Podcast Episode 36: The Predictions Episode | Peer Into the Crystal Ball With Us

Oh, predictions. You know we’re a little too pragmatic to whip out the tarot deck and start making sweeping proclamations. However, it might surprise you to know that we’re doubling down on what we think are some things that are pretty much guaranteed to come true in 2022. Have a listen and let us know if you agree.

Episode Transcript

BARENAKED MONEY PODCAST: EPISODE 36

The Predictions Episode | Peer Into The Crystal Ball With Us

Announcer:
You’re about to get lucky with the Barenaked Money podcast. The show that gives you the naked truth about personal finance with your hosts, Josh Sheluk and Colin White, portfolio managers with WLWP Wealth Planners, iA Private Wealth.

Josh Sheluk:
Welcome to Barenaked Money, the first edition for 2022. I was looking back how long we did 35 episodes of 2021. Not too bad, you think we can be it this year?

Colin White:
Well, I’m up for a challenge. Let’s give it a shot.

Josh Sheluk:
Not a bad day to do a podcast with minus 20 weather here and a bit of on the ground.

Colin White:
Oh absolutely. It’s a little bit the wintry outside. So let’s see if we can cheer people up Josh and give them some entertainment. Yeah, what do you want to throw at me today?

Josh Sheluk:
Today we’re starting the year off as we should with a prediction podcast. We have 10 amazing predictions for this year that I’m pretty sure every one of them going to come through.

Colin White:
Well, let me start with the first disclaimer at this point of the podcast, don’t make any decisions based on any of the predictions we’re about to make. All right, these are for entertainment value only, and discussion purposes only, do not take any action based on anything you’re going to hear in the next however long it takes us to get through all of our predictions for the year.

Josh Sheluk:
I actually think we have a prediction that’s very related to that disclaimer.

Colin White:
And in true fashion, I only know part of what Josh wants to talk about today. So you’re going to get the raw and real response to the topics he’s going to bring out here. So I’m excited as you are.

Josh Sheluk:
Yeah, great, all right. So prediction number one, in true fashion of us being very transparent, your other sources of predictions will not include any of the predictions that we make.

Colin White:
And see that’s a pretty safe prediction. That’s one that we’re in control of. That’ll say nobody else is going to say, we’re going to say is probably a bit of a stretch, because there’s a people saying lot of stuff, but you’re not going to find us on any of the populists that’s for sure. So I’ll score this as a solid eight out of 10, as far as quality of predictions go, Josh.

Josh Sheluk:
That’s good. I’m glad you’re going to be scoring my prediction ahead of time when neither of us know if they’re going to come true, that’s awesome. I think the reason I came up with this one is because we are both a bit anti prediction. The reason I make this prediction is because both Colin and I, you and I, Colin, we’re both a bit anti prediction. We don’t like predictions. We think predictions are stupid. So we’ve done our best to cut off with unique and unconventional predictions that may have a little bit more meaning in your life.

Colin White:
Predictions are used to get attention. And in order to get attention, you need to be emphatic in your prediction and you try to be impactful with your prediction, which are two things are super difficult to be and to do, yes, we’re playing loosely with the expectations of an audience looking for predictions. So I can’t wait to hear the rest of your list.

Josh Sheluk:
This is a nine out of 10 prediction, for sure. I think Colin number two, there will be market volatility this year. I guarantee it. And especially in-

Colin White:
Well, if you’re going to be doing the scoring too, you really don’t even need me on this podcast. So you got to leave in some of the bed for me to sleep on, but no I’m going to add some color to that because part of this is how people see volatility. If their account goes up every day, this year by different amounts, that’s volatile, but it’s not going to be thought of as volatile by many people. They’re going to soon though, the market wasn’t volatile all this year. So volatility can go either way. The only way that people are really concerned about volatility, if it’s negative and it’s not even really volatile, if it goes down, that’s bad, it goes down in a straight line in a perfectly non-volatile way. That’s bad news. So you want to restate your prediction? Is it just going to go up and down or it’s going to go up and down at varied degrees in an erratic fashion.

