Attempting to Divine the Biggest Surprises of 2018 - Pt. 3
Here we are in the home stretch of my 15 Surprises for 2018. Here are Surprises Nos. 11 through 15 (click here or here for the previous surprises.)
Surprise #11: Company Share Buybacks Drop Dramatically
Contrary to the consensus, slowing domestic economic growth, rising interest rates, contracting corporate profit margins, disappointing S&P profit growth and political uncertainty weigh on buybacks, which plummet to a three-year low despite the tax bill's cash repatriation provision and a sharp drop in the corporate tax rate.
Surprise #12: European Bonds Sour
The European Central Bank (ECB) announces late in 2018 that Germany's Jens Weidmann will head the ECB in 2019 when Mario Draghi steps down as president. The European bond market gets hammered because that spells the end of NIRP (no interest rate policy) soon after the 2018 end to quantitative easing (QE). The global markets, both stocks and bonds, re-rate lower as an unprecedented loss in EU fixed income spins the markets lower.
Surprise #13: Twitter Is Acquired
Twitter (TWTR) becomes a more accessible access point to news, sports and video content in 2018.
Twitter is acquired at $30 a share in a bidding war with two different technology companies and a media company.
Surprise #14: Berkshire Hathaway Makes a $75 Billion Acquisition in Early 2018
Shortly after announcing the deal -- the eighth-largest in the last decade -- health concerns cause Warren Buffett to announce his replacement in 2018 and preclude him from attending Berkshire Hathaway's (BRK.B) annual meeting in early May in Omaha, Nebraska.
After a four-year hiatus, Warren Buffett invites me to grill Charlie Munger at the 2018 annual meeting.
Surprise #15: Tesla Stalls Out
Tesla (TSLA) isn't able to successfully manufacture the Model 3 at scale. The company loses access to the capital markets and becomes the next Valeant (VRX) .
Elon Musk retires and leaves the planet, headed toward Mars with a harem of supermodels.
FANG stocks fall in sympathy.
And that, as they say, is that.