Byron Wien, Vice Chairman of Blackstone Advisory Partners, yesterday issued his list of “The Ten Surprises for 2013″. This is the 28th year Byron has given his predictions of a number of economic, financial market and political surprises for the coming year. Byron defines a “surprise†as an event which the average investor would only assign a one out of three chance of taking place but which he believes is “probableâ€, having a better than 50% likelihood of happening.
Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley. He joined the Blackstone Group in September 2009.
Firstly, how did he fare last year? In short, he hit bulls-eye with three items, was partly correct with five and got it wrong twice Here is a short summary, courtesy of Business Insider:
Right:
- Oil price declines to $85.
- S&P 500 Index heads above 1,400.
- Europe finally develops a long-lasting plan.
Wrong:
- The computer becomes the new weapon of choice.
- Congress finds a way to cut $1.2 trillion over 10 years.
Partly right:
- Real GDP growth exceeds 3%; unemployment drops below 8%.
- Obama beats Romney, Dems win House, GOP wins Senate.
- Investors shift currency buys to Australia, Scandinavia, Singapore and Korea
- The Arab Spring matures: Al-Assad is deposed, and Hamas, Hezbollah and Iran are weakened.
- Indexes in Brazil, China and India gain more than 15%.
Surprises for 2013
1. Iran announces it has adequate enriched uranium to produce a nuclear-armed missile and the International Atomic Energy Agency confirms the claim. Sanctions, the devaluation of the currency, weak economic conditions and diplomacy did not stop the weapons program. The world must deal with Iran as a nuclear threat rather than talk endlessly about how to prevent the nuclear capability from happening. Both the United States and Israel shift to a policy of containment rather than prevention.