Josh Sheluk:
I don’t know. And that’s the beauty of this prediction. I’m not predicting how it’s going to be all time. I’m just predicting that it will be volatile. And I know this for a fact because the stock market’s always volatile. And I always love when people come into to a meeting with me and say, this stock market’s a little bit volatile these days. Isn’t it? I’m Like, yeah, like every other day for the last 150 years, it’s always been the same. And the more that people have their head in their sand, which is actually often a good thing when investing in stocks, the less they really realize it. But the media these days is so good at it as if you always like to poin out, worst day in three months on the stock, they make it sound really volatile sometimes even once.

Colin White:
Well there’s also the other, people feel an obligation to have an opinion on this because you get trained by your environment. So people feel they need to have an opinion on this and therefore they expect advisors to have an opinion on this. Therefore, there’s sometimes we try to, we end up on our hand, I guess I got to express an opinion here, but again, there’s not a whole lot of efficacy to it and go back to the disclaimer at the start. There’s nothing there to make a decision on. Josh has just commented the market’s going to be volatile. That doesn’t mean you should run away from it, run into it, run sideways from it, just an observation purely for it for entertainment purposes.

Josh Sheluk:
Yep, moving right on here Colin number three, you, I, and everyone of our listeners, you will regret an investment non-decision at some point this year, we regret this all the time. You missed out on a fantastic opportunity whether it was Dogecoin, GameStop, Bitcoin. You should have bought Amazon in 2000 when it was $6 a share, should have sold at the top, should have bought a house in January, whatever, you will regret a non-decision at some point this year.

Colin White:
I’ll challenge this one only because you specifically called, I adopted a philosophy a number of years ago that I thought was very helpful, useful, and very freeing to be honest with you. A decision is right or wrong based on the information available at the time you make the decision, the outcome does not validate the decision. And that really made a lot of sense to me. And I found it to be very freeing. So the aspect I may have missed something or something wasn’t perfectly looking back. You know what I, at this stage of my life have been able to abandon that probably 99%, as soon as I said that a lot, I’m thinking, yeah, 1% of the time Josh, there’s going to be that one time this year, I am going to regret something and I’ll be mad at myself for regretting it because that doesn’t really help anything.

Josh Sheluk:
Well, you can let us know on the podcast when you do have that one time, this year, that one out of a hundred regret, it’ll be good. I think to your point, you could jump out of a third story window and come out unscathed. It doesn’t make that a good idea. And just the same that you could cross the street at the crosswalk or the stoplight and get hit by a car that doesn’t make it a bad idea. So we try to focus a lot more on process than outcomes when we’re making investment decisions, especially it’s really important to do that.

Colin White:
Yeah, your friend goes down to the casino and they win big at the poker table that doesn’t make it a good investment. It’s a good story. And he had free drinks while he was doing that or she did. Yeah, but it’s very much part of the human condition. I should have known that the regret there’s been lots of writing done on at the undoing project. If I could just undo one thing, how much better it would be, but then this whole butterfly effect, if you had that one thing, what else could you possibly have gotten wrong? And then you’re off deep into Buddhism or some other philosophical realm that I’m tangentially aware of that we’re not going to comment on in this podcast.

Josh Sheluk:
Yeah, we better move on before this is a four hour podcast on meditation. All right, number four, very precise with this one, Colin, there will be somewhere between 150 and 3 million posts, articles, podcasts, YouTube videos, et cetera, making mark predictions this year and absolutely zero of them will be useful for your investment.

Colin White:
It’s interesting because you trigger something that I was in preparation for this podcast. I went back and I was rereading part of Nate silver’s book The Signal and the Noise, talking about exactly this talking about having an interval and there’s different fields out there. One of them is economics where they typically will express things within an interval and say we’re 90% sure that the outcome is going to be within this interval. And there’s a group of economists that they’ve tracked back in 1968 who have produced predictions on US GDP every year, again with a 90% confidence level, like it’s going to be within a range.

