4 Bold Predictions For 2025

Foreign.

Is behind us and we seem to, at least for now, have avoided civil war. So now it's time for us to look ahead to 2025 and make predictions for what the world will look like one year from now. But first we must review my predictions from last year and see how we did. I think it's kind of ridiculous that people make predictions year after year and keep getting them wrong and people still trust their opinions. I'm looking at you, Robert Kiyosaki. I'm looking at you, all the people who predicted economic meltdowns every year for the last 50 years and just continue to be wrong and everybody still keeps buying your newsletter. I'm also looking at you, Harry Dent. When people make predictions and they don't happen, I think it's reasonable that those people be held accountable. So let's hold me accountable to the predictions that I made a year ago and see how I did for first, I predicted that interest rates would stay high and that we would have a mild economic recession. Last year people were saying that we would get six interest rate cuts this year from the Fed. And I said that's ridiculous. That will never happen. At best we'll get one percentage point cut. And that's exactly what we got. We actually cut more often than I thought, but overall interest rates stayed high. But I was wrong about an economic recession, at least depending on who you ask. Technically we did not have a recession this year. And so I got the interest rates part right, I got the recession part wrong. Instead, what we saw was that interest rates stayed high, but also asset prices stayed really high. What the heck is that all about? That's gonna lead into a prediction that I have for 2025. But overall we saw a strong year of growth, but still persistent inflation and, and interest rates stayed high and that trend probably is gonna continue into 2025. The second thing that I predicted was that we would have a new E commerce platform emerge in 2024. It seemed reasonable to me that it was time for there to be a real player to come out and compete against Amazon.com we hadn't seen one come out in more than a decade and it was time to. Boy oh boy, did I get this one right. No one except for me could have predicted that TikTok Shop would become the player that it did in 2024. And it is now a serious contender for market share against Amazon. What we also saw in 2024 was Walmart.com start to have a resurgence. Walmart.com now does the same volume that Amazon does did 10 years ago. That's really interesting because 10 years ago everybody thought that it was a really good time to get into e commerce and now Walmart does this same volume that Amazon did back then. So we have some very interesting tailwinds in E commerce with the emergence of TikTok shop. With Walmart.com and Amazon continuing to perform and have record Black Fridays and record prime days, these are some very interesting indicators for what we can expect in E Commerce heading into 2025. My third prediction from last year was my number one stock pick. I like to pick one stock every year that I predict will go up. And my prediction last year was PayPal. This is a stock that most people overlooked, even thought was a dying company. I looked at the vision and the new team and said this is a company that I would bet on and I'm going to give myself an A on this one. I went pretty heavy into PayPal at least for me, and I was rewarded with almost 60% upside in 2024 compared to a very good year with the S&P 500, which went up about 25 or 30%. In fact, I think the S and P may have had a record year. So overall it was a really good year for stocks. But my number one pick of PayPal did exceptionally well. It wasn't as good as my pick from two years ago. My number one pick two two years ago was Meta, which has gone up 500% since then. But I'll take 60% on a stock that most people overlooked and said was even a dying company. What's my pick for next year? Stay tuned. And finally I said that we would see a rise in the e commerce conglomerate, meaning that I thought that big companies would start to merge in 2024 after this big wave of acquisitions from the post Covid era. I said in a high interest rate environment, it makes sense that we start to see mergers start to happen in E commerce. And I'm going to give myself an incomplete on this one. We did see some evidence of it. For example, Dr. Pepper acquired Ghost Energy, which was a really interesting move. That's really big companies starting to come together. And Ghost was, you know, a fairly modest sized e commerce company just a handful of years ago. So that's a very interesting partnership. There was also an interesting partnership that was announced between Amazon and TikTok. This has never happened before where you see two giants in the industry come together and combine resources. That is unprecedented. So we see hints of this idea there being conglomeration in E Commerce. But it was not the big mergers year that I thought that it would be. So I'm gonna give myself a C minus on that prediction. Overall, I get about a B for my predictions from 2024. A few of them I knocked out of the park and a couple, you know, I got them half right or partially right. Totally got the recession one wrong. Thought we'd have a mild recession. Actually, we had another boom year, another inflation year, but a boom year. So what do we expect in 2025? What can we expect based on what we saw in the economy, in politics, in e commerce, in entrepreneurship? Let's go into that right now. I'll share with you what businesses I see emerging, what trends I see happening in E commerce, and I'll give you my top stock pick for 2025. Remember, I'm an idiot that you follow on the Internet. Don't take anything that I say as investment advice. That would be dumb. First, let's talk about a new industry that I see emerging in 2025, and it's AI, SaaS, companies. It's going to be so easy to spin up a software as a service company in 2025 where you can just create a prompt or a small piece of code and I spin up a new tool, sell it for 17 bucks a month, and have this new tool that just does whatever you program it to do. This is kind of a silly example, but we've actually programmed a bot with all of my content, with, with my book, all my podcasts, and can now respond to questions in my voice. It took us minutes to spin something like this up. And what you're gonna see is that you can program bots and you can program little tools to do small tasks, and it's gonna be easy to sell those for 10 to 50 bucks a month, depending on what the functionality is. And so I think that you will see a new industry emerge and these little tools that get created and that become software tools, and they could be multimillion dollar businesses just spinning something up in a few minutes and selling that as a new tool. And that's going to be a new wave of small businesses that entrepreneurs are going to pounce on in 2025. Number two, crypto communities. I might be early on this one, but eventually this is going to play out. The real takeaway from the crypto boom is going to be crypto communities. And eventually people are going to pool their resources and create cryptocurrencies that they use to build community and transact with one another. And those are going to become Asset classes. We see this happening in meme stocks. The real magic behind dogecoin or sheba or hawktua or fart coin for goodness sake is the fact that there