My Record of Predictions

You should be asking me and everyone else, “If you’re so smart then why didn’t you see this coming?”

First note that predicting really big general events requires consideration of millions of data points in a subconscious process that cannot really be explained. The best we can do is note who tends to be right.

So how has Leeroy F. Dermit done?

It occurred to me that I have done pretty well, and so I should write an analysis of my predictions from the last few years.

Personal Predictions

Starting around 2003, I was saying that housing prices were going up much faster than income, which meant that fewer and fewer families would be able to afford them. Therefore, I said that prices would soon top out, and that if interest rates ever went up, then the monthly payments would be so much higher that sellers would have to lower the price of their house to make monthly payments affordable to potential buyers.

Then in August 2005 I said that the housing market has peaked for the same reasons, so I sold my house for 266% of my purchase price. Before you get too jealous, note that I had to fix up the house, pay closing costs, and pay moving expenses, which totaled more than $50,000.

I then bought a better yet less expensive house in an area where I felt that prices would still go up because:

• Broadband Internet would increase the value in more remote areas.
• One can see snow capped peaks from one’s home and office.
• Access via airlines is good.
• The natural processes that have been causing a small degree of global warming since about 1850 may continue to make the weather more temperate.
• There was a large pool of potential buyers who could move here from the most inflated housing markets and afford a better house for less money, and there would probably not be enough houses available for them here.

I reasoned that if the local opportunity that brought me here dried up, then I could simply fly to whichever site paid me the most, which I predicted would be about $100/hour; whereas, an ordinary income for my skills would be $60/hour. Eventually the local opportunities dried up, and I started flying year round to sites that paid about $100/hour.

My bills were much lower and my income was much higher, so I didn’t need to work more than 4 months a year, but I reasoned that the economy could change and companies might stop hiring out-of-town contractors or might start paying significantly less. Therefore, I worked as much as I could while rates were high, which lasted two years. Rates are now lower and jobs are fewer, so I will have to work most of the year to pay the bills.

Also, my original house is worth $200,000 less than when I sold it, and my new house is worth $50,000 more than I paid for it.

So, my personal life predictions were correct across the board, but my correct predictions do not end there.

My Business Predictions

In my local opportunity, I predicted 3 years ago that although my employer was already supposed to be done with their project, they would still not be finished with their project three years later if they continued down the same path. I explained why, and I proposed an alternative approach. I almost got fired. It is now 3 years later and they are not finished with even the first part of their project. Of course, the VP cannot admit that I was right, or he would lose his job. I explain some of this in one of my earliest articles entitled The Incompetence of American Managers Drives Outsourcing.

My Government Predictions

I have predicted for years that in spite of some recent setbacks for the proponents of big government, such as the Internet, the future would probably continue the more than 100 year trend towards higher taxes and more government spending.

I also predicted in December 2006, that Hillary Clinton or someone like her might be the next President, which prompted me to start my web site. I predicted that McCain would win unless 2 out of these 3 things happened. 1) an unprecedented media campaign to get Hillary/Obama elected, 2) an economic crash, or 3) a huge setback in the War on Terror. 1 and 2 happened and McCain lost.

I predicted that if the next President were Hillary or Obama, then they would try to ban guns. Therefore, I ordered my assault rifle back in early 2008. Of course, Obama did win, and he is already trying to ban guns like he did in Illinois in spite of his pre-election claim that he has always agreed with the Supreme Court’s 2008 decision, which declared that that all guns bans are unconstitutional. I explain Obama’s record in my article, The Universal Right to Keep and Bear Arms.

Obama has also raised taxes, and in his own words, he has tripled the deficit with his spending. A majority seem to believe his uniformed rhetoric that low taxes, low spending, and deregulation have been proven wrong.

Not only did these predictions come true, but my most recent predictions for government are already coming true, which I have documented in my article Obama’s Third Inaugural Address.

My Stock Market Predictions

I have been trading stocks since early 2007, and I would estimate that out of about 100 stock trades, about 75% of them have been correct or neutral in spite of the crash in March 2007, the crash in August 2007, the decline since October 2007, the really big crash in September and October of 2008, the small crash that started the morning after the election, and the crash that started about a week after Obama took office.

However, by random coincidence, the points in time at which I had new money to invest was right before the first three crashes. Also, the crashes starting in September 2008, were easily preventable by rolling back a handful of government taxes and regulations, so even if I knew then what I know now, I would not have predicted the main crash, which started in September 2008, because my faith in government was too high. This is why, in spite of my high percentage of correct decisions, I was losing 3% of my savings at the beginning of September 2008, and I was losing 53% by the end of October 2008.

This may sound like a failure, but to be fair, one must compare me to my peers.

Consider that I manage three stock portfolios, which includes my IRA, another IRA, and a regular brokerage account. I have four top rated mutual funds in the regular account, which is a high risk account, and yet that account is outperforming three out of those four top rated mutual funds. Consider that my IRA, which is equally high risk, is out performing all four top rated mutual funds, and consider that the other IRA, which is where I manage "other people’s money" like a mutual fund manager, is doing way, way better than top rated mutual funds. Also, consider that these top rated fund managers have way more time, experience, information, and education than I do, and that they probably did not receive large increases in new cash just before each crash – and I still significantly outperformed them.

In spite of my powers of prediction, I cannot predict the market at this point. It is almost as if elements in government and business have conspired to drive the market as low as possible. Consider that if you know the market will go down ahead of time, you can make a fortune by selling short and buying credit default swaps. If this is true, then my prediction would be that once they have made the market go as low as they can and everyone else is too afraid to invest in the market, then they will try to make it go as high as they can.