Opinion: Here’s what I got right and wrong on stocks, bitcoin and China this year — and my predictions for 2022

It’s been a wild year in the markets, with mega stocks doing big and speculative stocks for small captors…not so big.

Here is a review of my predictions for 2021 and an update of my thoughts for the year ahead. My predictions are from a year ago in italics.

1. Underperformance of small firms, especially stocks with more speculative small capitals which are rising hugely.

December 2021 update: Small business index rises less than half the rise in the S&P 500 SPX,
-1.42%
and other key indicators. Shares of the most speculative small companies fell 50% or more. One prediction is correct so far.

Prediction for 2022: Small companies underperform again, but good companies among those speculative stocks that collapsed are ready to pick. Their number will triple or quadruple in 2022.

2. FAANNG (FB, AAPL, AMZN, NFLX, NVDA, GOOG) is trading in different ways, FB, AAPL and GOOG are having a good year, NVDA is trading flat, while AMZN and NFLX are underperforming.

December 2021 update: They all had a good year, and NVDA was doubling. Obviously, this prediction was wrong.

2022 Outlook: FB and NFLX outperformed this year, NVDA, yes, unstable, while AAPL, AMZN and GOOG are slightly down for the year.

3. Oil is trading as low as $25 at some point, spending most of the year at $30 highs.

December 2021 update: haha, not even soon. However, the price of oil was only $40 when I wrote it. But she’s never looked back and has spent most of the year dwarfing my expectations.

Prediction for 2022: Oil is trading below $50 at some point, but spends most of the year in the 1960s.

4. Real estate prices stabilize, as urban prices stop falling while suburban and rural prices lose momentum.

December 2021 update: This prediction was correct.

2022 Predictions: Real estate is going through a tough year with soaring interest rates for homebuyers and the madness of owning a second, third or 10th Airbnb ABNB,
-2.09%
Out.

5. Interest rates increase throughout the year and the cost of borrowing money for businesses, homeowners and the US government has increased by 50%-100% after reaching its current historical lows.

December 2021 Update: Prices are already up 50% across the board for businesses and homeowners and on Treasurys too.

2022 Prediction: Prices continue to gradually rise, but may only be 20%-30% higher than current levels.

6. The Communist government of China continues to clamp down on its giant corporations in Hong Kong and pushes the limits of its geopolitical power. Governments around the world will continue to feign displeasure but will continue to do nothing about it but send out press releases of their displeasure.

December 2021 update: Wow, this event turns out to be prescient as China’s crackdown on its biggest companies gets ruthless and China pushes the limits of its power on an already geopolitical scale. Meanwhile, the Olympics will be held in China and most governments around the world are feigning dismay.

Prediction for 2022: The Chinese pendulum is swinging the other way, and the Chinese stock market is having a good year. However, nothing fundamentally changes really, and the Chinese stock market will be in a good position to sell short.

7. Biden and Democrats pass some form of a new tax law, which will include thousands of pages of new loopholes, subsidies and protections for giant corporations, banks and special interests, just as Trump and Republicans have done. Real tax rates for most giant corporations, banks, special interest groups, and people who earn millions will go down but rise for the middle class and the poor, just as they did under Trump and the Republicans. Republicans will pretend they hate the tax bill but it will pass anyway, while Democrats will pretend they will do more to help their base, just as Democrats pretend to hate Trump’s tax bill but it passed anyway while Republicans pretend he did something For him. Help their base.

December 2021 update: Republicans will say that’s not true and so will Democrats, but I think if you back away from the rhetoric, that’s exactly what our federal government is doing to pretend it’s doing something to help you or to help protect your rights.

Predicting 2022: Partisan tensions continue to escalate, fueled by angry headlines from “both sides,” that make it impossible to pass bills measured in multi-trillion-dollar increments. Disagreements over the elections escalated in the upcoming elections, and neither side will recognize the victory of the other. And I don’t know how this resolves itself in a good way if the partisans keep growing their ranks and continue down this controversial path, but that will be nothing in 2022.

8. Green stocks, including alternative energy stocks and hemp, will plummet sometime as early as mid-2021 and then regress back into an incredibly large giant bubble, which will collapse shortly after the Biden administration passes said tax package Above, which of course will divert the billions of benefits, welfare, and protections that Republicans prefer for oil/natural gas companies into the alternative energy companies favored by Democrats.

December 2021 Update: Still up and running, Build Back Better package gets worse.

Prediction for 2022: Green stocks are doing poorly in 2022, and I’m finally starting to rummage through the wreckage for good stocks.

9. Bitcoin has been trading in a stable bullish pattern for most of the year, ending somewhere around $3,8739.92 per bitcoin or so.

December 2021 update: Bitcoin BTCUSD,
-0.02%
It traded in a bullish pattern for most of the year, but quickly hit $60,000 and then halved again which is above what I thought was a very bullish year-end target price for Bitcoin when I started trading at $29,000. Heck, bitcoin might end up near my target price after all, given that there are still 10 more days of who knows what kind of action to take.

Predict 2022: Bitcoin is going through a tough year but it doesn’t crash, ending up somewhere around $3,8739.92 per bitcoin or so.

10. The space revolution just got noisier like Virgin Galactic
SPCE,
-18.92%
And other booming aerospace companies pull off a string of successful launches.

December 2021 update: Yes, the space revolution is getting more and more exciting, but the space stocks aren’t doing well until the end of the year here.

Prediction for 2022: Space hype moves to hyperdrive as SpaceX’s giant rocket ships enter orbit and begin heading to the Moon in 2023.

11. Starlink from SpaceX is changing the world for its customers, especially those who live in rural areas who will suddenly have faster internet than their urban neighbors on old cable/DSL or 5G.

December 2021 Update: You’re Still Waiting – It turns out it’s hard to create a space communications network that will change the world in just a year or two. It might take another year or two, but it’s coming and I know it’s going to change my personal world to have reliable, high-bandwidth low-bandwidth internet in my home instead of the unstable, slow and expensive DSL we currently use.

Predicting 2022: Starlink files for an IPO with 2022 closing and an ongoing valuation around $200 billion.

12. I’m going to put a lot of pressure on myself to continue to excel, to find the next Tesla
TSLA,
-6.75%
At $50, to avoid painful losses, they must be disciplined.

December 2021 update: Yes, as before.

Prediction for 2022: as it should be.

Thanks and happy holidays from my family to you.

Cody Willard is a columnist for MarketWatch and editor of the Revolution Investing newsletter. Willard or his investment firm may own or plan to own the securities mentioned in this column.

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