2022 Predictions
I thought that it would be fun to make a list of predictions for 2022. The post is broken down into three categories: capital markets, sports & entertainment, and politics. I’ve also included some of my goals for this year at the end. Let’s see what 2022 (may) hold!
Capital Markets
The S&P 500 will return at least 25%
The Federal Reserve has acknowledged that it will begin tapering its bond buying and has also hinted at upcoming rate hikes.
As the price to borrow money becomes more expensive, I think that we will begin to see even more contraction in growth stocks (i.e. SNOW, DOCU, TDOC, etc.). The sell-offs that we witnessed in November and December was the initial action and I think many of these high-flying tech stocks will drop further.
With that said, I do not think we will see an all out crash in growth-oriented companies, but rather a much needed correction. I think this is because the notion of long-term investing has increasingly become an “old school” philosophy.
Let’s remember, people can make millions flipping jpegs in their basement, selling courses for hundreds/thousands of dollars a pop to tell YOU which (shit)coin will be the next to MOON!!! So, when it comes to some of these high-flying technology stocks, I think we could see them whipsaw like never before and the fact that some of them may drop 20% in a day will disappear into a forgotten memory. Overall sentiment is a bullish 2022.
Big Tech will win…again
Choose your acronym: FAANG or MAMAA
FAANG: Facebook, Apple, Amazon, Netflix, Google
MAMAA: Meta, Apple, Microsoft, Amazon, Alphabet
Amazon stock has barely moved in a year, Facebook’s rebrand to Meta have some thinking that Zuckerberg is inching closer to world domination, and Google-owned YouTube is the same size as Netflix in terms of run-rate revenue.
Amazon: As of the time of this post Amazon is trading at less than 4x its trailing 12 month sales. Amazon Web Services is a $50 billion run-rate revenue business and its growing near 40% year over year. I think one way we could view Amazon stock is that it trades on a multiple of AWS. If you’re bullish on the future growth prospects of cloud computing in general, and AWS’s position in the market, Amazon stock could be a compelling a buy.
Facebook (Meta): I think we will see Facebook’s market capitalization eclipse $1 trillion, and it will sustain/grow throughout the year and end 2022 worth more than that. Facebook is going all-in on the metaverse and I am not going to bet against Zuck. We’ll see NFT’s come to Instagram, more product features in Oculus, and I think we (might) see a major M&A deal out of them.
Apple/Google: I can see these being two huge winners in 2022, but for different reasons. Apple is rumored to be launching an AR/VR headset, and should it be able to side-step any lingering supply chain issues, we may see an uptick in iPhone purchases. Google, on the other hand, seems unstoppable. Although this is not necessarily a 2022 prediction, I think that Google could become the world’s largest company within the next 5 years.
We will see at least one mega-deal
I’ll try and be specific here since a mega-deal seems kinda vague:
DocuSign: I could see them getting acquired. Two likely candidates in my mind are Salesforce or Microsoft. If I had to choose one, I’d say Salesforce. Now, we know that DocuSign just formed an in-house venture/investment unit, and so the company selling one year later wouldn’t make a ton of sense. My hot-take is that the company will struggle to integrate new features and product enhancements and ultimately be viewed as a commoditized e-signature platform. Perhaps it won’t happen in 2022, but I think a takeover will eventual happen.
Dropbox: Despite some interesting acquisitions, I think that Dropbox is going to continue losing market share in the cloud wars. AWS, Microsoft, and Google are just totally different animals. Prediction: Dropbox is taken private.
IPO: Here’s my favorite prediction! I think we could see a big name IPO called off. Which one? No clue :)
A celebrity will go to jail over crypto fraud
Crypto is taking over the world. Celebrities and the Four Horsemen of Clickbait are pumping shitcoins, professional athletes are investing in crypto platforms, and iconic landmarks are being rebranded…all in the name of profit, all in the name of crypto.
Like Martha Stewart, I think this game will catch up with one unlucky son of a bitch. I don’t know if it will be an athlete, a movie star, a musician, or a dog on Tik Tok. But I think someone is going to be made an example and serve the price. But don’t worry…in typical celebrity fashion the person will get a book deal and Hollywood will produce a limited series drama about it and have the criminal serve as an executive producer. Stated differently, the celebrity still wins and you still lost your money listening to them.
Sports & Entertainment
Ok, so some of this is meant to be funny. But that doesn’t mean I don’t totally believe it :)
Gambling and Sports Wagering Will Shine
The pandemic has fueled a boom in sports wagering. Check out my article on FuboTv to see how much.
I think 2022 will have a more authentic “re-opening” or “return to normal.” In 2021, commercialized vaccinations helped fuel a narrative dubbed “shot girl summer.” I live in Washington, DC so I had a front-row seat to bars, restaurants, and concert venues re-opening and flooded with people anxious to get out of their apartments for the first time in over a year. This dynamic lasted a couple of weeks and then the delta variant became a thing. Then winter came and now we have omicron.
I read a really interesting thread on Twitter re: omicron (see here). Now, unlike most people in society today, I don’t believe or repeat the last thing that I read or hear. However, the opinion expressed in this thread is not so different from other things that I’ve been reading. For this reason, I am (slightly) bullish that omicron will wane, and further strains (if any) may become weaker. For this reason, I think we could have the real re-opening in 2022. In my opinion, casinos and sports books will be a huge beneficiary. Disclosure: I am not a doctor, virologist, or epidemiologist. My theory about potential future strains is my hypothesis. I could be incorrect, as often is the case in my life.
