Byron Wien

Byron Wien 10 surprises for 2013 updated list was made available yesterday. The Blackstone Group L.P. (NYSE:BX) Vice-Chairman released his annual Surprises list about a week ago, but this morning he has updated his list. His Ten Surprises list includes things the average investor gives a one out of three chance of taking place, but which he thinks are probable. Here are his updates from his conference call Thursday afternoon.

  1. Iran will be able to make a nuclear weapon, so we need to be able to contain it instead of prevent it.

  2. S&P 500 (INDEXSP:.INX) earnings will go down this year. They have been decelerating since October, and 61 percent of the companies on the S&P 500 (INDEXSP:.INX) did not meet their third quarter sales estimates, which is usually a precursor for disappointment in earnings. He expects earnings will be $95 or less compared to $100 in 2012. He also thinks the S&P will touch 1,300 at some point this year.
  3. Financial stocks will suffer. “They are no longer as egregiously undervalued as they were at the end of 2012,” Wien said.
  4. The price of oil will continue to fall. He predicts it will go down to $70 per barrel, partially because of reduced demand but mostly because of “vastly increased production.”
  5. The Republicans will focus on citizenship for the Hispanic population in order to win their vote. If they don’t win the Hispanic vote, they won’t be able to win future elections.
  6. China’s leaders will implement reforms, especially focusing on corruption and stimulating the economy through both monetary and fiscal policy. He expects the Chinese economy to grow 7 percent and A shares to rally and grow by up to 20 percent.
  7. Commodity prices will continue to rise. He expects an increase of $1 for corn, wheat, and cattle because of increased droughts and crop failures.
  8. Gold will reach $1,900 per ounce again, a number it hasn’t been at for two years.
  9. The Japanese yen will depreciate to 100 to $1 and the Nikkei 225 will get to 12,000. He expects the new Japanese prime minister to “take a more aggressive approach toward getting that economy to come alive.”
  10. Europe will “continue to muddle through.” He predicts it will be in a shallow recession this year while the U.S. will grow. He expects a 10 percent decline in European markets.

The main thing that changed from the list Wien released a week ago is the addition of his prediction that oil prices will keep falling. He listed that in place of the Democrats working on making the U.S.  independent of oil imports from the Middle East by 2020.

Wien left his list of “also-rans,” the same. “Also-rans” are ideas he has that he doesn’t believe have a 50 percent or greater probability or that he doesn’t see as important as his top ten. Here is the list he left unchanged in Thursday’s conference call:

  1. The markets will see more volatility. He expects the VIX, which is around 13, will go as high as 30.

  2. More effort will be made on gun control, although the National Rifle Association is more organized than those working to make gun control laws stricter, so they won’t be successful.
  3. Congress will begin to look for other forms of taxation, like a value-added tax and a wealth tax.
  4. Congress will begin to talk about high-frequency trading and possibly try to put a transaction tax on intraday trading, although it will be unsuccessful.
  5. Technology saturation won’t affect Apple Inc. (NASDAQ:AAPL), which will sell its products overseas. However he believes social media, computer hardware and semiconductor stocks will suffer.