is a community with aligned incentives. Now, right now, the only aligned incentive is the fact that they're all trying to make money together. But eventually that's going to be other incentives too. When churches or hoas or companies or communities with a certain set of values come together and they create their own economy, their own source of commerce, that's going to be the real takeaway in this crypto boom. In fact, that was what made bitcoin. Bitcoin started because it was a group of people who wanted to have a currency that the government couldn't manipulate. It was us crazy libertarians who got bitcoin off the ground. Full disclosure, I was a total doubter in bitcoin for many, many years. That was a prediction I got wrong. But what bitcoin shows is that when people come together as a community and they have shared values and a shared incentive, they can change the world. And it's only a matter of time until people have aligned incentives and start a crypto to almost make it official. Next, in E commerce, we're going to see a rise in luxury brands. The reason for this is because the race to the bottom is over. We've seen as much of a race to the bottom as we are going to see in E commerce. The margins in the mass market brands has been squeezed. And so the only way that you can differentiate is by having a truly different, unique, high quality product with good margins. And that requires a swing of the pendulum from low quality brands to high quality luxury brands. Here's how I figured this one out. I got re involved in the business that I sold back in 2017 and honestly I thought it was going to be harder this time around. But what I noticed is that e commerce entrepreneurs are really bad right now. People don't build audiences, they don't build really high quality products. They're just trying to compete with all the other brands and charge less money than everybody else. And they're not really good at marketing and they're not really good at differentiating their product. People aren't good in e commerce anymore. It's been such a booming space that you haven't had to be good. It's like launching a crypto right now. You don't even need to be different. You just gotta be trendy and you win until you rug pull everybody else. E commerce has kind of been like that for the last few years you haven't even needed to be good. Now if you are good, you stand out and you are able to have really high margins and really high quality products and you end up getting all of this market share even in saturated markets. So I think that we will see a return to high margin E commerce brands because a few entrepreneurs will realize, oh, if you're reasonably good at this, you can absolutely clean up. So we're going to see a new wave of high margin luxury brands in E commerce. Even on platforms like Amazon where everybody else is trying to charge the minimum, you'll see the brands that win will be the ones with premium price points. Next, I'm going to predict that politically or societal, Lee, we see a return to community or a return to some sense of unity. We'll see people start to work together again even if they disagree on things. Wokeness has peaked. Wokeness is now dying off. We now realize that we don't have to hate each other if we have different conclusions. And we are starting to realize that the world is a little bit more nuanced and less black and white than we thought. And the people on that team aren't always enemies. Sometimes they just have a different perspective. And so why don't we just get back to normal of doing business together and why don't we just come together with a unified vision of how we can win together and serve the community or the world together. So I think we are going to see a much more moderate tone in the world, less judgment, a return to community and we're going to see more, more incentives for that to be the case. There are stronger incentives now for us to work together in spite of our differences rather than throw stones at each other because it's not cool anymore to judge a group of people for their beliefs. I'm really glad that that's the case. Now we can move forward and I give all the credit to capitalism for that one. Because capitalism is the force in which our combined resources, our combined focus is worth more then they are separate. The most unifying force in the world is trade. When we are incentivized to trade together, we don't care so much about what you look like or what you believe. We care about what we can do together and that creates understanding and trade. And so I think we're going to see the next trend be more unified visions together and less judgment. Next let's talk about the economy. I think this year we're going to see a pretty boring year. I think that the Euphoria the excitement about the Trump administration, about crypto, about interest rates coming down, I think that's all priced in right now. And so I think we're going to have a pretty tepid environment in terms of growth this year. I think there's going to be some tempered expectations once the new administration comes in. And people are going to realize that not much is going to change quickly. If there is going to be change, it's going to take some time. I also think that we've got a tough pill to swallow. If we realize that Elon and Trump really do want to create a more efficient government. That means that we're going to have to reduce spending. And when we reduce spending, that's tough. In the short term, it is not exciting to see money taken out of the economy. It's the right thing to do long term, but it can be hard in the short term when it comes to the amount of money that is being spent in the economy. So I think we will see tempered expectations and slow growth, not necessarily a recession, but overall a flat year while we readjust to a new environment. Now, let's conclude with my number one stock pick for 2025. I gotta give a little bit of context to this. I don't see any obvious opportunities right now. The market's so hot and I think that a lot of optimism is already priced in. So there's not a lot of really obvious opportun opportunities. So I'm going to give you two I like and then my number one pick, I like Kellogg's, which is kind of a weird pick, but it's a fascinating story. Kellogg's as we know it doesn't even exist anymore. They split into two companies in 2023 and their snack brand, which had Pringles and Cheez ITS that got acquired by Mars. So all of those Kellogg's brands, they're just part of Mars now. And what was left is this tiny little startup that is Kellogg's Cereals. They IPO'd at a billion dollar valuation. They're tiny. They're operating like a startup. I'm fascinated by stories like that. And when you have this big brand spun off into a startup, it's just really fascinating to watch. So I think Kellogg's is going to be a very interesting play over the next couple of years. I also think, ooh, this is going to piss some people off. Pfizer is going to be a very interesting stock to watch in 2025. For all the people who say they just got into it for the money, Pfizer lost over $100 billion in market share over the last couple of years. Their stock is down over 50%. They weren't even profitable last year. They just swung the pendulum into profitability again. And they have all this brand recognition and a ton of R and D. So I think Pfizer is going to be an interesting pick in 2025. But my number one pick for 2025 is Alibaba.

