2012 Predictions In Review

With just a few days left in 2012, I think it’s appropriate to check on the list of 7 predictions which I had made at the beginning of the year.  Let’s see how everything turned out:

  1. President Obama will get re-elected – Got it right – I knew without a doubt that Obama would get elected when Romney’s video explaining what he thought of ‘the 47%’ was released.  It proves that Romney, and really the Republican party, is very much out of touch with the voters.  I don’t know that they have a consolidated message and even when they do, they have done a very poor job at translating that into a message that the voters respond to.  This win wasn’t so much a victory for Obama as it was a fear of Romney. 
  2. A downturn on strategic defaults and underwater mortgages – Got it right – I figured that the housing market had hit bottom.  Last year it seemed that while things weren’t on the upswing just yet, we had leveled off.  This year did see an actual upswing in most areas of the country, and part of that included less strategic defaults and less underwater mortgages.  I guess if home values rise, this naturally brings people at or above the ‘underwater’ line, which would give people less reason to walk away. I’m very happy to see this and I hope that the housing recovery market is sustained moving forward!
  3. The Eurozone crisis will not be solved but will get less attention – Got it right – Was anything really accomplished in the European crisis?  Not really.  I think they did kick the can down the road a bit, but as far as actually solving anything, I don’t think that happened to any real degree.  However, the markets and the economy really didn’t react in much of a negative fashion.  There was a couple of months in the middle part of the year where the market did have some rough weeks, and they were tied to the European problems, but that was shrugged off relatively quickly and I don’t think it played much of a factor overall.
  4. Blackberry will be history (or RIM will be out of business) – Not so much – Blackberry is still around, and I’ve heard that the next release (Blackberry 10) is thought to be very well designed, and if it is received well, could put Blackberry back on the map.  I personally don’t see much hope here.  In the consumer electronics market, more often than not when customers abandon a particular company to the degree that has taken place with RIM, it’s pretty hard to convince them to come back.  The only big exception in history that I see here is Apple, but I’ve seen Apple, and I’m sorry RIM, you are no Apple.
  5. Apple will either provide a dividend or make a big purchase – Got it right – Apple instituted a dividend for the first time in 2012.   No big purchases, but since it was an either/or type of statement, I got it right.  The stock for Apple has been on somewhat of a roller coaster ride, rising all the way to $700 per share and dropping down to the low $500’s.  I think investors are finally starting to realize that while Apple is a great company that makes wildly popular products, the amount of growth potential may be slowing.  Wall Street investors live and die by growth, so the perception that Apple may have finally hit a ceiling could make for a bumpy ride moving forward.
  6. Unemployment will fall, the economy will improve,businesses will get better, but consumer spending will lag – Got it right – The economy has definitely continued to improve, and business profits have improved, but not to the robust levels that would indicate a long term healthy economy.
  7. Oprah will lose her network – Not so much – She still has her TV network, but the fact that I had to look this up to see where this stood, well it’s still not doing so well.  I know Oprah said that she wanted to put more of her ‘presence’ into the network this year, and I’m guessing she did that, but to what degree this matters, I really do wonder.  Before she shut down her talk show, you used to hear about Oprah in some fashion all the time.  Her opinion and voice was right up there in the cultural fabric.  Now, I think her voice has lost a lot of luster, so while she still has her ‘own’ network for now, I clearly think it’s been a disaster.

Five out of seven, or just over a 70% ‘success’ rate was how it worked out for my predictions.  That’s not too bad!

How did 2012 turn out for you personally and how did things around the world play out from what you had thought would happen in 2012?

What topics do you think I should predict for 2013?

7 Predictions For 2012

Many bloggers are posting predictions for 2012, so I thought I’d throw my hat in the ring.  Hopefully I’ll remember at the end of the year that I did this and will take the opportunity to look back and see how I did.

