There’s a general feeling amongst Wall Street’s top players that 2024 goes to be a extremely insane yr — far eclipsing 2023 when it comes to crazy town. That claims something, in fact.
In 2023, a lot of weird stuff went down: A former president, who is likely to be our next president, was criminally indicted a bunch of times. Recently, a Senate aide was caught filming some amateur gay porn (versus the true stuff) inside an upper-chamber hearing room.
Still, predicting inordinate weirdness is a idiot’s game because most such extreme predictions often never materialize. If Armageddonists were right concerning the environment in pushing all those dopey ESG mandates, the East River can be covering Manhattan and I wouldn’t be hosting a dinner at Elio’s this week.
So in pulling out my 2024 crystal ball, I’m going to give attention to stuff I feel has a better-than-even probability of really happening. In no particular order of importance, listed here are my not-too-extreme predictions for 2024:
Meme team maiming
Meme-stock investors will proceed to get creamed. Should you don’t consider me, just take a gander on the social-media hysteria surrounding something called MMTLP, a delisted preferred stock that attracted an insane amount of interest from the meme crowd in 2022.
The meme money — retail investors who seek to prop up shares of balance-sheet-challenged firms — plowed into something that was imagined to be a stake in some oil wells somewhere in West Texas. That’s not why many bought this thing, nevertheless.
Memes still think they will get wealthy and stick it to the person just like the protagonists portrayed in that dumb meme-stock movie, “Dumb Money,” where average investors banded together and squeezed the stock of a troubled video-game company called GameStop in early 2021. They put a hedge fund that shorted (bet against) the stock out of business as shares spiked and a “squeeze” ensued.
The movie leaves out a number of salient points, including the dénouement of GameStop, which might be why it was a flop. Shares are down 78% because the squeeze, while the S&P 500 is up greater than 28%. The meme-types who got greedy and held got burned — as they at all times do. Ditto for the memes who threw money at shares of AMC Theatres. They got creamed much more; they’re down 99% from the highs, with the stock value just pennies on the dollar when factoring within the 10-for-1 reverse split.
The identical meme types chased MMTLP in late 2022, only to be similarly hosed when the short squeeze never materialized, and now they’re on the warpath.
Many are petitioning Congress for an investigation of regulators on the Financial Industry Regulatory Authority who stepped in on the last minute and halted trading before, they contend, the true squeeze was able to go down. FINRA’s actions were a bit murky, I need to say. That said, there’s good evidence the halt was choreographed; they simply didn’t understand the intricacies of the settlement process.
The larger point here is that should you go chasing short squeezes, you’re going to get burned because even the perfect traders get burned on one of these speculation, and the meme crowd hardly qualifies as being amongst the perfect traders. Which means there will likely be many more meme-stock losses in the brand new yr because these people don’t seem to grasp that they will still make around 5% on a money market fund, and never need to worry about sticking it to the person.
Crypto crunch
A correction in crypto is coming. As I’ve been reporting with my Fox Business colleague Eleanor Terrett, the SEC is prone to approve the primary “spot” Bitcoin ETF to be sold to the investing public. Having such a product priced off the every day or spot price of Bitcoin (versus the futures price) is a large step within the mainstreaming of crypto. Anyone can have access to Bitcoin through an NYSE- and Nasdaq-traded ETF as a substitute of worrying about doing business with a Sam Bankman-Fried. This could take Bitcoin to loftier levels than it’s been trading (up greater than 150% in 2023), right? My guess is the high-water marketplace for crypto might still be reached, but sooner or later it should trade off when it becomes clear that other than enthusiasts and speculators, average investors would slightly keep their money within the bank than put it within the national currency of cash laundering.
Getting zip from Zas
Zas won’t throw Shari a lifeline. Yes, I do know Warner Bros. Discovery honcho David Zaslav (aka Zas) likes to do deals, and getting greater is needed as of late to forestall the inevitable implosion of legacy media. But Zas has done an incredible job since taking the helm of the combined WBD, cutting a lot of debt and fixing the balance sheet. I do know he desires to play an extended game: fixing what’s broken in his shop and selling to a cash-rich tech company when the regulatory environment allows. Buying Shari Redstone’s Paramount and all its debt, not to say melting ice cubes of viewership (MTV and Comedy Central), only makes that harder.
OK, that’s only three predictions, but I feel I’ll stop here because I actually have a greater probability at being right than if I indulge my desire to predict something really weird (albeit plausible) — like Trump converting his jail cell into an Oval Office.
