In the spirit of the New Year, I’m reviving my theme from last year – crazy possibilities. These are the “what if’s” and “why not’s?” that Americans live for. Think of them in the same light as that promising biotech penny stock you bought on your brother-in-law’s recommendation that hasn’t quite panned out, or the lottery ticket you pick up at the cornrner story every now and then. It’s not likely, but hey, it’s possible.
For 2020, the list isn’t really crazy, just unlikely – and certainly be entertaining if they happened!
Trump Chooses Kanye West as Running Mate
Mike Pence appears to be a nice, principled guy. Many people disagree with him, of course, but they understand who he is, how he works, and what he will do. All of which makes him incompatible with President Trump’s seat-of-the-pants, whatever-comes-to-mind style of governrnance. Searching for a running mate that can move as fast as he does, and one that might give him more support with the black vote, Trump recruits music star Kanye West, who’s not only married to a Kardashian, but also recently turnrned his back on pop music when he found religion.
In Kanye, Trump could produce a hat trick, earnrning points with a minority voting bloc, social media followers, and the evangelicals all at once. Besides, it’s obvious the two have a bromance going on. They should spend more time together.
As an offshoot of the new pairing, Melania Trump and Kim Kardashian start a new clothing and make up line called Stronger, playing off of Kanye’s hit song. Understandably, they don’t reference most of his other work.
Electric Cars (EVs) Perform as Advertised
Paying pennies to charge your car and almost nothing on maintenance sounds great, but the reality of owning an EV is a bit different. From waiting more than an hour to access an ironically-named fast-charging station to vehicles that suddenly “brick” and must be towed for simple things such as dead batteries and flat tires, EVs fall short in the real world. But in 2020, Elon Musk and his ilk announce that they’ve unlocked their vehicles to give consumers control over maintenance issues, and they’re partnering with McDonalds and Walmart to put fast-charging stations about every 6 blocks across America.
Ford and GM immediately breathe sighs of relief because the changes to the industry make their business plans, which call for heavy EV investments, viable. They won’t make profits, but at least they won’t lose billions of dollars.
Small Oil and Gas Companies Earnrn Profits (It Could Happen)
U.S. Energy exploration and production companies, famous for introducing the word “fracking” to our lexicons, shut down enough production to lower supply and raise energy prices. Many of the small firms run out of cash and go bankrupt, but the survivors consolidate and create a more stable energy complex across America. The Saudis are happy because it increases the value of the recently-IPO’d Saudi Aramco company, but American drivers are miffed because they have to pay $2.75 per gallon for gas. Sure, even at that level gas prices remain near their lows of the last decade, but that’s yesterday’s news.
Banks and bondholders suffer with defaults, but are thrilled the industry appears to bottom.
Andrew Yang Wins Democratic Nomination, Picks Marianne Williamson as Running Mate
Andrew Yang, the forgotten Democratic Presidential candidate who continues to make the debate stage because he promises universal basic income, surges to the top of the list as Bernrnie crashes for health reasons, Warren sputters after letting it slip that she wants the nation to be a giant collective where she decides who gets paid what, and Buttigieg decides to retire and write a book about what he learnrned as the Mayor of South Bend, Indiana. (Biden failed because was too busy explaining why his intervention in Ukraine was obviously different than Trump’s.)
Yang decides to take Williamson as his running mate because she’ll bring a ton of “positive energy” to the campaign, and can hopefully spread her message of joy across the nation. She makes her quote, “Joy is what happens to us when we allow ourselves to recognize how good things really are,” the campaign slogan.
Finally, Britain Leaves the EU, and No One Cares
This is a repeat from last year. It could happen.
A Little Less Crazy
With equity markets up around 30%, we’ve pushed valuations to very high levels even as profits remain flat and GDP growth eased. I’m glad we remained invested in our Boom & Bust portfolio, taking advantage of the market growth that we expected and Harry forecast. Now we’re more cautious, and looking to protect our gains as we start the New Year and the new decade.
Buckle up, we expect a bumpy ride in 2020!
Happy New Year.