(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Quentin Webb
HONG KONG, Jan 2 (Reuters Breakingviews) - With Breakingviews laying out its predictions for 2018, last year’s hits and misses are worth revisiting. As ever, columnists scored a mixture of direct hits and near-misses, and sent a few arrows wide of the mark. That’s to be expected: these views are meant to provocatively highlight interesting people, companies, countries and technologies, not foretell the future. A few lessons nonetheless jump out.
First, identifying broad themes makes for rich pickings. For example: under pressure from regulators, shareholders and others, mega-deals did indeed abate. Gulf banks agreed defensive mergers and New Delhi moved to shore up India’s rickety lenders, just as Breakingviews anticipated. China showed U.S. President Donald Trump more carrot than stick, while he governed in a manner familiar to Beijing-watchers, obsessing over growth, disdaining a free press, and keeping things in the family.
Second, backing the status quo often pays off. Thus Nicolas Maduro in Venezuela and Jacob Zuma in South Africa both clung to some semblance of power, while neither Uber nor Saudi Aramco got giant stock offerings off the ground, all in line with Breakingviews expectations.
Third, the more specific the forecast the trickier it is to be right. Disney, 3G Capital, Tencent and SoftBank all pursued big deals but their targets - ranging from Twenty-First Century Fox to Unilever , Snap and Nvidia – were often bolder or more leftfield than anticipated. In other areas, Breakingviews thought too big. So Credit Suisse and UBS did not unite their U.S. operations, the old First Boston and Bankers Trust, into what an insider jokingly dubbed “First Bonkers”.
Fourth, one big assumption can cause multiple miscues. As 2017 dawned, Breakingviews overestimated how much the Trump administration could get done quickly in areas like infrastructure and trade. So notions of a developed-world building spree, a strong dollar and destinations for repatriated cash proved wrong or irrelevant. Nor did Russian sanctions shrivel.
Finally, it is striking how little Breakingviews had to say a year ago about the giants of global technology. Yet the bull run in tech shares proved a huge story for the stock market. Similarly, bitcoin, cybersecurity and North Korea all got short shrift a year ago and then went on to claim headlines. As 2018 unfolds, it pays to think about blind spots too.
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Editing by Rob Cox and Sharon Lam