Investors can make a tidy fortune after listening to economic guru Byron Wien's surprise predictions for the new year, CNBC's Jim Cramer says.
"He's tremendous, he's still got game," Cramer said on CNBC. "Most people don't have any game when they get older."
The vice chairman of Blackstone's private wealth solutions group issued an annual note Tuesday with his 10 predicted surprises for 2018. Among them, Wien sees a stock correction this year and Republicans losing both the House and Senate in midterm elections in a referendum on President Donald Trump.
"The great thing about Byron's picks, and I've followed Byron for 30 years ... is when he's wrong, it really doesn't cost you anything. When he's right, you can make a fortune," Cramer said on "Squawk on the Street."
Wien is a 50-year veteran of Wall Street. This is his 33rd year giving his views on a number of economic, financial market and political surprises for the year, beginning the tradition when he was chief U.S. investment strategist at Morgan Stanley, CNBC reported.
According to Wien’s annual list of surprises.stock speculation will get ahead of itself in 2018, leading to a short correction for the S&P 500, while oil will vault above $80 as “populism, tribalism and anarchy spread around the world,” Bloomberg reported.
Even with the decline to 2,300, the benchmark gauge for U.S. equities will end the year above 3,000 as profits rise and economic growth approaches 4 percent, wrote Wien, vice chairman in the private wealth solutions group at Blackstone Group. A year ago, the former Morgan Stanley strategist said the S&P 500 would climb 12 percent in 2017. It gained 19 percent.
“The U.S. economy has a better year than 2017, but speculation reaches an extreme,” he wrote in predictions published today. Wien, who’s put out the “surprises” list since 1986, says it’s made up of events that investors assign 1-in-3 odds of happening but that he thinks are more than 50 percent likely.
Most of last year’s crop didn’t come true. He called for 10-year Treasury yields to rise toward 4 percent. Instead, they peaked at 2.6 percent. While he got oil right, saying it would stay below $60 a barrel, his optimism on the dollar’s strength proved misplaced and he misjudged German Chancellor Angela Merkel’s chances of winning re-election.
Among his other calls for the coming year: the euro will drop to 1.10 versus the dollar and the yen will hit 120 against the U.S. currency. Interest rates will climb, with U.S. Treasury yields moving toward 4 percent, as inflation becomes a bigger concern and the Federal Reserve tightens four times. Republicans will lose control of both chambers of Congress in November, he predicted.
(Newsmax wire services contributed to this report).
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