Every year for the past 36 years, Blackstone’s legendary Byron Wien commits to paper for all the world to see, 10 surprises he believes have a greater than 50% chance of occurring throughout the economy, the financial markets, and world politics. This week, just like the last 36 years, Wien put out his ten surprises for 2018.
We’ve seen a lot of commentary by people in the mainstream media bashing Wien’s list, arguing none of Wien’s predictions come true and insinuating that Wien is over the hill regarding his prowess to give insightful and unique perspectives regarding markets. We disagree.
By a conservative estimate Wien correctly predicted over half of his 10 surprises for 2017. This is without mentioning that Wien himself states that this list is not intended to be taken as gospel, but is instead intended to expand the thinking of investors. Each item on his list he believes has a greater than 50% chance of happening.
So, let’s take Wien’s annual list in context and use it for it’s intended purpose: To charge us to expand our thinking and consider different perspectives from a legend of his craft. We’ll all be better for it. Below are a few of Wien’s points that jumped out as particularly interesting and worthy of thinking about as we head through 2018. Be sure to follow the link at the bottom of the page for the full list on Blackstone’s site.
# 2) The combination of tax cuts on corporations and individuals, more constructive trade agreements, dismantling regulation of financial and energy companies, and infrastructure tax incentives pushes the 2017 real growth rate above 3% for the U.S. economy. Productivity improves for the first time since 2014.
# 5) Increased economic growth, inflation moving toward 3%, and renewed demand for capital push interest rates higher across the board. The 10-year U.S. Treasury yield approaches 4%.
# 8) Donald Trump realizes he has been all wrong about China. Its currency is overvalued, not undervalued, and depreciates to eight to the dollar. Its economy flourishes on consumer spending on goods produced at home and greater exports. Trump avoids punitive tariffs to prevent a trade war and develops a more cooperative relationship with the world’s second largest economy.
Link to the full list and source for this article: https://www.blackstone.com/media/press-releases/byron-wien-announces-ten-surprises-for-2017