Top Markets To Look Out For In 2022 | Kevin O'Leary's 2022 Resolutions

You know, it's that time of the year! Brand new year, lots of hope and excitement, but always the time of year to reflect on what's just passed and also set up some resolutions. What's wrong with that?

Now for me, let me tell you what I'm doing. Number one, I really care about what I eat these days. What you put in your body matters. I don't want to sound like a cornball, but I've really started to review, you know, that just living better with better food. So I'm kind of cooling it on what I drink. I'm kind of cooling on what I eat. I've lost 22 pounds. I feel like a million bucks. My energy is way up. I wish I'd started this a long time ago because it's very easy to do. Try a slight change in lifestyle, just eat healthier. You know what the foods are.

Number two, I really went down the rabbit hole on crypto this year. Whoa! Start of the year with three percent holdings in terms of investing in my portfolio. You should think about diversity in any portfolio. How much do you have in any one sector? Never more than five percent in any one position, never more than twenty percent in any one sector. So in crypto, I could go all the way to twenty percent and right now I started the year last year, 2021, at three percent. I said that I'd get to seven, you know, kind of slowly grooving into it. A lot of different positions, not just Bitcoin, not just Ethereum, all kinds of other tokens. But all of it together now went past seven percent; it's over ten. So I could go up to twenty percent. Maybe I will in 2022.

And then of course, I want to do a big shout out for Josh and I talking about money goals. This is a very cool thing we're going to be doing every week. It's the Live-O-Rama, which I really love. We'll be on together, we'll be talking about money—my favorite topic, no question about it. So check us out this coming Wednesday, three o'clock, New York live.

Okay, I don't even know where to begin! So essentially we've got this latest poll from CNBC and Change Research saying that 60% of respondents disapprove of President Biden's handling of the economy. Four and a half million people decided to quit their jobs back in November. Where are they going? Walk us through how you see January panning out because we just heard from Will talking about the FANGs—all in the red yesterday. It's rather interesting. The poll results are quite a surprise to everybody. Hadley, you're right about that.

Probably one of the problems, this is kind of a unique situation that I would have never guessed in the outcome—so much stimulus! You know families getting six hundred dollars a month. If you're working in a high-risk job, let's say you're working in a restaurant or in a place where there's a lot of public, on a street car or, you know, on a subway or whatever, where you're encountering a lot of people, that's now considered, given that we're going into almost a third year of pandemic, a high-risk position. You'd rather just not do it.

And I think the millions of really by those numbers—because essentially one of the numbers was 38% of Americans blame the president for rising prices. And the last time you and I spoke, we were talking about inflation, and you said it—I mean people are pissed about inflation. Can we really be surprised that that disapproval rating is so high?

Well, it's a rather remarkable situation, inflation, because if you look at services, there's not a lot of inflation in services. If you look at goods, particularly food and energy, there's incredible inflation—double digit, 12 to 19 percent. And so when you go to the grocery store and buy bread, that's up 20 percent, or meat or chicken or fish, whatever it is. Yeah, it's very painful. And a lot of that was assumed to be a lot to do with the broken supply chain, and yes, some of it is that. But there's real inflation now.

But look, the stimulus was insane in terms of just dollar amounts—trillions of dollars, trillions and trillions over a 24-month period. Why wouldn't you think inflation would come? And now it's going to haunt this president in the midterms. You're only months away, and you know, I don't care what incumbent you are, midterms, you definitely lose seats. But in this case, it looks like it's going to be devastating for the Democratic Party.

And frankly, because the Build Back Better bill is dead—in some ways for the market, you know, political aspirations set aside, there's total gridlock in Washington now. There'll be no more policy, which is a relief at this point, and I think that really bodes for better equity prices and better markets. Gridlock in Washington is a great thing, and we've got it now for the rest of the Biden administration, nothing else will get done.

Question for you on the equity side of things—what looks attractive to you at this point? Because, as they say, over the last 24 hours we saw all the things in the red.

Yeah, I mean look, there's been some corrections and, you know, volatility, and I expect we'll get more. I mean the best way to look at this is to say, okay, earnings potential for 2022 is up about eight percent. Add one percent in dividend yield, and the market's going to give you on an index basis about nine percent. That's not a bad outcome. It's not going to be 20-plus percent like in previous years, but nine percent versus fixed income, which is basically 20 basis points for savings accounts, is not a bad outcome.

Which is why most people are very constructive and remain long equities. Now, energy had a great run; I don't think it's going to perform as well this year. But overall tech, which has been volatile, still looks very promising because it's a productivity tool. And at the end of the day, the consumer looks immensely strong—so much so that many people are willing to quit their jobs. They've got so much in savings. It's a remarkable situation, Hadley. It kind of reminds me of the late 50s, early 60s.

The American economy is going to print, I think in Q1, much better than forecasted—three percent GDP growth. And yet another upside surprise—I'm very constructive on equities.

Hi Kevin, it's Matt here in Singapore, joining in the conversation as well. You mentioned it there, the 20-plus percent return that we saw when it comes to equities like the S&P 500 over the course of 2021. You don't think we'll see that this year—something more like nine percent? But how does the Fed, and of course a return to normalizing policy, complicate the outlook for equities?

Of course, we're anticipating that this year we'll start to see liftoff in rates. But there's a wide divergence when it comes to the number of economists and people thinking how fast the Fed will actually move.

It's true, there's no question. I mean, the most conservative estimates have the Fed moving three times next year. I'm not sure that's going to happen because we have this rather remarkable situation. And it's not the same COVID that we had a year ago, but it's ripping through the U.S. I'm here in Florida and we're having unbelievable outbreaks of this pandemic yet again.

But as many people fear, it's not as bad as the original COVID. But at the same time, twice as many people are getting affected twice as fast. So there is going to be hospitalizations, and as a result, I think the Fed is being very cautious in terms of moving on the economy while they're figuring out this last hurrah of the pandemic. So maybe you get another quarter before the Fed makes a move.

And remember, we had just under six percent GDP growth in Q4. Economists brought down GDP growth in Q1 that we're in right now to below three percent, and that's where the market's having a hard time making a decision. Because I think at the end of the day we're going to do much better than three percent. And as a result, equities still remain the choice. It's rather remarkable that to have a bull market run this long, but every bull market has a different personality and this one is all about longevity.

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