Nystrom - 2003 Predictions Recap

December 31, 2003

Well it’s that time of the year again, time to take account of the year, and see how the old predictions on the website turned out. I recently dialed up my page of 2003 predictions for the first time in about 6 months to see how I did. Boy, was I ever wrong! Did I write that? I see why I hadn’t looked at the page for the past 6 months, because I was well off the mark. Thank goodness I hedged my bets at the top with this nice quote:

Predictions of the future are never anything but projections of the present...that is, of occurrences that are likely to come to pass if...nothing unexpected happens; every action, for better or worse, and every accident necessarily destroys the whole pattern in whose frame the prediction moves and where it finds its evidence.
- Hannah Arendt

In spite of my batting less than .500 this year on the predictions, it is still a nice (if painful exercise), this writing of predictions. In undertaking this exercise year, I’m reminded of all the things that I did not predict last year, of all the things I had no idea were in store for me personally. For example, I did not predict that I would get married – had no idea it was coming late last year. Nor had I any clue that I would move to Taiwan later in the year, but here I am. And at the time, I was an unemployed web designer, so how could anyone have predicted that I would end up in Hsinchu Taiwan, working for ITRI, one of the largest and most innovative research institutes in all of Asia?

But enough about me. Lets talk about me. Err…the predictions, that is. First a recap of last year. I waxed poetic in explaining my positions, but in the end went on to do what everyone does when making predictions – that is, I predicted the past, not the future. I extrapolated the present, with all of my biases, straight out into the future.

Here is the executive summary of my predictions:

1. American bombs falling in Iraq in the first quarter of the year
2. Declining interest rates
3. Declining value of the dollar
4. Declining price of gold
5. Declining oil prices
6. Declining housing prices
7. Dow decline to 6000 or below
8. SPX decline to 600 or below
9. Nasdaq decline to 999 or below.

And here is the executive summary of my results:

1. Yes
2. Yes – Until June. Then they started to rise again.
3. Yeeessss.
4. Noooooo.
5. no
6. no
7. no.
8. no.
9. no.

So, three out of nine has me batting .333, which would put me into the hall of fame, if I were a baseball player. Babe Ruth hit .342 lifetime and knocked 714 balls out of the park, but whiffed almost twice as many times -- 1330. Just keep that in mind as we enter the new year. It doesn't matter if you get everything right, but just make sure that what you get right counts!

For the time being, I'm taking a zen approach to my predictions for 2004, and I have but one prediction:

1. Unpredictable things will happen. Many of them.

However, seeing as it is that I'm now living in China, I'll debut my new, well thought out, well ruminated predictions at the Chinese lunar new year. Watch this space!

Best regards for a happy, healthy and prosperous 2004!

Michael Nystrom

Posted by manystrom at December 31, 2003 03:21 PM

If people would read history, especially as it pertains to the period between 1932 and 1940, they would be amazed at the similarities between FDR's economic policies and the Bush administrations economic policies.

Low interest rates, government spending on defense and back to work programs, low dollar, all with the intent of stimulating the economy. It worked for awhile until near the end of 1936, when another depression seemed to be just over the horizon. Of course it was called a resession because depression sounded too severe so soon after 1929-32. If you could overlay this economic recovery and stock market rally onto the period between the 1932 low and the 1936-37 high, what's happening today may seem more in focus.

Remember, Roosevelt removed the gold standard so that he could inflate the economy, and I read somewhere that he ordered livestock slaughtered in order to keep prices from falling. This was done in a vane attempt to maintaine prices at higher levels.

Let history be our guide.

Remember folks, fear of a depression has no political party loyalty. But you can be reasonably certain that the actions taken are politically motivated.
Just my opinion, but they are based on some historical perspectives.

Posted by: Rick Lawson at January 5, 2004 02:04 AM
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