How Did Our 2020 Forecasts Turn Out?

 
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A Last Look at How Our 2020 Forecasts Turned Out

Matthew Carr | Chief Trends Strategist | The Oxford Club

Matthew Carr

This year is finally over... 2020 is coming to an end!

One of the most infamous years on record is taking its final breaths. And I have little doubt that it will be the center of debate for generations.

But 2020 wasn't all bad news and drama. Energy and Infrastructure Strategist David Fessler and I made a few predictions back in January. And despite the ups and downs, our forecasts for the year were pretty spot-on...

No. 1: The Stock Market

In January, I predicted the markets would struggle in 2020. COVID-19 was just a blip at that point, but historically, election years are full of volatility, and we were in the midst of the never-ending trade war with China.

Dave's forecast was more modest, but he said, "I think tech will continue to dominate sector gains, as it has for the past 10 years."

My colleague couldn't have been more right. As the Nasdaq set new all-time highs, the Dow Jones Industrial Average and S&P 500 faltered.

No. 2: Cannabis

I stated, "2020 should be a more positive year as 'Cannabis 2.0' gets up and running in Canada and as U.S. multistate operators focus on sales, not expansion."

The U.S. cannabis sector proved its resilience as shares of multistate operators set new highs. The U.S. Marijuana Index gained only 5% year to date, but it more than doubled from its lows in March. And the enthusiasm continued to percolate with five more states approving legalization in last month's election.

No. 3: Gold

Dave and I differed on the issue of gold in 2020. He saw gold remaining flat. I saw it putting together a glittering performance fueled by volatility.

The precious metal rocketed to new all-time highs near $2,100 per ounce and is now up more than 25% on the year... outperforming blue chip indexes such as the Dow and S&P.

 

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No. 4: Bitcoin

All the way back in January, I said...

It doesn't grab many headlines, but at one point in 2019 the cryptocurrency was up 298%! And it ended the year up roughly 100% - more than several times the performance of the stock market. I think Bitcoin, with a reward halving just months away, is going to be more explosive in 2020.

And, just as we've seen in years past, this is exactly what unfolded. Bitcoin more than doubled from $6,955 to near $14,000. I think we could see it continue on its way to new all-time highs.

No. 5: Crude Oil

Now, this is a messy one.

I pointed out that the global crude oil market was oversupplied heading into 2020. And when there's a glut, prices collapse. I forecast crude tumbling below $40 per barrel this year.

Dave believed we'd see range-bound prices.

What we got was a historic drop into negative territory for crude. Demand imploded due to the pandemic. The entire market buckled.

Prices eventually recovered but were largely range-bound between $30 and $40.

Goodbye, 2020. Hello, 2021.

Our forecasts were mostly on target for 2020 - even though we couldn't have predicted the drama that unfolded. Our ability to research and dig deeper into the data showed the cracks that were forming even before COVID-19 reared its ugly head.

Dave and I have worked together for more than a decade. As with any two people who've had a friendship for that long, sometimes we agree... and other times we don't. And we're not afraid to voice our thoughts either way.

We both kicked off the year by saying, "Don't expect a boring 2020. There'll be a deluge of information to digest."

Little did we know what an understatement that would be...

Moving forward, we're welcoming 2021 with open arms. We'll be watching cannabis, new technologies, vaccines, the presidency turnover and more.

Here's to saying goodbye to 2020 and hello to new opportunities in 2021!

Here's to high returns,

Matthew

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