We have made it through another year.

2022 Predictions in Review:

Previous Year’s Predictions

Financial Predictions

Ryan: 3.5/4
Aaron 3/3
Brennan 1.5/5


  1. SPAC broadly will continue to underperform in 2022.

SPAC company returns were truly awful in a bad year and some that are still in SPAC form (with no transaction) – shareholders are looking to get their cash back – in at least 80 cases.

2. Inflation will be a huge market focus in 2022 – particularly in the first half of the year. We have already heard the US Federal Reserve talk of potentially moving faster in terms of rate hikes. It will be difficult to move rates too far, too fast, without derailing the economy. So there will be more talk, than actual meaningful rate hikes in 2022.

Inflation has been a huge issue in 2023. There have been actually rate hikes, not just talk. General theme correct, but the hikes were understated.

3. COVID will not end for the foreseeable future but new variants will become less potent (or dangerous) and that, coupled with high vaccination rates and advancements will make it more manageable through 2022 and we will have a semi-normal Christmas next year.
COVID is minimal, – normal Christmas – aside from the 30 feet of snow in Vancouver.

4. Removal of stimulus from World Central Banks and governments will impede growth and the markets will face periods of significant volatility in 2022 – correction periods that will lead to value opportunities long-term.


Canucks prediction:

Despite a stellar record with nary a loss in the last 9 games since the Bruce Boudreau coaching change, the Canucks, under a new regime, will actually be sellers at this year’s trade deadline, eschewing ownership short-term play-off aspirations, and looking to build a sustainable winner 2-3 years down the road. (this is likely wishful thinking on my part – but I am putting it out there).

This was a joke. In my heart, I knew it would all end badly.

Brennan’s Girlfriend:
Brennan will state he has a girlfriend only for it to end up a figment of his imagination.

If Brennan is being honest with himself, this one was dead on.


  1. Prediction 1: The Covid Pandemic will peak in the first quarter of 2022 and we will return to some semblance of normalcy before the end of the year.
  2. Prediction 2: Cost-push inflation will continue to be a major factor in the economy through 2022.
  3. Brennan’s debate loss rate will decline to below 75% in 2022.

Vecima – Brennan Win

Leatt – Ryan Loss

Absolute – Brett Loss

Algoma – Brennan Win

>50% win Aaron was Correct!


  1. With fears of inflation and Governments around the world beginning to gear toward interest rate hikes, I believe that Gold will perform well in 2022 because of its safe-haven properties. >Correct – as I can argue it did better than other assets.
  • Brett stated that I was wrong here.. but I would like to argue that technically I was right. If we look at Gold performance in comparison to the S&P 500 and TSX which are down 21% and 9%, respectively, while Gold is down only about 0.5%. Relatively speaking I believe that gold has performed well in 2022.

2. Small-Cap Stocks will perform better in 2022 than they did in 2021 > Wrong

    • There is no arguing against me being dead wrong on this one. The Russel was down 23% in 2022 and across the board was a difficult year for small-cap stocks.

3. This was a flyer – but I said that Rio Tinto would announce a new discovery and plan to advance a diamond mine in Saskatchewan during 2022. >Wrong

    • This was wrong. I made the case that Rio Tinto would move to establish their next diamond mine in Saskatchewan.. considering their only other diamond mine in production ends in 2025 and they had gained 75% interest in a Saskatchewan based project. But in June 2022 Rio Tinto placed the Project on care and maintenance and also advised that it intended to conduct a near-term review of its alternatives regarding the Project, including its potential exit.
    • THIS IS A CAUTIONARY TALE of Investing in Junior Exploration companies and why KeyStone chooses to avoid these speculative stocks. I have followed this Sask diamond project since I was a teenager and it was the first stock that I ever purchased… All I can say is that it has taught me a lot about the market and is one of the only reasons why I have become so passionate about finance. But in hindsight I wish that I would have been holding a cash flow producing business over all those years.

4. The Semi-Conductor/Chip Shortage will continue to be an issue throughout 2022 and even potentially into 2023. >Correct for 1/2 of year.

