World has started celebrating end of 2020 and start of new year 2021. While 2020 was an interesting year, I am not going to list down all the aspects of 2020 - you can read my previous blogs for that. Let's look at 2020 report card on my predictions and recommendation I made in "2020!" and make new ones for 2021.
2020 Report Card:
Macro Predictions:
All the macro predictions were thrown out of the window since start of COVID pandemic in March. Interest rates are close to zero after multiple cuts by Fed, economy went into shortest recession, unemployment is near 7%. Despite all of these, S&P managed to beat my prediction of 3450 by nearly 10%. And Biden not only became nominee but also won well deserved US Presidency.
Stock Recommendations:
When it came to stock recommendations, I would say I must have gotten lucky since even I did not expect the way sone of the stocks like NIO, ZS, ROKU and even bigger ones like AMZN, APPL, NFLX, MSFT performed. If one had invested equal amount in each stock and held thru all ups and downs, the performance would have been as follows (not counting any dividends). Overall portfolio return would have been 115%. Disclaimer: I personally did not had the discipline of holding these (sold NIO way too early) so my personal portfolio did not do as well (but did manage to beat S&P handily)
| Symbol | Total Chg % |
| NIO | 1418% |
| ZS | 329% |
| ROKU | 155% |
| AMD | 95% |
| AMZN | 78% |
| AAPL | 72% |
| NFLX | 66% |
| SMH | 59% |
| XBI | 54% |
| IGV | 49% |
| MSFT | 41% |
| DIS | 32% |
| SAGE | 20% |
| NTNX | 1% |
| GE | -8% |
| NKTR | -15% |
| BIIB | -16% |
| MYGN | -27% |
| CLVS | -43% |
| ITA | -58% |
| Total | 115% |
I don't expect this to repeat. It was part of luck and part of pandemic related market advances.
Let's make some 2021 predictions and recommendations:
Macro predictions:
- COVID infections would be around 150-200M worldwide
- Developed countries would be 60% vaccinated and rest of the world would be less than 50% vaccinated
- Fed would hold interest rates at current level for all of 2021
- 10 year yield would be between .9 to 1.4%
- Unemployment would be between 5-7%
- US GDP growth would be between 3-5%
- President Biden would try to push for another stimulus in first half of 2021
- In-class schools and colleges would open partially in late Spring and fully in Fall
- Officially Pandemic may be over by end of 2021
- S&P would cross 4000 during the year but would end year with single digit return (6-7%)
Stock/ETF recommendations:
This time the theme is similar to BEST with some changes:
- Biotechs and Banks: I continue to believe in Biotechs and banks would finally do well as economy recovers
- CLVS ($5), TBIO ($18)
- WFC ($28), SQ ($200)
- Entertainment and Energy: Both industries are going thru major transformations and provide good growth and value plays
- OKE ($36), XOM ($39), VLO ($50), NIO ($40)
- VIAC ($34), CMCSA ($50)
- "Streamlining" of Economy: There are many sectors like malls, cruislines provide good value bet on survival and economy opening up
- WMT ($140), SPG ($80), MAC ($10), CCL ($19), BA ($200)
- Growth Tech with Reasonable Value: Compared to recent IPO valuations of 50-100 price to sales valuations, these growth stocks look reasonable.
- AAPL ($125), CRM ($220), BABA ($220), AMD ($85), UBER ($45), TWTR ($50)
- ETFs: This is best way to invest to avoid single stock risk and still get good exposure.
- XLK ($125), XLE ($36), XLF ($28), XBI ($130), SPY ($350), IWM ($180)
Same as last year, I have provided target buy prices which are lower than what they are trading because I strongly believe that markets are near all time highs right now and in first quarter, there would be enough opportunities to buy these recommendations at prices mentioned. So one has to be just patient. As always, usual disclaimers apply. Do your own due diligence before investing.
Have Safe, Healthy and Happy New Year 2021!
/Shyam
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