New Years Day 2018

Happy New Year!  It’s cold here in Chicago.  Last night, it was below zero.  My wife and I will be stayed in.  We did some yoga yesterday and as we always do we will be at the University Club for the best party in Chicago.  If you aren’t a member, you should join.

As we speak, Iran’s people are trying to reclaim their freedom and bring down the totalitarian government.  Iran has been a thorn in the side of the United States since 1979.  I wish the people well and hope 2018 brings a new government in Iran that is independent and gives freedom to its people.  Of course, if you want to follow accurate coverage of it the place to be is Twitter.

I detest predictions.  They almost never are right.  I also think they lock you into a mindset and wind up giving your head an “endowment effect”.    However, I have some things ruminating in my head that I will share.

  1.  This year will be a double-edged sword for crypto.  There are going to be a lot of failures, but there will also be successes. The successes will have some commonality.  The blockchain and corresponding token will be an essential part of their business, core to their mission.  The successful teams will have a lot of discipline around what they are doing and carefully use the money raised in the ICO.
  2. Lots of companies that have done ICOs are going to relocate their corporate charters to places like Nevada, Florida, and Texas.  ICO accounting creates a taxable event.  The money that comes in is revenue, not equity.  Why pay corporate tax on it when you don’t have to?  Sure you can recognize it over time but still…..
  3.  The Cubs will find a way back to the World Series.
  4.  The Blackhawks will not find their way back to the Stanley Cup.  More changes afoot.
  5.  The Bulls are not going to be the 76ers.
  6.  The Bears will make the playoffs next year.
  7.  Illinois will see a flood of people leave. High taxes will send the wealthy away and lack of job opportunities for the   middle and lower middle class will cause them to continue to go.
  8.  The Republicans will hold the House, and gain larger control of the Senate.  Identity politics is dead.
  9.  Entrepreneurial People will leave NYC, California and repopulate in places like Texas.  At least one very large fund   will set up a branch office there.
  10.  M+A activity will hit an all-time high in the back half of the year with transactions being all stock.
  11.  The stock market will not grow by double digits next year, but it will grow.
  12.  China will take care of the little fat man in North Korea as the cost/opportunity cost for them are in favor of him   being gone.
  13.  Senator Kamela Harris will declare for the Presidency, and be the leading Democratic candidate.
  14.  There will be a slew of high end homes for sale in Chicago and the surrounding suburbs.  Prices will take a 40% hit   or more.
Last January, I had breakfast with a bunch of people and we picked some stocks.  Here is how they performed.  I didn’t do so well.  I picked SNAP! That’s why I invest in indexes.
 Indexes
SPY 19.38%
QQQ 31.47%
DOW 25.25%

 

Breakfast Stock Pickers
AMGN 18.94%
BSX 14.61%
BX 18.46%
C 25.21%
CCL 27.49%
CLB  -8.74%
DLTH -29.7%
FLIR 28.82%
HBI -3.6%
HUM 21.59%
JNJ 21.27%
KAR 18.51%
MFST -81.5%
MSFT 37.66%
NOV -3.79%
PANW 15.91%
PLT -8%
SNAP -40.3%
SWKS 27.18%
TSLA 45.7%
X 6.66%