LiteHedge Predictions For 2019 — Housing, FANG stocks, Cryptocurrencies & Trump

Before we begin, this is NOT financial advice.

As we edge closer to the end of 2018, we can reflect on the mess that loose lending has created, the undeniable euphoria that exists and the asset bubbles (some that have risen and fallen).

Here are some anticipated events that LiteHedge expects to see commencing in 2019:

• Higher interest rates (normalizing)
• Global house prices to tank (sort of already started)
• Nvidia & AMD to fall significantly in the short term (tech stocks in general)
• Netflix, Tesla & Amazon to lose more than 30% in value
• Cryptocurrencies to recover (we’ll come back to this later)
• WTI to approach $100 (commodities in general)
• Trump to serve a second term (LiteHedge neither supports nor opposes Trump)

Now you’re probably wondering, what is the reasoning behind these absurd predictions? As with any analysis, there are of course flaws and assumptions attached, otherwise economists would top the Forbes rich list instead of tech dudes.

The Fed is determined to bring rates back to levels we have not seen since the days when taking a selfie in public was still somewhat embarrassing and Myspace was still a thing. Interest rates are going up whether you can afford it or not. To those borrowing funds, it’s bad news, which brings us to the second point of global house prices.

As previously mentioned in our blog, there is an inverse relationship between interest rates and house prices; meaning if one goes up, the other usually goes down. We’ve seen record low interest rates which have fueled house prices since the global financial crisis.

Not only has the cost of housing exploded, the stock market has also experienced exponential growth. This is as sustainable as trying to boycott Nike’s Colin Kaepernick ad campaign (which saw sales increase by over 30%).

For those of you that follow graphic card stocks, Nvidia & AMD are kind of a big deal. So why would their values decline if they’re so great?

Because along with the rise and fall of cryptocurrencies, these stocks have seen the rise, but have yet to see the fall. Now it isn’t all bad news, because in the event of a crisis, we would expect investors to flock to safe haven assets right?

Enter cryptocurrencies.

After the astronomical rise late last year, cryptocurrencies are seeing value drops that would make your eye water. Ethereum has dropped by more than 80% since May last year:

And Ripple has wiped 90% of its value in the same period.

Despite these drops, this isn’t the end of cryptocurrencies. Going back to safe haven assets, this is where cryptocurrencies can shine.

Assuming oil is still considered a commodity by then, with ‘scarce’ supply, we would expect prices to rise in the event of a crisis. Which brings us to the final point, President Trump.

Without being biased, there is one thing most people would agree on: he is stubborn, which occasionally results in him getting s**t done (albeit sometimes destroying things in the process, but nonetheless, making changes).

Whether or not he gets re-elected is anyone’s guess. But if Kim Kardashian is running for president, I’m putting my bets on a second season of ‘The Apprentice’ rather than ‘Keeping Up With The Kardashians’.

“If Hillary Clinton can’t satisfy her husband what makes her think she can satisfy America?” — President Trump (2015)

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Actual results may differ from those projected and therefore no guarantee is implied as to the accuracy of specific forecasts, projections or predictive statements.