Colin White:
Since 1968 it’s only ended up within their range 50% of the time, they say they’re 90% sure but it’s only turned out to be 50% accurate. So sometimes you’re confident with your age, there’s a whole lot of writing out there about exactly how bad we are at picking those ranges. Now I haven’t taken enough time to explore what was written last year and count how many podcasts and predictions out there last year. And I’m pretty sure it’s relatively impossible. So Josh is going to be right, because nobody’s going to take the time to prove him wrong.

Josh Sheluk:
I’m 90% sure that I’ll be right within that rate, 90% sure.

Colin White:
So there’s a 50% chance he’s right.

Josh Sheluk:
Yeah, if we use the economist as a benchmark, that’s for sure. All right, number five. Politics will come into your realm at some point throughout this year, whether it’s an election or a political decision or a tax decision, that’s driven by politics and this will not have any bearing on our investment in making, nor should it have any bearing on your investment.

Colin White:
The definition of politics and a democracy is that it does come into your world otherwise, what really are they doing? So yeah, this is a pretty self-fulfilling prediction in your part, Josh. But I will point out is as much as we surely the ID, what they announce is going to have an investment in effect certainly in the near term, it to a long time for policies to actually have an economic impact, the ones that do, one thing that they can announce that would have an immediate impact is in the planning front, some of the tax changes to tax code, things of that nature. Those can change how we give advice on a planning perspective, not exactly from picking an investments for sure. So Josh is absolutely right, but it may change how we organize investments or the timing of income or some of those other facets that we can involve the people in the planning side. So yes, your prediction again, I’m going to square this one, nine and a half out of 10, because I never give 10 out of 10. I’m just that guy.

Josh Sheluk:
It’s impossible to have a perfect prediction unless you can see a future, right?

Colin White:
Exactly.

Josh Sheluk:
All right. Number six, this is one that’s close to my heart. We talked about it a lot of times, Elon Musk is definitely going to tweet something this year related to investing maybe about Tesla, maybe about something else, another company perhaps. And it needs to be completely ignored. I’m very confident on that one.

Colin White:
Oh yes, because every time he tweets something, I imagine there’s whole floor on the SEC building somewhere where everybody’s rolling their eyes at the same time going you did what?

Josh Sheluk:
Again, again, how many times do we have to tell him.

Colin White:
See, this is part and parcel like when you come from nothing and you build yourself into such an icon, you have to unrest and when you walk into the room, you walk into the room differently. There is a need of somebody who needs to put a filter on him because-

Josh Sheluk:
Well you can say it, but whether you can, or you should, are two different things.

Colin White:
He shouldn’t be doing that because of the unintended consequences, and I’ll guarantee he doesn’t understand the magnitude of the changes. But there’s also the side as the nefarious side is yeah, maybe he’s using his famed influence things in way that’s personally profitable for him. And I’m not entirely sure that’s the case, because I think he’s a little bit more by the seat of his pants than that. So I think it’s more like just the old expression don’t ascribe to malice it can be adequately described by stupidity. He just doesn’t understand the magnitude of what he’s saying. And therefore it causes good people to have big headaches and people to lose money.

Josh Sheluk:
And there’s a lot of that stuff these days where you’re seeing promotional content from an influencer in some way, whether it’s somebody like Elon Musk, who’s the CEO of a trillion dollar company or a celebrity, an actor, musician, whatever. I don’t know, have you seen those ads for crypto.com? I believe it’s crypto.com with Matt Damon on them.

Colin White:
No, I have not.

Josh Sheluk:
Yeah, I just think this guy is richer than God, he’s here promoting some crypto website. Like he must be getting a pretty good share of the profits of this company in some way. Maybe they’re giving him some equity stake or something along those lines for him to be on here promoting this. It’s the thing we always come back to you. You ought to realize what’s the incentive for somebody to do this. And either they’re getting paid to advertise. They’re getting paid as a sponsor or in some cases like him, I’m guessing he’s actually got an equity stake in whatever they’re doing.

Colin White:
No, you get my expression still holds because you see it all the time. Famous athletes famous [00:13:08], somebody’s an amazing actor who’s got an amazing range, is very entertaining. And someone puts a microphone in front of them and says, what do you think about immigration policy? Like seriously, why do we care? Likely we’re going to get a stupid opinion because it can’t be an informed opinion. They’re not an expert on immigration policy. They haven’t studied it. That’s not their corner of the world.