Full disclosure, I own some Alibaba. I'm long Alibaba. And this is not investment advice. Don't listen to anything that I say. I'm an idiot that you follow on the Internet. But I think that China is going to be fine. They're going to weather their own storm. I think E Commerce is very strong right now, and Alibaba as a company is still hugely profitable. However, the stock itself has been beat up. They used to be one of the highest valued companies in the world, and today they've fallen by over 70%. So there's been a lot of bad news keeping the price down of Alibaba. I think that this is going to be the year where they start to swing in the other direction. So there is so much stimulus happening in China. China is going to be fine in the long term, and E Commerce is so strong that I think Alibaba is going to benefit from tailwinds in 2025, and it's going to start to recover as a. As a stock, and they've got huge profits. They're going to be fine. So that's my number one stock pick for 2025. It's Alibaba. When it comes to predictions, I agree with Scott Adams. Predictions are a way of testing if your filter on the world is accurate. When I look at the people who make predictions about the economy melting and they're wrong year after year after year, I believe that that's evidence that their filter on the world is wrong. When people make predictions about certain cryptos going to the moon and it doesn't happen, I think that means that their filter on the world is wrong. So this is a way for us to test my optimistic frame on the world. And I'd love to hear what you thought of my predictions. And if you've got any ones for 2025 that are different from mine, take care. And now a quick word from Dr. Travis Zigler, one of our members from the capitalism.com community.

I'm Dr. Travis Ziegler, and along with my wife, Dr. Jenna Ziglar, we started a brand called I Love. We had our exit in June of 2021. So that was a huge milestone for us both, from making us financially free to getting us out of debt, student loan debt that we've had since we became doctors in optometry school. And when we sold, we were doing close to 450,000amonth. I started with capitalism.com back in 2017, 2016, around that time, and I joined the tribe first, which was the equivalent to the incubator. Now the biggest thing, and I think this is the fear that brings us all back, is they're afraid of investing and getting that return on your money. And so my fear of investing in myself, I'd never done anything like that up to that point. And my wife wasn't there and I joined without consulting her, which was, I don't recommend doing that. But it was probably one of the best decisions we've ever made because it's just amazing what an investment in yourself with capitalism.com has done for us. Nothing changes after an exit or a financially freeing exit or anything like that. But how is our life different from joining capitalism.com?

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