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Boxing Day special - 2024 predictions



Unpredictable predictions

As is now traditional, we celebrate Boxing Day with some out of the box thinking to make some unusual predictions in for the year ahead.


As ever, please share you're own interesting predictions in the comments. Ideally they should be relatively likely to happen, but unlikely to be listed in any other list of year ahead predictions.


Sports


  1. Saudi Arabia will form a new tennis league.  Saudia Arabia has already formed a new golf league and is in talks with India about investing in cricket. Among the most watched sports globally, tennis stands out for being another summer sport (which seems important). Like golf, the only significant team events in tennis have only national pride at stake. The Saudis tried to host the WTA finals in 2023 but were rejected. If they are rejected in 2024 again they may decide to go their own way.

  2. Lebron's streak of 10+ point games will end. I can think of at least 3 ways this could happen. First is an injury in the first quarter of some game; Lebron does turn 39 this week after all. Second is that Bronny has to quit the game for health reasons and so Lebron decides to retire. Third is that Bronny doesn't have to quit the game and his Dad gives up points to help his son score. Going against me is that scoring in the NBA is extremely high, so LeBron averaging 25 points is not even in the top 10 of scorers.

  3. Everton will not get relegated from the Premier League. There have been 125 seasons of football in England since the first in 1888/89. Everton have been in the top division for 121 of those seasons, comfortably the most of any club. The past two seasons they finished 16th and 17th, so when they were penalized 10 points for not being Man City this season it was looking rough. However, Everton is a much better team this year. Their goal difference is positive, which means that they are likely to continue getting solid results through the season. More to the point, there are at least 3, possibly 4 teams which look fairly terrible, with goal difference close to or worse than -1 per game. Only 1 team has ever avoided relegation with goal difference that bad.

  4. The NWSL will be the fastest growing sports league in the US. About 20 years ago I was working the parab at a Women's football match in Boston. The final score was 0-0, and that vastly overstates how exciting the game was. The players didn't have the sprinting speed to generate any attacks, and couldn't kick the ball hard enough to use the space on the field effectively, or threaten the goal keeper. Things have changed. Now you get the occasional moment of brilliance to get the crowd excited. The Premier League is playing a different game, but as tennis shows, there can be a market for different versions of a game. With a new TV contract sure to create significant promotion efforts, the potential for the NWSL to grow is significant.


Technology


  1. Sodium ion battery production will grow faster than lithium batteries. Certain types of battery sometimes result in lots of flames. This is more of a problem for lithium batteries than sodium ones. The trouble with sodium batteries is that they don't have the energy density to provide the range needed for electric cars. Sodium is a better solution for energy storage, where space and weight is less important, but not exploding into flames really matters. (Yes okay a car bursting into flames is not that desirable either, but compromises have to be made.) Storage is necessary for renewable energy grids to be reliable, so some infrastructure investments in sodium batteries seem likely to happen. Meanwhile, EV demand is not growing as fast as expected.

  2. The stock ticker X will become unavailable. With the purchase of US Steel by Nippon, the stock ticker X should become available for Elon Musk to use when X has an IPO. However, that IPO isn't going to happen in 2024. In the spirit of getting back at Musk six ways from Sunday, I can imagine that someone will intervene to make it unavailable to him. This might mean a rule preventing him from listing on Nasdaq with X, or just some other company deciding to use the ticker.

  3. Sales of Blu-ray drives will increase At some point sales of DVDs will make a comeback in much the same way that vinyl records did. The quality is better than the modern streaming version, and moreover, they are more portable because you can rip them to your PC and then you don't need to be connected to the internet to play them. I think it is premature to suggest that disc sales will increase in 2024, because for now you can get them for cheap in second hand stores that probably won't show up in the statistics. What people may start buying though is the drives needed to make the conversion to PC.

  4. AI products with fail-safe will outperform those without. The analysts tell us that the market for smart kitchen devices is going to grow rapidly in the next few years. I don't really see how a voice activated microwave saves any time since I must already be standing at the microwave to have put something inside, but my bigger question is about smart ovens. Do you trust that they will cook food safely, or are you going to stick the thermometer in anyway? Polls tell us that people are wary of AI, probably as a result of experience telling them that mistakes are often made. They are more likely to spend money of AI devices that provide a small benefit safely than a bigger benefit with a chance of causing harm.


Politics


  1. Joe Biden will not become the oldest living ex-president. The only ex-president who is older than Biden is Jimmy Carter, whose wife recently passed away, and is in hospice care himself. This prediction doesn't depend on Carter, but it gives some interesting context for Biden's age. Predictit has Biden as a strong favourite to become the Democrat nominee. In 2022 polls suggested that Democrats wanted him to stand aside, but with the stock market back at highs, these polls have reversed somewhat. A back-up plan is in place, but it is unlikely that the market will collapse soon enough for this to be viable. By the time Biden gets embarassed at the Presidential debates, it will be too late to change. It seems certain that Trump will be the Republican candidate, which guarantees that the election will be close enough for big tech manipulation to swing it again. In any case though, this prediction is a bit of a cheat, because unless Biden gets impeached, he'll still be President at least until January 2025. He's not going to get impeached, because political indictments seem to backfire and make the target more popular.

  2. Donald Trump will appear on a Jeffrey Epstein list. I don't think I need to say any more. You know this is going to happen.

  3. More than 100 conservative MPs will lose their seat. In the 1997 general election, the conservatives had been in power for 18 years. Labour had a new leader Blair, who had moved the party to the centre. Conservative saw their vote share fall from 41.9% to 30.2%. This translated into their number of MPs falling from 336 to 165. In other words, about half of them were booted out. In 2024 the conservatives will have been in power for 14 years. Labour has a new leader who has moved the party to the centre. In 2019 Conservatives won 43% of the vote for 365 seats. They are currently polling about 25% with seat predictions ranging from 45 to 196. There will probably be some mean reversion in the polls, but a repeat of 1997 looks likely. Perhaps one of the US parties should move towards the centre.

