02.27.2013

How’d I Do?

02.27.2013
Terry Flanagan

With this in mind, let’s review my fearless predictions for 2012 made on these very pages in January 2012, and dole out some grades.

I said…

The U.S. stock market will have a reasonably steady 2012 with no major incidents or meltdowns, and end the year up in the order of 15-20%.
What happened…

The Standard & Poor’s 500 generated a total return of 16% in 2012.
This was my best prediction. The number was spot-on in my range, and it was in fact a reasonably steady year in the market with none of the major incidents or meltdowns that had occurred in previous years.

But, I must concede that my prediction implied more bullishness than was actually seen in too-quiet 2012, so I lose points there.
President Obama will win re-election.

Calling a win for the incumbent isn’t exactly going out on a limb, but Obama was running about even with Republican front-runner Mitt Romney at the time, so I got this coin toss right.

A second Obama term will be more business-and market-friendly.

Obama’s second four-year term didn’t even start until January 20, so I have to take an Incomplete grade on this one. I do believe very-early indications show some promise, as the President recently has shown a willingness to compromise with Republicans and engage business leaders more. But time will tell.

Financial regulation will be less of a factor than is commonly expected.

This prediction is a bit squishy to assess, as both the factor and the underlying expectations are subjective measures. And there’s also a substantial lack of finality to this, making any assessment all the more tricky. I will say that my main point was that new regs wouldn’t be the onerous burden that some market participants seemed to expect, and I think this view has held true so far.

Exchange consolidation will continue in some way, shape, or form.

This was probably my second-best prediction, as one year ago Deutsche Borse’s proposed acquisition of NYSE Euronext was teetering on the brink of derailment, the latest in a string of failed exchange mergers.

Not much happened on this front—at least in a high-profile way—until December 2012, when IntercontinentalExchange said it would buy NYSE Euronext for $8.2 billion.

Granted I didn’t exactly go out on a limb with this call, rather it represented the distillation of knowledge I get from the many smart people I speak with on a regular basis. But it’s nice to be able to say I nailed it.

The New York Giants will win the Super Bowl.
Okay, this one’s not as impressive as it sounds, as it was made a week before the game, when the Giants and the New England Patriots were the only two teams left standing. But like the Obama re-election call, I got this coin toss right, which sure beats getting it wrong.

I give my predictions a B grade overall, maaaayyybe a B+. My prognostication showed enough to beat a C, but there wasn’t enough ‘oomph’ or contrarianism to warrant an A. I do derive some personal gratification from making some decent calls when others didn’t do as well: “Almost All of Wall Street Got 2012 Markets Calls Wrong,” blared a Bloomberg headline from January 4, 2013.

But I think I’ll take this year off from the prediction business—rather, in the spirit of our bimonthly magazine, perhaps I’ll resolve to make predictions biannually.

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