We will see NFT’s on sports tickets
NFT’s took the world by storm in 2021. From jpegs of basement dwellers smoking weed to jpegs of dinosaurs living in a fantasy-comic netherworld, people paid big bucks to get their hands on these digital assets.
Although the exact use cases and functions for NFT’s are still up for debate, I think that we will see some pretty cool stuff in 2022.
In an effort to drive attendance at sporting events, I think NFT’s will become integrated as a component of the ticket. Most of these NFT’s will be more generic, while a select few of them will contain “Easter Eggs” in the form of limited edition merchandise.
Business Insider gets sold to The Onion
I am embarrassed to admit that I used to read Business Insider. I discovered it when I first started working when I was 22. Over the last eight years I’ve watched the publication regress from (mostly) clickbait but occasionally decent coverage at the intersection of technology and business, to a website that, ultimately, serves no purpose. The website is full of pedagogic, moral lectures written by Zoomers who think they are “doing their part” for journalism. I would love to know how many degenerates subscribe to its paid service, Business Insider Prime.
Politics
Alright…everyone’s favorite topic. I’ll try to keep this light. If anything offends or triggers you, feel free to unsubscribe!
Biden loses the midterms
I am not going into approval ratings or which problems the President inherited versus those that he did not. But with that said, as Build Back Better crumbles and inflation concerns linger, I think losing the midterms is almost a lock.
Let’s add an octogenarian to this list: Pelosi retires
If Biden loses the midterms then I think it’s highly likely that Nancy Pelosi will retire. More and more people are beginning to wake up and ask questions. CEO’s, politicians, even ordinary people hate being asked questions. Think about the last time your co-worker sent you an instant message asking for a “quick second” and what your reaction was. Questions can be very annoying. And when you’re in the spotlight as a career, they are even more burdensome.
Pelosi was recently asked by a journalist what her opinion is with regards to members of Congress buying and selling securities. The clip from JRE below highlights her unusual response.
Speaking of unusual, this report from unusual_whales points out some pretty eye-opening activity. In fairness, unusual_whales posts the same data for other sitting members of Congress regardless of party affiliation. But let’s get back to the original prediction. If Pelosi retires, will we ever hear from her again? You bet your ass you will. Upon retirement I’m predicting that Netflix or Twitter will promptly ask her to join the Board of Directors.
Trump officially announces that he is NOT running for President
Rumors of Trump running in 2024 have been a talking point since the day he left office. Some think he is waiting for Hillary Clinton to declare that she is running, while others hypothesize that he’s waiting to see how the midterms go.
Even if Biden loses the midterms, he still has three more years to triangulate and form new alliances. For this reason, potential 2024 presidential candidates are as much as an enigma as the fucking labyrinth. For these reasons, I think Trump bails out. I am not entirely sure he will endorse anyone, though.
2022 Goals
Ok, as I wrap this up I wanted to share some of my 2022 goals.
Personal Goals
I need to read more. I used to read a lot, but admittedly, I stopped once I started working remote full-time. Something about this dynamic threw me off my usual routine. I slowly stopped doing the things that I used to do. My more measurable goal is to read 20 books. Some of them are below. If you have suggestions, please let me know!
Atomic Habits
The Obstacle is the Way
The Beginning of Infinity
The Luxury Strategy
The Dao of Capital
All of Jeff Bezos’s annual letters
Biographies: Grant, JP Morgan, and Napoleon in particular. If you have any suggestions let me know!
Working out 2-3 times per week….yeah, I know this is everyone’s goal.
As a former collegiate runner, I have a goal to run in three 5K road races come spring and summer.
Social Media Goals
YouTube: Over the summer in 2021, I started a YouTube channel on which I discuss the stocks I’m analyzing. I did not invest much into production quality. This was more or less an experiment to see if anyone would actually watch my videos.
This year, I plan to invest more time into the quality of the videos and actually edit them as opposed to stream of conscious talking. More importantly, I’ll be following more of a weekly cadence as opposed to posting when I feel like it.
My concrete goal is to get to 1,000 followers on YouTube. For some, this is probably laughable as I know this is peanuts compared to other channels. However, I need to be realistic. My ultimate goal is to have much more than that, but I think an achievable goal is to get my follower count up from near 300 today to 1,000.
Substack: I discovered Substack during COVID. I subscribe to a fair amount of writers and find the content to be superb and refreshing. There’s something nice about reading a person’s actual thoughts, opinions, and analysis.
I personally enjoy writing more than I enjoy talking, so I would love to grow my Substack email list over 2022. Writing can be a very time-consuming, daunting task. Like YouTube, I post on Substack when I feel like it and hence have not built a large audience. My goal is to post twice per week and grow my email list to 500 people.
I mostly will write about the capital markets, but I do not plan to write full on equity research reports in each post. Some posts will be deeper dives into certain stocks, while others will be my observations or specific investing activity. I will also send out a list of articles and podcasts that I view each week, and would love for you to send me suggestions as well!
Well, alright. If you made it this far I really appreciate it. I hope that you all have a happy and healthy 2022!
Links to my social media: Here