    • Chip shortages turned into a surplus in some industries. By late June 2022, memory chip company Micron Technology Inc. said it would reduce production. The sudden change in the market caught Micron by surprise

5. I am going to double down on my prediction from 2021 and say that the pandemic’s end will be in sight by December of 2022…. >Correct

6. I am going to win the Basketball Draft that I am in, taking home the glory and $450 cash! >Wrong

    • I went undefeated for the year… but lost in the first round of playoffs….


Macro Forecasts

“There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.

— John Kenneth Galbraith

Macro Forecasts

“Forecasts create the mirage that the future is knowable.”

— Financial historian Peter L. Bernstein.

Macro Forecasts

I think this is my favourite and we will build off of it.

“Investors rely on historical references and the forecasts they foster because they fear that without them, they would be flying blind. But that does not make them reliable.”

— Howard Marks.

Investors would most often be more comforted with the advice of an idiot, than with the cold truth from an intelligent investor that the macro future is indeed very, very difficult to predict.

Howard Marks is co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide. He holds a net worth of $2.2 billion.

His last point is the crux of the argument…. Just because Investors rely on forecasts, that does not make them reliable. And reliability, is the key. If they are not reliable, they are useless and, in many cases, harmful to your portfolio.

The folly of macro forecasting.

When considering the reasonableness of forecasts, Marks believes we should decide whether our world is one of order or randomness. In a recent memo he states (and I will paraphrase from him) is the world entirely predictable, entirely unpredictable, or somewhere in between. Likely in between. But unpredictable enough to make most forecasts unhelpful. Since our world is predictable at sometimes and unpredictable at others, what good are forecasts and investment based on them if we cannot tell which is which?

The folly of macro forecasting.

  • Example 1 from Marks:
  • Fall of 2016 there were two massive consensus macro forecasts:
    1. Hillary Clinton would win the U.S. election.
    2. If somehow Trump was elected the markets would tank.
  • What actually happened:
    1. Trump and the markets soared.

Basing your investment decisions on these macro forecasts would have cost you money.

Marks conclusion on macro forecasting (I agree wholeheartedly).

(at first this might sound counter to the argument, but it will make sense in the end).

Most forecasts consist of extrapolation of past performance.  Because macro developments usually don’t diverge from prior trends, extrapolation is usually successful. Thus, most forecasts are correct. (BUT WAIT, YOU SAID FORECASTS ARE FOLLY??) HERE IS WHERE IT ALL COMES TOGETHER.

But since extrapolation is usually anticipated by security prices, those who follow expectations based on extrapolation don’t enjoy unusual profits when it holds.

Once in a while, the behaviour of the economy does deviate materially from past patterns. Since this deviation comes as a surprise to most investors, it’s occurrence moves markets, meaning an accurate prediction of the deviation would be highly profitable. However, since the economy doesn’t diverge from past performance very often correct forecasts of deviation are rarely made. And most forecasts of deviation turn out to be incorrect.

Thus we have two scenarios

  1. A) Extrapolation forecasts – most of which are correct but unprofitable.
  2. B) potentially profitable forecasts of deviation which are rarely correct and thus are generally unprofitable.

Conclusion – most forecasts don’t add to returns ( they can be entertaining though!)

While one should not ignore the Macro Environment, it is folly to try and base your investment decisions on macro forecasts which require far too many inputs for even the best forecasters to consistently get right.

Folly of macro forecasting.

Example 2:

  • The S&P 500 had fallen 57% since the bear crash began in 2007 and pessimism reigned supreme.
  • But what happened on that day? The stock market suddenly turned around and embarked on the longest bull run in history. By 2013, the S&P 500 had gained back all the losses of the Great Recession.

If you listened to macro forecasts you would have been nowhere near the stock market at the best time to invest in decades.

Folly of macro forecasting.

The stock market is an early warning indicator.

It starts declining, in this case in mid-November 2021, long before a recession hits.

On the flipside, the markets typically bottom long before it ends.

Find the stocks you want to buy today and start buying with a long-term plan.

Most people buy stocks the wrong way – curiously behaving differently to price increases or decreased than if they were purchasing almost anything else.

If steak is 30% off at the supermarket, you buy it. Stocks drop in price, and many panic and sell.

The opposite is also true. The price of steak jumps 30%, you buy chicken or less steak.

But in the stock market, stocks go up in price, many buy for fear of missing out. Historically, we know these are terrible strategies.

