2022 is a challenging year for investors. SPY 0.00 returned -19% in 2022 while QQQ 0.00 returned -33%, the worst since the great recession in 2008. I hope I am wrong but I believe the downward trend will continue in 2023 as the zero interest rate era comes to an end and asset prices reset to levels reflecting proper risk/reward characteristics. With that, here are my five predictions for the investment and tech world in 2023.
S&P 500 will set new lows in 2023 since the ATH in December 2021. AAPL 0.00 stock will go under $100. The CAPE ratio is still too high and SPY 0.00 is due for a further correction.
Crypto winter continues. The DCG situation is still not resolved. Tether and Binance are ticking time bombs. It’s quite likely that BTC will go below $10,000. But BTC will probably rebound eventually as it goes through another boom/bust greed/fear cycle.
Cloud stocks stabilize. Cloud stocks crashed hard this year. But because they went down so much, I believe they will actually do better next year. I predict the average return of ZM 0.00 , OKTA 0.00 , DOCU 0.00 , PLTR 0.00 , and TWLO 0.00 will beat SPY 0.00 in 2023.
Instacart IPOs with a sub $10B valuation. Companies like Instacart really need to IPO so the employee RSUs don’t become worthless. I believe the IPOs will happen but the valuations will be disappointing to many investors. The lower IPO valuations will continue to cause a chain reaction to the startup valuations in earlier stages. Many startups will fold. It will be another tough year for venture capital.
Civil Unrest in China. After a couple of COVID waves, China will start to return to normal. But too much damage has been done to its economy and its financial system and real estate market are on brink. The majority of Chinese citizens are already experiencing financial hardships and many local governments are bankrupt. All these financial troubles could lead to major civil unrest and how CCP handles it could determine the fate of China and the global economy.
I will elaborate on each prediction next week. But the general theme is that 2023 is a continuation of 2022. It’s not going to be pretty but we all have to go along with it. No matter what happens, I am sure it will be a great learning experience for all of us.