Revisiting My 2013 Predictions: The Crystal Ball Wasn't Awful

Posted: Dec 29 2013, 7:26am CST | by , in News

 

Revisiting My 2013 Predictions: The Crystal Ball Wasn't Awful
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Last December, when I was relatively new to Forbes, I closed the year with a look into what I admitted would be a hazy-at-best crystal ball for 2013. Before looking ahead to next year, it seems only fair to look back at what I called “13 Fearless Predictions for 2013.”

1) U.S. Economy

Looking for 3% GDP, against a 2.3% consensus, the jury is still out. But through three quarters, the average has been running at nearly 2.6% and the trend has been up every quarter. The brief government shutdown will likely put the fourth quarter below the 4.1% of Q3, but the final tally could easily be closer to the prediction than the expert guess. The same is true for unemployment, where I went below consensus to 7.4% and the current figure is at 7.0%. On inflation, the uptick I saw coming, however, was replaced by a downtick. Overall, not too bad.

2) Exchange rates

The dollar did gain against the yen (another good call), but it soared past my target of 90, reaching 104. The Euro didn’t weaken (bad call), but didn’t gain much either, going from $1.32 to $1.37.

3) Oil prices

Spreads were $20 between West Texas and Brent and I said they would fall. As of today, they’re less than $12, thanks to improvements in pipelines and increased throughput out of Cushing, Okla., among other factors. The $99.39/barrel price on West Texas is also spot on with my call for a year-end price “around the century mark”. (No, I didn’t trade oil futures.)

4) Apple

The stock did trade up, but ended the year more than $200 below my $800 price-per-share prediction. The China Mobile did, however, did materialize just in time to make that call look good. (Fortunately, I didn’t trade Apple stock either.)

5) RIM and Nokia

I predicted doom for both, with Microsoft buying Nokia’s smartphone division (a win). The rest of my Nokia carcass picking has yet to materialize. While RIM has most certainly entered the terminal phase, neither Oracle nor anyone else has bought any part of it yet. With the value of mobile patents in question of late, it’s less clear anyone will.

6) Netflix and Pandora

Both of these were Apple acquisition targets on my prediction map last year. Instead, both stayed independent and had spectacular stock run-ups on their own. The structural problems for Pandora (high licensing costs for music) are still an issue, but seem a bit less important as the business has grown. What matters more now is the increasingly competitive landscape with Spotify, Apple and new entrants poised to make it more challenging to turn a profit.

Netflix is everyone’s darling, but big bills are coming for streaming, international operations are still money losers, and just how many will sign up domestically remain challenges ahead. Still, what made them attractive acquisitions for Apple a year ago helped make them successful in 2013. And it’s likely to continue to do so going forward. All in all, this was an awful prediction, even if it might have made strategic sense for Apple to spend some of its $150 billion in cash on two big 2013 winners.

7) HP

The turnaround I looked for is indeed underway, though little of the expected restructuring has come to pass. CEO Meg Whitman has seen the stock double and some stability return, but still hasn’t answered questions about the PC and consumer printing divisions, which are both in permanent secular declines. HP, meanwhile, is barely evident in the tablet market. The good news is the company doesn’t face an immediate crisis. The bad news is HP now faces a private Dell, the same panoply of device manufacturers that are killing it in mobile, and an uncertain future in servers. Calls to break it into pieces will be heard again down the road.


8) Sports

I’m a big sports fan, but the idea you should take advice on who will win the World Series in October from a December Forbes Technology column is, well…. None of the Packers, Thunder or Nationals won. Odds are none of those teams will win this year either.

9) Natural gas

Sure enough, natural gas prices did rise somewhat sharply from last year, reaching their highest prices since 2011. I’ll take this one as a big win against the “oh-fer” on the sports prediction. In addition, fracking did expand significantly, though well depletion hasn’t been a severe issue thus far.

10) Movies

The awards were very mixed for me. Argo and Ang Lee completely undid my Oscar ballot along with the backlash against Zero Dark Thirty. But Anne Hathaway, Jennifer Lawrence and Daniel Day Lewis gave me three wins on the acting awards out of four categories. I had Catching Fire, Iron Man, Man of Steel going 1, 2, 3 in the box office and they actually went 2, 1, and 4 with the Despicable Me sequel pulling into third place. What’s remarkable about that is I haven’t a clue how I pulled that off. On the other hand, I doubted Gatsby, which did OK ($144M U.S., though the marketing budget was prodigious and the profits likely tiny) and thought Lone Ranger might be all right (it wasn’t, $89M U.S. and a giant writeoff).

11) Governors

Calling Chris Christie early wasn’t bold. Calling Terry McAuliffe in a razor-close race was. Both paid off. One is running for president soon. (Clue: He won big and is big.)

12) Internet stocks

The volatility of Facebook proved to be a good call as did faith in its new products. I missed its super strong finish though. Groupon did recover some, but LivingSocial isn’t yet part of it. Zynga, remarkably, is also still independent. While Dropbox and Square haven’t yet gone public, Twitter did (defying many others who felt it would wait till 2o14) and got the big valuation on $500+ million in revenues. Pinterest also debuted a business model, as predicted, with “promoted pins.” This one comes out mixed, though with Square interviewing investment banks and Dropbox recently raising what ought to be its last private cash, it seems likely to be completed — if a bit late.

13) Congress

There ought to be some adage about how you can never go broke betting against the U.S. Congress getting something done. If so, it will stop me from ever presuming something like common-sense tax reform will pass a divided Congress again. It not only didn’t, no one proposed a bill. Entitlement reform certainly died for the foreseeable future (so that was a good call), with the Murray-Ryan budget deal.

Lessons learned

There’s a bit of a black art to this. When looking at quantifiable data, one can only be wrong within a range. Still, on those tests, the crystal ball did better than many pundits who do this kind of thing for a living. When looking deeper into the unknown though (a black box like Apple, for example), a prediction is really just an educated guess. I’ll venture into the unknown for 2014 in a companion post, where I’ll surely be wrong again. But I’ll keep polishing the crystal ball nevertheless.

Click for my “14 Pointed Predictions for 2014

Follow me on Twitter and on Facebook. Find the rest of my Forbes posts here.

Source: Forbes

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