on the most educated generation ever
💸Reformed Millennials - Post of The Week
How to understand the Markov Chains from 10-K Diver.
This is a phenomenal thread explaining how to think about bet sizing.
🎙Podcast & YouTube Recommendations🎙
Rebecca Lynn- Finding your customers
At 30 mins she talks about the sales and satisfaction roles inside of businesses
At 42mins she talks through the impact of Ai in voice and health care
Interest Rates, Inflation and “getting fit” with Brad Gerstner - This Week In Startups
🔮Best Links of The Week🔮
45 Ai Applications for Healthcare - Builtin.com
2023 Macro Reports from the largest financial institutions:
Goldman Sachs: https://lnkd.in/eKzF_2K4
J.P. Morgan: https://lnkd.in/eHb6-622
Morgan Stanley: https://lnkd.in/e2nAMjmM
Fidelity International: https://lnkd.in/eJwK6tVx
Bank of America: https://lnkd.in/e8XFD8TW
BNP Paribas: https://lnkd.in/ec4hWEdm