Byron Wien, Vice Chairman at Blackstone Advisory Partners, went back over his Ten Surprises of 2013 at a closed conference on October 3, and while we don’t have the transcript to know how he rates his own performance, we decided to follow his lead and see how he did.
Byron Wien on Iran’s nuclear weapons
“Iran announces it has adequate enriched uranium to produce a nuclear-armed missile and the International Atomic Energy Agency confirms the claim.” It’s possible that Iran has enough enriched uranium, but they haven’t announced it, and the IAEA hasn’t confirmed it.
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“A profit margin squeeze and limited revenue growth caused 2013 earnings for the Standard & Poor’s 500 to decline below $100, disappointing investors.” The S&P 500 (INDEXSP:.INX)’s surge this summer went too far and needed a downward correction, but investors certainly weren’t disappointed.
Byron Wien on oil imports
“The Democrats sponsor a vigorous program to make the United States independent of Middle East oil imports before 2020.” West Texas Intermediate crude has risen pretty steadily all year, and Democrats are more concerned with problems surrounding fracking than energy independence.
“The Republicans make a major effort to become leaders in immigration policy.” Marco Rubio has tried to move the part on immigration, and if he runs for president as people expect, he may try again, though the idea hasn’t gained much traction on the right.
Byron Wien on corruption in China
“The new leaders in China seem determined to implement reforms to root out corruption, to keep the economy growing at 7 percent or better and to begin to develop improved health care and retirement programs. The Shanghai Composite finally comes alive and the “A” shares are up more than 20 percent in 2013.” Keeping growth from falling too quickly has been a near obsession of the Chinese government, and they have arguably tried to combat corruption, but the Shanghai Composite has been down since the beginning of the year.
“Climate change contributes to another year of crop failures, resulting in grain and livestock prices rising significantly.” Grain prices are still a bit high from the 2012 drought, but this year had a good harvest and grain prices are falling.
Byron Wien on gold prices
“Although inflation remains tame, the price of gold reaches $1,900 an ounce as central bankers everywhere continue to debase their currencies and the financial markets prove treacherous.” Inflation is still incredibly low, and Japan has certainly debased their currency, but gold has fallen steadily all year.
“The Japanese economy remains lackluster and the yen declines to 100 against the dollar. The Nikkei 225 (INDEXNIKKEI:NI225) continues the strong advance that began in November and trades above 12,000 as exports improve and investors return to the stocks of the world’s third largest economy.” The yen is currently down to 98.5 against the dollar, and the Nikkei 225 is above 14,000, so Wien hit this one on the head.
Byron Wien on European structural problems
“The structural problems of Europe remain largely unresolved and the mild recession that began there in 2012 continues.” The recession seems to have ended, though the recovery is certainly fragile, but many analysts think Europe’s structural problems have simply been papered over and will come back to bite them.
So one solid hit and a couple of near misses—not terrible considering it is a list of predictions meant to buck the consensus.