Colin White:
But because we know them, we want to have their opinion and everything. And then people actually will listen to that opinion as if it means more than an informed opinion and there’s oh my God, well it’s like watching professional athletes and put a microphone in front of a professional athlete. They give you an opinion on nuclear test band treaties. Like, seriously dude. Why? Just let that question sail by. Don’t get in front of a microphone and talk about it. You know, talk about your training routine. Talk about how, what things going. You’re entertaining me. Don’t annoy me by having an opinion on something you’ve got no business having any opinion on because that does move public discourse disproportionately. Now it’s not, no, come on Josh you are getting me all wound up.

Josh Sheluk:
That was the idea. Well this one will pulsate you a little bit Colin. If you have a long term investment horizon, this is number seven. What happened in the market over the next 12 months will not matter or your ability to achieve your long term objectives?

Colin White:
The only thing you count me would correct your language a little bit and say will not be material. It’s not the that it will cause a difference. It will be part of the data stream that determines the outcome, but it will not have a material impact on your long term financial success or failure. There’s nothing that can happen this year that’s going to… if you’re on a disastrous path that is doomed for failure, at the end of this year, you’re likely to still be on the same path unless fate intervenes in some big way with a lottery win or something.

Colin White:
But the challenge here is that we’ve convinced you that there’s a 24 hour news cycle. We have 24 hour business news channels that have to talk about things and they have to be interesting for 24 hours. So they’re going to have to convince you that it’s absolute mission critical for you to be aware of something is going on right now. Oh, in five minutes from now. And at the top of the hour, it’s just stop, just stop, go watch increment too. It explains it very eloquently is to exactly why, how dumb that really is.

Josh Sheluk:
Yeah, at the top of this hour, we need to tell you the five top stock picks for this year that are going to help you When you retire in 2057.

Colin White:
There was the article I read, the headline today was the two stocks you need to put in your TFS. That’s just the worst possible headline and the worst, just stop. Ooh, only two stocks and I can get this right, fantastic. That’s easy.

Josh Sheluk:
We need to add an asterisk to this one I think because the asterisk needs to read *if you do something that is completely irresponsible with your money, yes it could affect your long term investment objectives*. And on the other end, if you win the lottery, like you said, or you bought Shiba Inu or something like that before it went up a hundred thousand percent, then yeah, your fortunes could change one way or the other. But if you have a fairly reasonable and prudent approach to investing and saving, and it is a long term objective, this year is probably not going to be, make or break or whether you’re going to accomplish those goals. That’s what I want people to realize. If on December 31st your portfolio’s been down 20% here. Don’t think it’s a catastrophe.

Colin White:
No, and I think your point was well made when you initially said it, Josh, that nothing’s going to happen in the market that’s going to change the long term outcome for you. That’s not keeping you for doing smarter, stupid things. That’s a whole other prediction. I can’t wait to hear your prediction on the likelihood of more fewer people making smarter decisions. I’d love to see that prediction.

Josh Sheluk:
We’re not going there. Number eight, this is actually the real prediction, stock market returns will be lower this year than they were in 2021.

Colin White:
Now, Josh, come on now don’t be this guy, because I know internally you’re counting on the fact that the stock market air quotes can be interpreted roughly 38,000 different ways. And there will be one of the metrics under which you will be able to claim success in this prediction and those who say, oh, that obviously means the S&P 500 will be lower on a price basis, on a total return basis then Josh is going to respond with no, no, I was talking about the MSCI global expressed in Canadian dollars but you’re going to be able to find an example somewhere where you’re right, but the way you frame that’s a two out of ten. That’s just such a broad, useless prediction, Josh.

Josh Sheluk:
It is you’re right. I wasn’t actually trying to gain the system. I’m trying to moderate expectations a little bit from the investors that are out there, last year was a really good year, and we could take the S&P 500 as sort of the representative market for that. I think I heard something recently that even though the S&P 500 was up close to 30% last year, something like a quarter of a year or something like that, it’s up by more than that, my numbers might feel a little bit off, but it seemed like a real outlier year, but it actually wasn’t that much of an outlier.

