Last week I presented five popular prognostications made by commentators in the hedge fund space. This week I present five more predictions about predictions.
6. Technology – Ever since everyone failed to foresee how successful the personal computer would be, technology has been subject to gross levels of hype and every year one is hyped more than the others. So what is it to be this year? Cloud computing? Machine readable news? Artificial intelligence? Well, the world’s biggest computer fair has just taken place in Las Vegas and judging from the successes there, I can predict that 3D electronic trading will be big in 2010
7. Big deals – Investment ‘experts’ are always keen to forecast an audacious acquisition or mega merger at the beginning of the year. Among this year’s nominees are the following: Microsoft buying AOL; Goldman Sachs and Warren Buffett joining forces to take the investment bank private; or any of the following mergers - General Motors and Volkswagen; IBM and Dell; Amazon and EBay. The strategy behind these predictions seems to involve finding the two biggest companies in a sector and then predict a merger between the two. What price a Coca-Cola an Pepsi merger eh readers?
8. ‘Roller-coaster’ year – Predicting what way the economy will go in terms of inflation, employment, house prices and interest rates is hard enough. Doing the same with the stock markets is just too taxing. So, why not take the easy way out and predict a ‘roller-coaster’ year that will go up,down, upside-down and a round and around before delivering us all back to the same starting point, minus some false teeth, spectacles and a few lunches.
9. Warren Buffet – The Sage of Omaha is perhaps the most reliable and successful investor still operating. But he didn’t get where he is today by making top 10 predictions every January. Nevertheless this has not stopped various websites crow-barring as many references to the Berkshire Hathaway boss as possible in their prognostications. I’ve done it three times already. Top marks to CNBC’s Warren Buffett Watch though which dispensed with any 2010 predictions and settled for the same collections of ‘timeless’ Buffett sayings it has ran since 2007.
10. Bet against the market – No list of predictions is complete without one final piece of investment advice – to ignore all the proposed trends and bet against the market. Short-sellers may have kept their heads down for the last 12 months but you can’t keep a sceptic quiet for long. James Chanos, billionaire president of Kynikos Associates and self-confessed contrarian is often presented as the antithesis of Warren Buffett. And this year, he says China will be the next big bubble to burst.