  4. The US/China hotline will get used and answered. When the US downed a Chinese spy balloon, the US called but noone answered. This was scary to defense chiefs, because the US/Soviet hotline was the only thing that prevented nuclear war in the 1980s. China promised to answer next time after the APEC summit, so assuming they are good on their word, this prediction just requires an incident that results in a call. The US military is reportedly getting frustrated at being attacked all the time but not being allowed to respond. At some point a red line might get crossed, forcing a response, and necessitating a call.

Market correlations

All correlations are in return space of course.


1. Oil will be negatively correlated to GOOG.

Source: Yahoo, DavidWooUnbound

AI continues to dominate the technology space. The energy demands of running giant AI models on a global scale are worrisome.


One explanation for why technology stocks have become negatively correlated to rates is that higher rates corresponds to higher energy costs for them, but not necessarily to increased demand for their AI driven products.


A recession-proof version of this prediction is that GOOG/SPY will be negatively correlated to oil.


2. Bitcoin will be negatively correlated to oil.


Source: Yahoo, DavidWooUnbound

Bitcoin is an old hand when it comes to concerns about energy usage from technology.


When the price of Bitcoin is high, energy usage increases, and changes in the price of energy start to dictate the hash rate.


The current rally in Bitcoin seems much more sustainable due to institutional adoption, so prices should at least stay high enough to keep the correlation to oil negative.



3. LLY and PFE will be more than 20% correlated.


Source: Yahoo, DavidWooUnbound

As two large pharmaceutical companies, LLY and PFE should be something like 50% correlated.


However, first Covid, and latterly weight loss drugs have made earnings for these stocks significant jump events. The result of this was that the two stocks had approximately zero correlation in 2023.


At this point the potential for earnings surprises should be lower, which means that a repeat in 2024 is unlikely. Moreover, if we get a recession, the correlation should be significantly higher.



4. IWM and IEF will be negatively correlated.


Source: Yahoo, DavidWooUnbound

The other side of mega-cap stocks such as GOOG liking higher rates is that small cap stocks are now the main beneficiaries of lower rates.


The last time we had a proper Fed hiking cycle in the mid 2000s we similarly saw the correlation between IEF and IWM turn slightly positive.


It is possible that this regime will persist, but with the market pricing 6 cuts for 2024 now, I'm inclined to think that we're going to see something more like 2007 where the correlation turns sharply negative.



Miscellaneous


  1. At least one Olympic event will be disrupted by a protest. The Olympics are a great stage for holding a protest. The IOC asks that competitors not disrupt podium ceremonies because they know just how great. With the large Muslim population in France, a protest against Israel seems likely. A climate protest is also probable. However, this is France we're talking about, so my money is on the farmers.

  2. Barrel pants will be the new trend. If you search for "Kardashian BBL reversal" you'll discover that butt implants are going out of style. This should be good for sales of barrel pants, because they don't look good on people with a big butt. Personally I don't think they look good on anyone, but I'm probably an inverse indicator on anything fashionable.

  3. Birth rates will rise in the US. AI girlfriends are now a big thing, with the main attraction seemingly being to have the opportunity to interact with an AI version of your favourite influencer. You might think that this would reduce birth rates, but the US has two more important factors. First is the generational cycle. The US is currently in an upswing. By contrast, Russian women still have children relatively young, so their cycle is in a trough. The other factor is that illegal immigrants have a much higher birth rate than natives. The number of border crossings is so high this year that it should have a statistical impact.

  4. Childhood cavities will increase in the US. Many children in the US get prescribed a multivitamin with fluoride that comes in one of two colours: orange which are generally agreed to be yucky, and purple which are generally agreed to be yummy. The purple ones have been unavailable for a long time now. I think it is likely that many children have been skipping their pills, and we'll get a corresponding uptick in cavities.

  5. Blindness will decrease worldwide. The US will experience total solar eclipse in April. This has the potential to increase the number of blind people, but I don't want to end on such a bad prediction, so instead I'll take the other side. There was a charming story for Christmas of a man from my wife's home town who regained his sight after 36 years thanks to the Boston corneal transplant. The treatment has been approved for years, but for some reason the Harvard doctor who developed it doesn't want to make it widely available. The Polish surgeon in the story was allowed to start back in 2010, and this has seen the number of procedures go from a couple per year to about a 1,000. However, there are millions of potential recipients. Harvard could use some good publicity now, and making the procedure more widely available could be one way to get some.



Epilogue

I was going to predict that Belichick and the Patriots would part ways, but between me coming up with that idea and publication, it seems to be a done deal, so wouldn't be sufficiently interesting. The same could be said of Everton I suppose, but in this case there is still some uncertainty.


It seems that just about everyone will have met Epstein at some point, so if a list of names is released it could include anyone that the people releasing the list don't like. Elon Musk is the other obvious candidate to Trump.


I wanted to say something about GTA VI which was announced recently, but I gather that this won't be out until 2025. Rockstar make Musk look punctual with his product launches.

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Interest rates continue to fall, causing Financials, Small Caps, Industrials, gold and housing stocks to beat both S&P and Mega Cap Tech in 2024

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I think there could be an interesting dynamic where lower rates do more to stimulate demand for housing than supply. If I'm locked into a 3% mortgage then rates coming down to 5% still mean I want to stay put, but if I've been trying to buy but unable to due to rates being at 7%, 5% suddenly looks affordable.

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