Good afternoon. This might be the last newsletter that goes out before year-end. It has been a wonderful year writing to all of you. This newsletter started with zero followers in early 2021 and now has 40,000 plus followers. I am very thankful for the community and all of your wonderful comments.

I wanted to take this time to lay out my predictions for 2022. It will be fun to come back to this article after a year is over to see how wrong I was.

Please comment your predictions below. Beers on me for whoever has the best stock idea.

Top Stock Idea

Express Inc. (“EXPR”) is my top stock idea for 2022. The company is a former meme stock darling, turned into a beaten down retailer. Valuation is around $200 million with $2 billion in sales and the potential to generate $120 million in EBITDA. Competitors trade at double the valuation. If the world doesn’t fall apart in 2022 (I’m not expecting it to) the stock should at least be a clean double. If management hits their 2024 guidance, the stock is a multi-bagger. You can see my full write-up on Express here if interested.

Omicron

I don’t think we will go into a full lockdown with the Omicron virus in the United States, but we will see a paring back on some freedoms. In general, the market will get more volatile with a new variant of COVID but we will not go back to the dark days of early 2020 with limit downs everyday. Eventually people will stop freaking out about Omicron and freak out about another variant. COVID-19 is likely a half or even full decade charade.

The Market

I’m betting the market goes up in 2022. It is never good to bet against the Fed. Bears almost always lose. Always bet with the house.

Inflation

We are going to go a lot higher. There is too much money and debt in the system. The Fed will have to hyperinflate its way out of this mess. There is no way we can raise taxes enough to cover our future debts. I am preparing for a higher inflationary environment by purchasing real assets and hard currency. I also think the government will change the definition of hyperinflation so we never technically hyperinflate.

Best Sector

The energy sector has been the best performing sector 2021 and I think it could be the best sector for 2022. If prices go higher, energy prices will go higher. This will result in operating leverage and strong free cash flows. Over a three-year period the energy sector is still down compared to every other sector which is in the green. Energy still has a long way to run and I think most operators are focused on cash flow over growing reserves which will ultimately benefit investors in the space.

Worst Sector

If inflation is going to be high like I think it is then the technology industry will probably be the worst performing sector. Investors will be forced to adjust their discount rates which will ultimately impact high growth tech companies the most.

I could be grossly wrong on this — based on historical returns the tech sector has provided for investors.

Charlie Bilello @charliebilello

Nasdaq 100 Total Returns... 2009: +55% 2010: +20% 2011: +4% 2012: +18% 2013: +37% 2014: +19% 2015: +10% 2016: +7% 2017: +33% 2018: +0.04% 2019: +39% 2020: +49% 2021 YTD: +6% $NDX Data via @ycharts

1:45 PM ∙ Feb 18, 2021

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The Craziest Event in 2022

Aliens coming to earth will be the craziest event in 2022. It will be like the movie Independence Day with Will Smith. Donald Trump will play Will Smith as the protagonist of the story.

The Market for the remainder of 2021

The market will remain strong for the remainder of 2021 as the Santa Clause rally goes into full blast. Typically the last few days of the year are light volume days that have historically generated strong returns. I’m not the only on who thinks this.

“It is uncanny” how often this trend has worked, Cramer said on “Squawk Box,” citing the research of market historian Larry Williams. “It is hard to go against something that’s been right every time that’s made you money.” — Jim Cramer

Jim Cramer @jimcramer

Historically today is the day the Santa Claus rally starts. It worked even during 2007-2009. So it is hard to doubt..

9:53 AM ∙ Dec 21, 2021

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Returning to Twitter?

For those who don’t know, I was suspended from Twitter with a collective following of over 1 million followers across six different accounts. Twitter has not said one thing about why they banned me.

It is likely I never get my accounts back. But that won’t stop me. I plan on launching a new Twitter profile sometime in early 2022 and come back to the game.

P.S.

If anyone is ever looking to grow a social media platform, feel free to reach out. I am pretty good at social media and building communities from scratch with a great track record.

Alpha Letter Pro

In 2021 I wrote up 17 high quality alpha rich stock ideas for subscribers. For 2022 I plan to match this same energy by finding hidden value stocks Wall Street is missing.

In addition I will be launching a platform where we can all chat on a more real-time basis about stocks and investing (think discord server). This chat service will be launched around early to mid-February.

It has been a great time writing for all of you and growing this community. I am thankful for all 40,000+ of you.

Please comment your predictions for 2022 below. It will be fun to see what happens.

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