The 2025 prediction post

Here's the playbook for the next 12 months

Here it is… my long-awaited predictions for the coming year. Strap yourselves in.

The Roaring 20’s continue!

Get ready for a post-election boom in the US. With Republican control of all three levers of political power, the time is ripe for economic growth. Count on an extension of tax cuts and lower regulations to prolong the post-Covid economic boom.

The AI boom will continue to fuel a capital spending bonanza, as the world’s largest and most profitable companies race each other to stock up on the hardware necessary to train future generations of large language models.

Meanwhile, the US national Bitcoin reserve will be approved and pump up the value of all crypto assets, rewarding early adopters with untold riches. Visionaries like Microstrategy’s Michael Saylor reach international celebrity status, having outsmarted the traditional finance suits who simply didn’t put in the work necessary to understand the new paradigm of wealth.

Or… the bubble pops!

Unless… new tariffs ignite a global trade war, leaving everyone worse off. Uncontrolled government spending (and borrowing) puts upward pressure on inflation and long-term interest rates, stalling economic growth and expanding the government’s fiscal deficit.

The new tech paradigm suffers a hiccup, and early adopters of AI find limited uses for the tool (has anyone found a way to use Microsoft Copilot for any practical purpose?) With an abundance of chips in inventory, spending plans retrench, leaving the semiconductor stocks with surplus capacity. Prices plunge.

Meanwhile, the crypto bubble bursts, leaving many new investors down over 70-80%. The financial engineering shenanigans surrounding the space (I’m looking at you, Saylor) impact some hedge funds and institutional investors, causing ripple effects in other areas of the financial system.

Yes, I’m full of it.

Look, I have no idea what is going to happen. The likely outcome is somewhere between the two extremes above. I consider my job to protect portfolios from permanent losses, and so I’m particularly sensitive to downside risks. I joke that I’ve been expecting a market crash every year of my investing life. That doesn’t mean that I’m actively betting on it; just that I won’t be surprised if it happens, and I should always be holding assets that I’d be happy to own throughout an extended downturn… because one just might be around the corner.

So we enter 2025 at what seems like an inflection point, with promises of a business-friendly political climate across North America, tempered by the risk of stubborn inflation and higher than expected interest rates. The cherry on top is a speculative fever we haven’t felt perhaps since the late 90’s.

What’s going to happen in 2025? Your guess is as good as mine. No matter what happens in the markets, I want to thank you for reading, and wish you a healthy and prosperous 2025.

Now for something completely different…

Outside of studying finance, one of the things I’ve wasted spent the most hours on over the years is indulging my music geekery. I usually spend a good chunk of December listening to all the new music releases from the year just passed… and man, I think 2024 is criminally underrated. Some absolutely amazing music out this year, especially for us old guys who were able to enjoy new music from old favourites who returned in top form.

Not one, but two new records from Radiohead spinoff The Smile. Don’t sleep on these!

The Black Crowes put out their best record since the mid 90’s, in my opinion. Felt and sounded just like old times.

One of my favourite of the current crop of rock bands, Idles, broke out of their typical sound with the Nigel Godrich (!) produced TANGK that vastly expanded their sound and style.

The JAMC put out a record that I hated at first… but now kinda like, so I’ll include it here. Pretty cool to see a veteran band continue to expand their sound and challenge listereners the same way they did back in the ‘80s.

Oh, and don’t forget the long-awaited new records from The Cure and Beth Gibbons (of Portishead) that stand with the best work in their canon, while also reflecting the wisdom gained in the decades since they did they were at their peak.

Nick Cave broke out of a long season of mourning with the triumphant and joyful Wild God (looking forward to hopefully seeing him live for the first time this spring!)

Jack White’s No Name was a fine return to garage rock form, backed by top tier riffs.

I’m not sure where Kim Deal has been, but her new record popped up out of nowhere and I really enjoyed it. (This is where the streaming services helped put this on my radar… otherwise I’m sure I would have missed it.)

Speaking of popping up out of nowhere, the year ended with a killer new Kendrick Lamar record and a fantastic live set from The National.

Tons of great stuff I haven’t even mentioned. In retrospect, a great year for new music.

In The New Year

Oh, I'm still living at the old address

And I'm waiting on the weather that I know will pass

I know that it's true

It's gonna be a good year.