My past predictions. How I did in 2018?

December 18, 2018

At the end of 2017 I made 5 main prediction for 2018. On average I did pretty poorly...

  1. Facebook will complete a $10bn acquisition of a private or public company. The potential target in my list are: Box, DropBox, Spotify, Lyft and Snap; Verdict: 0/1 (Facebook did not make any major acquisition).

  2. The oil price will reach $90 per barrel by the end of 2018 thanks to continued world growth and unexpected demand from developing markets, together with disappointing hydraulic fracking production, OPEC discipline and only modest production increases from Russia, Iraq and Iran. Verdict: 0.5/1 (the price per barrel achieve $90 in June but declined to $60 in December)

  3. Higher oil price and general inflation pressure will make the FED increase the interest rate 4 times during the 2018, from 1.5% to 2.5%. The Bank of England will increase the interest rate 2 times this year, taking the nominal rate from 0.5% to 1.0%; Verdict: 0.5/1 (The Bank of England raised the rate just once to 0.75%)

  4. The U.S. economy has a better year than 2017, but speculation reaches an extreme and ultimately the S&P 500 has a 10% correction. The index drops toward 2300, partly because of higher interest rates, but ends the year above 3000 since earnings continue to expand and economic growth heads toward 4%. Verdict: 0/1: (the S&P will close the year at 2.600 points).

  5. Amazon will become the most valuable company in the world, overtaking the top place from Apple. Amazon, today valued at $625bn, will benefit from an increasing dominant market share in the US (50% of online retail by the end of 2018) and an international revenues growth rate of over 50%. Apple (valued today at $900bn) will suffer from an unexpected long-time replacement of the Iphone 5 and 6 and by the cold reception of the IPhone X. Verdict: 0/1 (Apple retained the spot as the most valuable company in the world and in addition Microsoft is now more valuable than Amazon)

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