From roughly late Sep 2022 through about Feb–Mar 2023, holding cash in a SPAC trust and getting $10 back will outperform being invested in the broad equity market on a risk‑adjusted basis.
“I think that's actually better over the next 5 or 6 months than what it'll otherwise do if you're invested in the market.”
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Explanation
Holding cash (or SPAC trust redemptions) did outperform being invested in the broad equity market over the following several months, as the S&P 500 continued declining into its October 2022 bottom before recovering only gradually.
Of the several hundred tech-focused SPACs still searching for targets as of Sep 2022, more than 50% will fail to complete a business combination and will instead liquidate and return capital to investors at or before their deadlines.
“The overwhelming majority of the tech SPACs, I think, probably will just wind up.”
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Explanation
The overwhelming majority of tech SPACs from the 2020-2021 boom did fail to complete viable business combinations and liquidated, returning trust capital to investors, consistent with widespread SPAC wind-downs through 2022-2023.
From roughly mid‑2022, the IPO/SPAC/direct‑listing window for late‑stage private tech companies will remain effectively frozen for about two years, i.e., there will be very few such exits before mid‑2024.
“I think the whole public markets. Exit ideas frozen for two years. Two years. I think that's yeah, I think that's probably what people are thinking.”
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Explanation
The IPO/SPAC exit window for late-stage tech companies remained largely frozen through most of 2023, only beginning to meaningfully reopen in 2024 with IPOs like Arm and Instacart, roughly matching but running somewhat longer than the predicted two-year freeze from mid-2022.
Relative to the 2021 pace, annual venture capital deployment by US VCs over the next few years (starting 2022) will fall to roughly one‑third of the 2021 level as firms revert to a 2.5–3 year deployment cycle.
“If you just go back to a two and a half or three year pace of deployment and before in 2021, we were at a one year pace of deployment, divide the availability of capital by two thirds. I mean, you know, only one third as much will be deployed in any given year.”
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Explanation
Annual US venture capital deployment did decline substantially from the 2021 peak through 2022-2023, though whether it fell to precisely one-third of the 2021 level is difficult to confirm exactly; deployment fell by roughly 30-50% in various reports, broadly in this range but not a precise match.
The US economy will experience a double‑dip recession, with real GDP turning slightly positive for a short period and then going negative again once the full impact of interest‑rate hikes is felt, with this second downturn beginning sometime after late 2022.
“Given what we're seeing in the public markets this week, it doesn't look to me like it's going to get any better. It looks to me like we're headed for I mean I call it a double dip recession. I think a couple of months ago, that's exactly what it's looking like. In fact, the fed basically said as much.”
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Explanation
The US did not experience a double-dip recession; GDP growth resumed and strengthened through late 2022 and 2023, avoiding the predicted second downturn.
From late 2022 through at least the end of 2023 and possibly into early 2024, US consumers will face deteriorating conditions: unemployment will rise from then‑current levels, inflation will remain elevated and persistent, real wages will decline, consumption growth will weaken, and corporate earnings will be generally poor.
“It's going to be a really tough, sticky time for the US consumer probably over the next 18 months. And so I tend to think that, you know, through the course of this year and through 2023 and possibly even a little bit of 24, it's going to be a grind. Unemployment will go back up. Inflation will be sticky. Real earnings will shrink. Consumption will ebb and earnings will not be that great.”
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Explanation
Inflation and consumer pressure did persist through 2023, but unemployment remained historically low throughout the predicted window rather than rising, and the broader 'grind' with rising unemployment did not materialize as described.
US equity markets will complete their bottoming process by roughly the end of 2022 or the early part of 2023, after which they will begin forming a base rather than making substantially lower lows.
“I think that we are starting a bottoming process for the equity markets. And I think that by the end of this year or the early part of next year, most of that will be done.”
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Explanation
Equity markets did not complete their bottoming process by the end of 2022 or early 2023; the S&P 500 continued to decline further, with a deeper trough occurring around October 2022 and additional volatility through much of 2023 including a notable pullback that fall.
By approximately Dec 31, 2022 to Mar 31, 2023, major US equity indices (e.g., S&P 500, Nasdaq) will have put in a cyclical bottom and will be in a base‑building phase rather than continuing a pronounced downtrend.
“By the end of this year, beginning of next year. I think that we will have kind of bottomed and will start to build the base.”
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Explanation
The S&P 500's ultimate cycle low did occur in October 2022, just before the predicted window's start, and markets did begin a genuine base-building/recovery phase in subsequent months, broadly consistent with the spirit of this prediction even if the precise low predates the stated window.
The US federal funds rate will reach or exceed 5.0% during this tightening cycle associated with the 2021–2023 inflation surge.
“This inflation, as I've said for a long time, is going to be sticky and persistent. I think you're going to see fed funds at or breaching 5%.”
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Explanation
The federal funds rate did reach and exceed 5.0%, peaking at 5.25-5.5% by mid-2023, confirming this prediction.
Broad risk assets (including equities and similar markets) will reach their cycle lows and bottom out by roughly late 2022 or early 2023.
“In terms of, you know, risk assets will bottom out by the end of this year, beginning of next year.”
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Explanation
The S&P 500's cycle low technically occurred in October 2022, slightly ahead of the predicted late-2022/early-2023 bottoming window, though broadly in the same timeframe.
In California, retail electricity prices will continue rising at roughly 7–11% per year, causing average electricity costs for consumers to double again within approximately the next 6–7 years from 2022 levels.
“while the cost of generating renewable power has fallen by 90%, you know, virtually it's on par and it's cheaper than any other form of generation. Your electricity costs have doubled and are probably going to double again in a state like California. So, you know, we're catering our our utility rates by, you know, 7 to 11%. Um, every year”
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Explanation
California electricity rates have continued rising substantially since 2022, with utilities requesting and receiving significant rate increases, broadly consistent with continued cost escalation, though the precise 7-11% annual pace and doubling-within-6-7-years timeline is difficult to confirm with available data.