Colin White:
No, Josh. I’m going to rip back the curtain here on the Barenaked Money, because what you’re doing really has a hidden agenda. Part of what Josh is trying to do is to manage your expectations, our lovely listeners, who we love and care for so much and want respect us. We’re just trying to manage your expectations because if we can convince you things aren’t going to be that great and things are no better than that. You’re going to feel good and it’s not going to change the outcome. It’s just going to make you feel better for exactly the same outcome. So if you’re expecting the same or higher return this year and get disappointed, then you’re going to feel bad and we don’t want you to feel bad. So this is us trying to manipulate you. How does it feel being manipulated? You can let us know in the comments.

Josh Sheluk:
So I actually have the numbers here. So I think it could be somewhat informative. So last year the S&P 500, just to go to that was a bit over 28%. And over the last 94 years, we’ve been 19 years that have actually outperformed last year. So as much as I can say, I don’t think returns will be higher this year. About 20% of the time, historically speaking we’ve would see higher returns on that. Now I’m also playing off the premise that we’re a couple years into sort of this recovery. Now, it seems unlikely that we’ll be able to continue to generate returns that are above average, significantly above average [00:19:47]. So again, trying to moderate expectations a little bit, but I truly believe there will be a lot more modest this year than they were last year.

Colin White:
No, in the realm of offering a very informed opinion. So you’ve got experience, you’ve got a lot of time reading, and part of your your job is to keep track of these things and make sure that you have a sense as to what’s going on, because that does inform our decision making when it comes to modest portfolio allocation adjustments over the year. So it’s a relatively, highly informed opinion that you’re giving Josh, but the nefarious side of it, you’re just trying to manage everybody’s expectations, so they feel better about themselves this year, despite the outcome.

Josh Sheluk:
Moving on, this one, I’m pretty sure this will come true for everybody. Someone will tell you that real estate is the best investment you can possibly make this year. And actually two weeks into the year, somebody may have already told you this.

Colin White:
No, 10 out of 10, this is so firmly-

Josh Sheluk:
Said you didn’t give 10.

Colin White:
I keep really firm opinions right up until I change them. You just said something is so obvious that, yeah, that’s so ingrained in everybody’s brain right now. And again, we’ve been on record and we’ve talked about this. It’s going to continue to trend and people are going to keep talking about it. And the numbers don’t back it up, the numbers don’t make it a bad investment. The numbers make it a good investment largely, but it is not the only way to make money. It’s not the only thing to invest in. And it has risks that people are perhaps undervaluing right now. And so, yeah, but it’s still going to circle around.

Colin White:
The conversation internally this week about friend told somebody, you know, gave them that they absolutely had to do something. So they came into us to their advisor and said, my friend told me I should do this and my response was, you need to lose that person’s number and no longer talk to them because friends don’t do that to people. If your friend is a full-time plumber and is giving you an opinion on Bitcoin, then they’re not that much of a friend and you need to stop listening to them. And that if people actually took that to heart this could stop the spread of some very dangerous ideas. And I think when it is a dangerous idea to think that all real estate goes up all the time, and it’s always a good investment, that’s dangerous that causes people to behave in a way that ignores the risks inherent in the system.

Josh Sheluk:
My last one here, Cole, and we couldn’t leave our listeners without a prediction on cryptocurrency, another one.

Colin White:
Right, so Josh, you’re telling me that there is a prediction that you were prepared to say out loud to everybody about what happens next with Bitcoin. You’re telling me that there’s a possibility to have an opinion in this amazingly complex, intricate, fascinating space that could possibly be true. I can’t wait.

Josh Sheluk:
And it is not specifically related to Bitcoin, cryptocurrency in general, my prediction is that there will be more cryptocurrencies at the end of this year than there are today at the beginning of the year.

