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Last year, my ‘predictions’ column was tongue-in-cheek, but we nailed them. Basically, the only prediction we missed was that ‘markets will take a huge dip’ sometime during the year. The others (companies will make lots of money, investors will worry, the bull market will continue, higher interest rates won’t matter) were spot on.

This year, we will take a more direct prediction approach. Here goes:

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A ‘bubble’ is going to pop badly

Now, to cover our bases we are not going to predict which bubble, but there are many these days, and investors are in a frenzy. This likely will not end well. Lithium, cobalt, Bitcoin, marijuana — you name it and there is a least the potential of a bubble forming in all. Our bet on which one will pop? Marijuana. Think about it. If you are not smoking pot now, are you suddenly going to start toking up next July? Unlikely. In addition, if every single person in Canada spent $100 a year on pot, the market would still only be $3.7 billion. But based on the market valuation of public marijuana companies, investors seem to think the market size is going to be $20 billion. We would expect marijuana stocks to perk up into July and then likely roll over when quarterly numbers reveal far less growth than expected. What about Bitcoin? Who really knows. We think the cryptocurrency itself though will have a lot more staying power than the hundreds of companies that have suddenly entered the ‘mining’ industry and really have nothing but computers, so far (we have a much greater analysis of Bitcoin in the blog section of the 5i Research website).