When great cash producing stocks come on sale, it is a great time to buy.

Focus on what you can control.

    1. Composition of your portfolio –Essentially, how many stocks to own and over what period of time to build it.
    2. What you put in it. (this is the most important part).
  • Types of stocks you want to own

Ryan’s Predictions: 

AI or Artificial Intelligence will be one of the more discussed themes of 2023 – the next and best investment ideas are coming – investors beware the pretenders – 

AI or Artificial Intelligence will be one of the more discussed themes of 2023 as more use cases are imagined, flushed out, and realized.  AI has been brought into focus by the artificial intelligence “chatbot” ChatGPT, showing off thousands of AI use cases, including text, image, audio and video digital media generation and analysis, and more will create many investment opportunities some real, but I also predict this will develop into another area TSX-Venture charlatans will seize to raise capital over the next several years in ill conceived shell companies that investors should avoid with extreme caution. True AI applications continues to be capital intense and big data reliant which is very expensive. The average TSX-Venture company raising $10s or even $100s of millions of dollars is unlikely to be a long-term winner. Particularly if they are starting today or trying to acquire tech and roll it up into a public shell. Buzz words we have seen lead to bubbles and crashes over the past decades include 3-D printing stocks, cannabis stocks, the never ending boom and bust of junior mining stocks, crypto stocks, and so much more. Could it happen again for AI stocks in 2023 and beyond?

‘ChatGPT’, a Natural Language Processing [NLP] software programmed to engage in text-based conversations with people in a natural, human-like manner.

OpenAI, the creator of ChatGPT, proclaims various capabilities of its latest NLP software innovation. within 5 days of launch in late November 2022, ChatGPT reached 1 million users, as people experimented with the software to ask natural questions, write essays, and even generate step-by-step instructions for completing complicated tasks. Despite the excitement around its capabilities, it is important to make clear that ChatGPT has no corporate applicability at the moment.

In fact, OpenAI CEO Sam Altman has cautioned on ChatGPT’s limitations, making it clear that not all answers produced by ChatGPT may be factually correct, undermining its business use case presently. As I understand, the way it works currently is people use ChatGPT and then go to Google to verify the results. From this perspective, claims that ChatGPT threatens Google’s Search dominance are ludicrous.

ChatGPT is meant to be an advancement of GPT-3, which is available through Microsoft’s (MSFT) cloud service Azure for corporate use, and offers more reliable answers.

Housing Prices Continue to Fall – a significant decline in North American House Prices in 2023.

Housing, while starting to roll over near the end of 2022, actually held up well for the year relative to other asset classes. For example, the S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index is still up 6.46% in 2022, where stocks, crypto, and a number of commodities have collapsed from highs on the year.

The rate hikes in 2022 which were late and then aggressive have a lagging affect. As monthly payments reset over the course of 2023, demand for homes lessens and the reality will set it for those on the margins forcing sales at some point


More Companies from our 2023 Cash Rich, Profitable Stock Special Report and just general small-cap coverage will be acquired than in the previous year. Smart money will start buying with the declines. Aggregate M&A will be down as less transactions are completed in down markets, but the smart money will be buying.

Approximately 90 Cash Rich Small-Caps Covered 4 were acquired and 2 more had their primary assets purchased for cash.

    • Freshii Inc. – we outlined it in a number of reports as a potential takeover target.
  • GoldSpot Discoveries Corp.
    • Macro Enterprises Inc. – a company recommended and owned by KeyStone clients. Management lead transaction – we expect more like this in 2023.
  • Vigil Health Solutions Inc.

There was also a couple from the list that had their primary public businesses acquired – they are still trading publicly but with just the cash on hand seeking another business opportunity:

  • Starrex International Ltd. 
  • Noble Iron Inc.

All acquired for significant premiums.

ALSO: More unique transactions: Going private transactions for example, like the December 9th, going private management buyout transaction for small-cap insurer ICPEI Holdings Inc. (TSX-V: ICPH) for cash consideration of $4.00. This was a 90.5% premium to the company’s closing price of $2.10 per share the day prior. Significant opportunities may present themselves in 2023 – but one will have to be positioned in good businesses ahead of time.