Colin White:
Wow. See, you know what, I’ll square that a seven, 7 out of 10. Because in the back of my mind, I think the black Swan event could be that major countries decide that they outlaw them, not allow them at all. And a whole bunch of them get shut down because it gets too difficult to get in and out of them. And the demand dries up. But I’ll give it a seven out of 10. Cause I don’t think that it’s likely that it’s going to happen in the coming 12 months because bureaucracies don’t move that fast. So it’s your edgiest prediction. Josh, I’ll give you that.

Josh Sheluk:
I saved the best for last. For me, every time I’ve heard about the number of cryptocurrencies that are out there over the last six months, the number went up above 500. So if we’re on a pace last year to launch 500 a month, I think that this year will probably even equipped that number. We’ll have more, and greater pace of launches of new cryptocurrency this year than we did last year. So many people out there that are making a lot of money doing this type of thing. And while the music will stop at some point I believe, maybe that’s a prediction for next year. That’s not my 2022 prediction.

Colin White:
Yeah, save something for next time. Josh.

Josh Sheluk:
That’s it. Any final thoughts going

Colin White:
Again, I think the whole realm of predictions and there’s different types of predicting, there’s predicting the weather, there’s predicting tsunamis based on volcanoes, there’s a decision critical. And the problem with the human conditions, we don’t understand probability. 90% chance to rain still mean is that there might not be any rain. Half of all people earn less than average incomes, you know? Yes, that’s true. The way we take in and process numbers and probabilities and averages is fundamentally flawed. And so if you’re looking at predictions specific to the investment world, look at them for entertainment value only. And to the extent that you find them entertaining, that’s great. Something to talk about at cocktail party. If cocktail parties are still a thing, just avoid predictions for decision making and I’ll share one story that I’ve used in the past.

Colin White:
I don’t think I’ve used in the podcast. I think I’ve written about it, but the difference is, farmer takes a look at the Farmer’s Almanac and the Farmer’s Almanac tells them, it’s going to be a dry year. There’s a good way and a bad way to use that information. If the farmer decides, okay, it might be a dry year. So I’m going to take some additional steps to secure, extra water rights or extra water reservoir just in case it is dry in order to get through the year. That’s a positive way to use that information. If they change their entire planting plans for the year to all only plant things that will flourish in dry conditions, then that’s a bad way to use that information. Because again, assuming a prediction is going to absolutely be true and then acting on that. That’s when you blow shit up in a spectacularly multi multicolored ways. And that’s, to me, the lesson that we’re trying to get across with this, and the funny nature in which Josh went about actually trying to predict things in a way that wasn’t going to cause anybody any harm.

Josh Sheluk:
So what did I actually score Colin on average to my 10 predictions?

Colin White:
We’ll have to go back and review the tape. I wasn’t that interested all the way through.

Josh Sheluk:
I think I, I got a passing grade at least.

Colin White:
Oh definitely. I would never fail you Josh.

Josh Sheluk:
All right. That’s great till next end.

Colin White:
Thanks everybody.

Announcer:
This information has been prepared by White LeBlanc Wealth Planners, who is a portfolio manager for iA Private Wealth. Opinions expressed in this podcast are those of the portfolio manager only and do not necessarily reflect those of iA Private Wealth Inc. iA Private Wealth Inc, is a member of The Canadian Investor Protection Fund and The Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc operates.

Colin White:
We’ve noticed something. It seems there a lot of people who would rather try to figure out their lives with an online calculator than air your finances to a human, stop doing that. You need to talk to someone who can help direct you, tell you where to start with what you’ve got to make the biggest impact on your future. You can’t figure that out that do I have enough cash.com, but you can figure it out by chatting with us, call us. It’ll be okay. You’ll see.

Announcer:
The content of this presentation, including facts, views, opinions, recommendations, descriptions of, or references to products or securities is not to be used or construed as investment advice as an offer to sell or the solicitation of an offer to buy or an endorsement recommendation or sponsorship of any entity or security cited. Although we endeavor to ensure its accuracy, fleetness we assume no responsibility for any reliance upon it. This should not be construed to be legal or tax advice as every client’s situation is different. This podcast has been prepared for information purposes only.

Announcer:
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