What Could Go Wrong?

Trumping DC

“Experience is simply the name we give our mistakes.”
– Oscar Wilde

“Mistakes are the usual bridge between inexperience and wisdom.”
– Phyllis Theroux

“Economists are often asked to predict what the economy is going to do. But economic predictions require predicting what politicians are going to do – and nothing is more unpredictable.”
– Thomas Sowell

We’ve reached that wonderful time of year when financial pundits pull out their forecaster hats and take a crack at the future. This time the exercise is particularly interesting because we’re at several turning points. Any one of them could remake the entire year overnight. I should probably say up front that I am actually somewhat optimistic about 2017 – optimistic, meaning I think we Muddle Through – but that’s a lot better outcome than I was expecting five months ago. And since my annual forecast has been “Muddle Through” for about six years now (which has been turned out to be the correct forecast), then, given all the speed bumps in front of us, this could be the year where I’m spectacularly wrong. Midcourse corrections may be warranted.

I’ll have my own specific predictions later this month, along with a review of others that I find instructive. Today’s letter, though, will preface that discussion. Instead of trying to answer questions about the future, I’ll try to list those we should be asking as 2017 opens. These are the things that I sit and meditate about when I consider the future of economics, markets, and investing. Today’s economy is something like an old-fashioned Swiss watch. It’s a thing of beauty when all those delicate little gears mesh just right. If you ever take the time to actually study the inner workings of the marvelous manifestations of human ingenuity that keep us all alive, it is difficult not to come away awestruck by the ability of the human mind to craft such complexity. But if any of the gears get just a little out of whack, the entire contraption can grind to a halt.

Now, if your watch stops working, it isn’t the end of the world. You can know roughly what time it is just by looking out the window. The global economy is another matter – we can’t afford for any of its major components to break down; so it’s smart to ask, “Where are the weak points.” That’s what we’ll do today: We’ll poke at the economic mechanism as it grinds along here on New Year’s Eve 2017; then I’ll get more specific in my forecast issue.

Before we begin, let me briefly mention that our most exclusive service of all, the Mauldin Alpha Society, is currently open to new members.

I launched the Alpha Society last year as a way to connect more intimately with my most valued readers – the “idea chasers,” as I call them. If you join this inner circle of the Mauldin Economics family, you’ll pay a one-time initiation fee (plus a small annual maintenance fee) and receive all our research for life.

How fast this investment pays for itself depends on which services you’re already subscribed to, but I can guarantee you that you will completely recoup your investment in no more than two and a half years. After that time – and potentially much sooner – you’ll essentially get everything we publish for free, for as long as we publish.

Aside from saving copious amounts of money on subscriptions every year, as an Alpha Society member you’ll enjoy all sorts of useful perks – among them a generous discount on the coveted tickets to my Strategic Investment Conference (to be held this year in Orlando, Florida) and the opportunity to attend a special SIC meet ’n’ greet, hosted by yours truly, where you can share drinks and thoughts with me, our blue-ribbon speakers, and the Mauldin Economics editors.

These events are always my favorite part of the SIC. It’s where we get to pick each other’s brains about our mutual investing future. I learn so much every time we hold these get-togethers that by now I’m convinced we have some of the most brilliant subscribers of any investment research service out there.

I hope you’ll join us this year as an Alpha Society member, so we can get to know each other. Enrollment is open until January 15 or until we have filled the 300 available member slots, whichever comes first. Get all the details here.

Now, let’s look under the hood at 2017.