Last December I posted “I’ve always had a soft spot for year end predictions, even though they usually turn out to be wrong.” Then added, “if I’m still blogging in December 2013 I’ll scorecard these then.” So the time has come.
Grading my 10 predictions for 2013:
- Apple closes above $800 a share on the last day of 2013. Embarrassing prediction. Apple’s stock was at $509 at the end of December 2012. As I write this it’s at $554 with a P/E of 14. Apple would be at $800 if their P/E was 20, which seems very reasonable to me by the way. After all, during 2013 Apple executed well on their strategy of dominating the premium end of the smartphone and tablet markets. I just expected investors to bump up their P/E if Apple executed. Wrong. Right now Apple has a P/E comparable to Microsoft, which stands at 13. And full disclosure, I bought some Apple stock near last year’s peak. Tasting my own dog food. On the plus side, this prediction resulted in a couple of posts on why the market is so skeptical of Apple’s continuing success. Post 1 here. Post 2 here. For a more professional take from the same angle, see Horace Dediu’s articles on The Innovator’s Curse. Current score: 0 for 1.
- Japan’s new prime minister Shinzo Abe pushes the Bank of Japan to try NGDP targeting of the money supply, and it works and starts to pull Japan out of recession. Last year, I called “this is more wishful thinking on my part than something likely to happen.” For context, you have to understand I’m bought into the (minority, but not disreputable) market monetarist view that NGDP targeting would have greatly reduced the depth of our current recession. Details here. Reading the economics news, I’d say Abenomics has been a clear success from a monetariasts perspective. And the fact it was tried at all is an incredible mindset change from the “lost decade” approach. So I could score this as a correct prediction. But I’ll score it as a loss. Like many macroeconomic policy initiatives, just as it starts to to have an impact the people opposed force moderation, with a net result we never get conclusive proof either way. Tragic unending argument ensues. The Fed’s recent guidance on tapering has this exact same ambiguous dynamic. Current score: 0 for 2.
- Amazon continues on its crazy path of no profits and ridiculous stock price. Yup. This seems like gimme prediction, but you have to understand I think Amazon can’t “flip the switch” to high profitability. So its stock is at risk as soon as growth falters. Like I said last year “Amazon is a fine company, but they are fundamentally in a low, low margin business and always will be.” And not only are they in a low margin business, they are serial innovators. The stock market normally hates both. Eventually they’ll pay. But not yet. First one I got right. Current score: 1 for 3.
- The Microsoft Windows 8 hybrid UI approach, mixing a touchscreen interface with a mouse/keyboard interface on the same device, is deemed a failure in the tech pundit world. Think this is my best call so far. For example: “The hybrid UI approach makes PCs more complex to use and understand, and that means only a subset of the existing Windows install base will be savvy enough to use them.” Back when Windows 8 first came out in late 2012, very very few people were calling it a turd. But a year later most are. Current score: 2 for 4.
- Tablets will stabilize on the 7 inch size, invented by Kindle, and the larger iPads will turn more into a secondary, though still important, form factor. Wrong! In fact I was planning on getting a retina mini ipad when I wrote this last year. But just this month I replaced my old iPad2 with a full sized iPad Air instead. The big learning here is if you can only afford a single device, you want a phablet phone. Asia, I’m talking to you. But if you can afford both a phone and a tablet, you might as well get a full sized tablet. The 7 inch size is pretty close to a phone, and you can always get a bigger phone to fill the gap if that’s what you want. Both tablet sizes are doing well of course. But bigger is not just bigger, it’s a different kind of device. Current score: 2 for 5.
- Apple will NOT sell an actual TV with a monitor, and instead people will realize that the existing Apple TV box is going to be all Apple will sell. Correct. It’s hard to recall this a year later, but a year ago it was high on the rumor list that Apple would make a TV that competed directly with regular TVs from companies like Samsung. By next year I could see Apple doing not a TV per se, but rather a new category of 4k monitor with built in Kinect style sensors. More about this next week in my 2014 predictions. Current score: 3 for 6.
- Self driving cars go nowhere, and people wise up and realize that self-driving cars are no longer a tech problem, but are a legal liability problem that will take a decade to sort out. The hype on self-driving cars was a bit much last year. It’s calmed down since. I’m a big believer in this technology, but think it’s roll out will be incremental, just like most tech (parking first, some highway driving next, complete self driving a ways off). And legal liability hurdles in particular will be the hardest barrier to cross. Current score: 4 of 7.
- Natural gas and fracking continue to be wonderful for the economy and environment, and this will become a global phenomena (in particular China) in 2013 despite the continued mediocre media reaction. Yes. Nailed it. My post here. Current score: 5 of 8.
- A la carte ordering of popular cable shows for digital download continues to not happen despite huge whining from the tech world. Not happening? Check. Whining? Check. This was more an anti-prediction. Last year a lot of hype around cord cutting. It’s obviously coming. But slow, slow, slow. My post from January is here. Current score: 6 of 9.
- Random sports predictions. My predictions: Lakers – not in the finals, despite a recovery late in the season. Bengals – lose in first round game of this postseason in January, but make the playoffs for third straight year in December 2013. Lakers not in finals. Check. Bengals lost in first round in January. Check. Bengals in playoffs again this year. Check. Final score: 7 of 10.
Not so bad really. What I consider a good prediction is one that’s fun, interesting and clearly falsifiable. Doesn’t matter so much if it turns out to be wrong. Hence the rather arbitrary scoring.
Next week: 10 predictions for 2014.