  1. President Obama will be re-elected – I don’t think Obama has done a great job while in office.  He ran in 2008 on a campaign of ‘change’ and began a ‘business as usual’ approach the first day he stepped into the Oval Office.  Regardless, the economy has improved, unemployment has gone down, and the Republican party is anything but united, which in my mind will add up to a second term for Obama.
  2. The tide will begin to turn on strategic defaults and underwater mortgages – Last I saw, roughly 22% of mortgages were underwater, and many of those homeowners have continued to choose to give their homes back to the bank.  I see both of these numbers slowing down for a couple of reasons.  First, I think the real estate market has finished it’s free fall.  Prices may not go up for awhile, but a stabilization in prices will take some of the fear of the unknown away.  Second, people that are paying their mortgages are gaining traction.  Simply put, if people make their payments while the value of their home remains stable, they will start getting closer to positive equity.  For those who have stuck with their homes for the last few years, this glimmer of a light at the end of the tunnel will reduce the temptation to ‘walk away’.  Third, low interest rates and an easing of the HARP program will make re-financing a continued option that can allow homeowners to more pay less interest.  Personally, I wish that one stipulation would have been (for those who have not suffered income loss) that in order to take part in this, you had to re-finance such that your monthly payment remained roughly the same, meaning that you would merely shift payment from interest to principle, thus providing more infusion of equity into the housing market.
  3. The Eurozone crisis will not go away but will get less attention – The financial crisis of the Eurozone created an enormous amount of volatility in the stock markets in 2011.  Positive news one day would send markets soaring 3%, only to have that entire gain wiped out the next day when negative news came back to the forefront.  This happened over and over again. I don’t expect the news to change much, meaning that we won’t see a ‘solution’ but we also won’t see any catastrophes, but even though things won’t change, I expect investors to start tuning out the news a little bit, reducing some of the market swings that have been tied to Europe.
  4. Blackberry will be history (or at least RIM will be) – Blackberry was once the darling of the smart phone industry.  You didn’t have a smart phone unless you had one.  Now, they’ve been passed by and many owners (myself included) are merely counting the time until they can upgrade (six months and two weeks!).  I expect that Research In Motion will either sell out or declare bankruptcy.  Carriers will continue support for legacy products and new devices could even roll out if another company purchased them, but I expect that RIM is done by the end of the year.
  5. Apple will either provide a dividend or make a giant, unexpected purchase – Apple is sitting on nearly a hundred billion dollars in cash.  Something has to give.  I expect that they would either start answering to investor pressure to release a dividend, but I have a feeling that they could shock the world with a purchase of a company or technology that nobody sees coming.  I have no speculation on what that might be (and no, RIM wouldn’t count!) but I have a hunch they want to show the world that they plan on continuing to make headlines even after the passing of Steve Jobs.
  6. Unemployment will continue to dip, the economy will continue to improve, the bottom line of businesses will get better, but consumer spending will lag – That’s a lot rolled into one, but I think the first three tie together.  What may surprise out of all that would be the consumer spending element.  Maybe I’m being too optimistic, but I see consumers taking the opportunity to de-leverage (pay down debt) as part of a way to apply the extra income that would result from the other items mentioned (namely the reduction in unemployment).  While not everybody will follow the model, there are enough people who have gotten into debt either because of foolishness (taking advantage of easy credit and getting in over their heads) or necessity (having to charge expenses just to put food on the table), and people will take advantage of an improved opportunity to get out from under the burden of that debt as well as take measures to ensure that it doesn’t happen again so much that consumer spending will not rise as fast as other key indicators.
  7. Discovery will pull the plug on Oprah – Oprah has tried to do something that no other person ever has, make an entire TV network work on the back on her brand name.  It hasn’t worked so far and despite a committment by her to get more involved, I feel it will be too little too late, and the OWN network will be bid adieu by the end of the year.

What do you think of the predictions above?  How would these predictions impact you?  What are your predictions for the rest of 2012?