Annual Forecast Dinner 2019 Quiz Results Annual Forecast

Annual Forecast Dinner 2019 Quiz Results

Annual Forecast Dinner “Forecasting is difficult, especially when it involves the future” –Yogi Berra “It is often said there are two types of forecasts… lucky or wrong!!” –Institute of Operations Management

2019 Quiz – Some Observations _______________________________________________ We had 131 people attempt the quiz. 18% or 323 correct answers vs. 22% and 325 in 2018 (30% in 2017 and 2016, 29% in 2015, 32% in 2014, 27% in 2013) Ø most common score was 2 correct (3 for prior 3 years) Ø But 23% got scores of 4 or more Ø highest score was 7/14 vs prior 4 years: 6/14, 9/13, 10/13, 8/13 Ø 10 people got scores over 5 versus only 4 last year

2019 Quiz – Some Observations _______________________________________________ Composition of the quiz and results: Interest Rates (Q 1, Q 2): 12% vs 30% Bond Sector (Q 3): 39% vs 9% Equities (Q 4 -Q 8): 16% vs 20% Commodities, Currencies, Special (Q 9 -Q 11): 21% vs 31% Best Portfolio (Q 12, Q 13): 12% vs 18% Local Market (Q 14): 20% vs 8%

2019 Quiz – Interest Rates (12% correct) _____________________________________________________ Ø Interest rates surprised us! Ø Q 1 & 2 Interest Rates: This was a hard question and it was no surprise to see a low number of correct predictions. This year almost 50% predicted a Fed rate > 2% (actual was 1. 75%) and 15% predicted the correct ending 10 year UST yield of 1. 5% to 2% (actual rate of 1. 92%) while 80% predicted rates > 2%. Ø We started the year with a Fed Rate of 2. 5% and in February 2019 we had just seen more than a decade of consecutive small increases to the Fed Rate so the 3 decreases at the end of 2019 caught us by surprise.

2019 Quiz – Bonds (39% correct) _____________________________________________________ Ø Great area of improvement from 9% correct last year and a contrast to our Interest Rate predictions! Ø Q 2 Which bond sector will perform best? Ø 39% chose the correct answer which was Emerging Market Debt

2019 Quiz – Equity markets (16% correct) ________________________________________ Ø Q 4: Investment Style: 50 chance with 39% (choosing the correct answer - Growth. (Growth +36% Value +27% (- 4% and -11 in 2018) Ø Q 5 -Q 6: Predicting US Equities, World markets Ø 26% chose the correct answer: NASDAQ +37%. S&P was selected by 42% (+31% - so it was a close call - all 4 were > 25%!) Ø World market: 1 brave soul correctly selected the BSX with a total return of +38% while 40% selected 2 nd place US +31% Ø Q 7 -Q 8: What will the rate of return be? Ø 54% predicted S&P in the range 5% to 15% Ø Not optimistic enough! Zero predicted S&P > 25%

2019 Quiz – Commodities, Currencies, Special ________________________________________ Collectively Some Solid Results: 21% Correct! Ø Q 9: Bitcoin? 24% chose $5, 000 - $10, 000. Almost 2/3 selected < $5, 000 (Actual $7, 158 vs 2018: $3, 674 or up 95%) Ø Q 10: Commodities? Most (38%) thought Gold but coffee was the winner and 18% selected this. Ø Q 11: Currencies? Down vs Yen, Up vs Euro (again!) Ø 21% correct Ø Almost half said Up vs both Yen and Euro

2019 Quiz – Best portfolio (12% correct) ________________________________________ Ø Q 12: If I had a Million Dollars! Ø Last year the answer in a bad market was 100% T-bills with return < 2%. Prior 2 years in a row the CFA answer of 60% Equity, 40% Bond was a winner. In 2019 53% went for 40: 60 Ø Correct answer was 100% REIT chosen by 18%. Ø Q 13: Specialist Portfolios Ø Only 5% chose Bitcoin which was up 95% Ø Most (39%) stuck with FANG which was the 2018 winner Ø Q 14: Local Market Returns Ø 28% predicted BNTB Ø 20% chose correct answer Ascendant +94% (2018: +78%)!

2019 Quiz – The Winners are: ______________________ One Winner with score of 7 /14. ØDamian Palanyandi

2019 Quiz – Bonus Questions Best & Worst Stock Winners ______________________ Best performing stock in S&P 500: AMD up 148% Ø Last year this impossible prediction had NO winners Ø This year 3 winners: Ø Qiny (Judy) Lutkin, Nathan Kowalski, Michael Veale Worst performing stock in S&P 500: Abiomed down 48% Ø No winners Ø 7 people were close choosing GE (down 57%)

Annual Forecast Dinner “Tonight’s Forecast: 99% Chance of Wine” - Shane English