Good year in 2010 for US stocks, not such good one for Byron Wien’s list of “top ten surprises.” As a strategist, and now Blackstone vice chair, He’s been doing this a long time. Doesn’t mean he’s getting any better at it, though.
By our count, he was completely wrong on eight of his predictions, mostly wrong on his No. 1 (GDP would grow at 5% real rate, unemployment would drop below 9%; S&P 500 operating earnings would come in above $80 — that looks safe.)
Big swing and a miss on the following:
- Fed would raise interest rates, with Fed funds rate at 2% by year end. We’ll be lucky if that one happens by 2012.
- Yield on 10-yr note would go to 5.5%. See above. Equally fanciful.
- S&P rallies to 1300, then falls below 1000 and ends year at 1115. Nice try. Not even close.
- Dollar rallies vs yen and euro, with EUR/USD dropping below $1.30. Briefly correct on that one, but didn’t last.
- Congress would pass bills providing loans and subsidies for new nuclear power plants. Didn’t happen.
- Democrats would only lose 20 House seats in November. Whoops.
- Civil unrest reaches crescendo in Iran, Ahmadinejad gets pushed out. Also didn’t happen.
- Japan’s Nikkei 225 rises above 12000. Not quite.
And the one Wien got right — well, let’s just say it wasn’t exactly a tough call: Financial services reform legislation “proves to be softer on the industry than originally feared.” Really out on a limb, eh? “There is greater consumer protection, more transparency, tighter restriction of leverage and increased scrutiny of derivatives, but the regulatory changes for investment bankers and hedge funds are not onerous,” Wien predicted last year. Didn’t take the talents of a clairvoyant to nail that one.
His 2011 predictions came out today, and if some seem familiar, they should. In particular, this year’s No. 1 — nearly 5% GDP growth in the US and unemployment falling below 9% — is same as last year’s. He’s also still expecting a spike in Treasury yields, though 2011′s year-end estimated level of approaching 5% compares with last year’s prediction of the 10-year getting pushed above 5.5%. Wien is also anticipating the commodities rally to continue–with gold topping $1,600, grains moving still higher and oil reaching $115.
Kevin Kingsbury contributed to this post.