In the same vein – M&A activity should be opportune in US markets – a number of “Pandemic Stars” may face bids after recent share collapses. (but many will still need further declines to be truly attractive). Perhaps names like Pinterest (PINS) and Peloton (PTON) will face bid. Could Zoom or will it continue to decline? Many names to consider in the tech space. Again, many need to fall further to be truly attractive.

No more girlfriend predictions.

Brennan will end up taking his sister to prom.

Brennan’s 2023 Predictions:

  • Airline Fare pricing is going to become more reasonable in 2023. 
    1. Over the last 12 months, Airfare in the U.S. had an inflation rate of 36%. And I believe that airfare pricing will begin to normalize in 2023 back to pre-pandemic levels.
  1. Now of course fuel is one of the largest input costs for air travel (which has been coming down from highs) but I believe that following the post-covid spike in demand for air travel experienced in 2022, airlines will begin to adapt to capacity issues which began in 2020 with laying off a substantial amount of staff. For example:
    1. WestJets new strategy into 2023 (De 27th) is to “take the Calgary-based airline back to its roots” in a world emerging from two years of pandemic restrictions and lockdowns. Which means more centralization in Western Canada while looking for ways to make flying more affordable. Whether the new CEO will be able to change this is questionable. But it is a push for progress.
    2. Southwest Airlines in the U.S. is going through its own problems causing it to cancel more than 2300 flights in a day over the holidays due to winter storms, but most importantly, because of staffing shortages and underinvestment in its operations such as its technology which matches crew members with an aircraft.
  2. So, I really think that the airlines are waking up to their shortcomings and are working to fix their issues. And to track my prediction I will use the St. Louis Fed – Consumer Price Index for the Average Airline Fares in U.S. Cities. Which in November the index was at 280.5. So, by December of 2023 I believe the index will be meaningfully lower.
  • Gold will perform well in 2023… relative to other asset classes. 
    1. With interest rate hikes, inflation remaining at somewhat elevated levels and the fear of the economy beginning to slow, I believe that relative to the TSX and S&P 500 gold will perform well due to its safe haven properties.
    2. And I continue to hold the gold-miller recommendation from our coverage as well as a pure play, cash rich, gold miner recommendation from coverage.
  • Because of elevated interest rates, I believe Single Family Residential Housing Prices in Saskatoon will decline ~6% to a median price of $380K. 
    1. To track this I will be using the Saskatchewan Realtors Association home price index which is currently priced at $403K.
  • This summer my Golf game is going to improve, and I am going to break into the 70’s. 

Brett’s Predictions:

  1. Inflation will be materially lower by the end of 2023.

Rationale: Commodity prices have already started to come down across the board over the last quarter of 2022, I expect this to continue into 2023. Once the CPI numbers start to lap predominantly over the first half of 2023 we will start to see lower inflation numbers. We saw energy peak in the middle of 2022, but food continued to climb throughout the year, and my prediction could largely depend on whether food continues to become increasingly expensive or if we finally see some reprieve.
A step further for this prediction,  I expect inflation to come to around 3% by the end of 2023. 2.0 -3.5%

2.SBF or Sam Bankman Fried will be convicted and sentenced to more than 20 years. I think this is going to be a make an example of him case, and isn’t just a slap on the wrist. At this time ex-girlfriend Caroline Elison as well as co-founder Gary Wang have already pleaded guilty and are likely providing insider details to convict SBF.

3.Chinese Equities are going to continue to fall. Both mainland China equities as well as ADRs which trade on American Exchanges like Alibaba or Baidu, are going to face perhaps the weakest economy in decades. I’ve never liked Chinese equities due to the opaqueness of the accounting and minimal accountability to investors, and when the tide goes out with the weakened economy we’re going to see who’s swimming naked.

4.The Major Canadian and American equity Indexes will finish 2023 up.  After a harsh 2022, I think we will see a better year but not a great year for the equity market as a whole. This prediction will likely end similarly to my inflation prediction, if we see inflation drop, we will see interest rates drop, which causes equities to perform better.
4.5.Russell 2000 > SP500 Returns

5.Brennan’s predictions will be over 50% correct.

Aaron’s Predictions:

1. Inflation Continues to decline through the first half of 2023.

2. Central bankers announce at least 1 interest rate reduction in 2023 (second half)

3. Stock markets enter another bull market in 2023 (first half)

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