Last week, I looked back at some of 2022’s predictions, but this blog has made a lot of successful predictions over the years. In fact, I think it’s one of the core strengths of what I do here.
I sometimes forget most people reading probably have not been around for some of the older ones, so I thought I’d kick off the New Year with a bit of a highlight video.
What follows are some of the biggest calls I’ve made here for your enjoyment. You can see they span from insurance to investing, sports, and more.
If there is one overriding theme, it’s effectively calling BS on things that are trendy before others too realize they were BS all along!
I’m going to do these chronologically, so let’s start off with one of the biggest sports predictions.
Back to Back NCAA Tournament Winners
That was important because it means if you followed my advice you won your pool. Anyone can tell you to pick the favorite, but you don’t win the pool that way. I showed you in my guide, you need to find the best team that isn’t popular.
The Insuretech 1.0 Crash
I called this all the way back in 2019! Even before some of my later more critical pieces, I made clear the initial optimism about the bigger insuretech companies was misguided and would end poorly.
Today, most people know that a lot of corporate ESG efforts are what we now call greenwashing. But when I first wrote about the conflicts inherent in ESG, it was very non consensus and provocative.
Insuretech Cash Burn
Back before anyone (including company managements, VC investors, board members, etc.) ever thought about cash burn for an insuretech, I was warning it was the key thing to watch. It has since become arguably the most important metric to manage.
The Insuretech 1.0 Crash, Part 2.0
In early 2021, I predicted that the initial decline in insuretech stocks was only the beginning and they would fall another 80-90%. Since then, they have fallen…80-90% and more.
This is an important reminder (we’ll see again later) that once things fall apart, they keep falling apart. You didn’t miss the short call.
After the Robinhood IPO, I suggested that was the peak on the stock and you might want to consider puts because the day trading game was over. Another relatively easy one even if the market didn’t realize it yet.
This one was a low degree of difficulty, but still right is right. I suggested the SPAC run was over around the time of the Hagerty listing. I believe that was the last insurance SPAC we’ve seen and those that remain trade at much lower prices.
The End of the Bull Market
In late 2021, I suggested the Fed would kill the bull market. While I didn’t pin a date on it, it happened almost immediately thereafter.
The Death of Crypto
Long before most people knew who Sam Bankman-Fried even was (OK, it was actually only about six months, wow), I called the end of the crypto bubble.
Little known fact but this was actually the most popular post in iansbnr history. Some crypto crazies got hold of it and it went mini-viral in the crypto world.
The Reinsurer’s Veto
This one is only starting to play out but I’m pretty confident I know the ending already. Reinsurers are gaining their market power back and putting an end to all the business models built on “arbing” reinsurance. This will be one of the bigger stories of 2023.
The Power of Downside Momentum
One of the common themes that emerged repeatedly above is the power of momentum. While many people get excited to ride the elevator of upward momentum (think of the bull market Hares), the problem is all you have to hang your hat on is…momentum.
There is no valuation support, no next buyer willing to step in if you sell. Your only hope is continued momentum.
Compare this to negative momentum. Not to pick on Root, but since it’s an example readers will understand, the stock is -98% from the IPO. Guess what? It’s also down 90% from a year ago.
You can wait for the momentum to roll over on broken stories. In other words, you can be late and still capture nearly all the downside.
If you think crypto is going to 0, you can still make 99+% shorting it even if you’ve missed the first 75% down. The easiest calls of all are riding broken stocks to the bottom. Negative momentum is the gift that never stops gifting.
The best thing about it is, rather than having no fundamental support, you have all the fundamental support plus the momentum. It’s pretty simple to argue Bitcoin or Peloton or Beyond Meat or AMC are still overvalued.
So you have two great attributes in your favor. The math of stock declines means you can never be too late to -99% and broken momentum means fundamentals will be relevant and act as a magnet pulling the stock down.
So while some of you surely thought this post was an excuse for me to brag about some good calls I’ve made over the years, you’ve hopefully learned an important lesson too!