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What a year! Cryptocurrency scandal. Rampant inflation. Ground warfare in Europe. The Federal Reserve Bank full of energy. Depression chatter. The world’s richest man buys Twitter. The US Securities and Exchange Commission fined a social media influencer $100 million for hyping securities and selling them at artificially inflated prices. midterm elections. And 2022 will bring even more chaos. Chaos invites confusion. No wonder people turned to the internet for clarity. These were his top 10 most searched investment terms in 2022, according to data collected by Investopedia.
- poisonous pills. The term became popular when Tesla CEO Elon Musk tried to take over Twitter. A poison pill is a corporate defense strategy used by public companies to prevent acquirers from devouring their controlling shares. There are several ways to poison potential takeovers. When Musk made his offer to buy Twitter, Twitter’s board unanimously voted to adopt a plan to dilute the stake in the acquiring entity. In this case, the “poison” issued more shares and pushed prices down. Eventually, Twitter relented and Musk became Chief His Twit and entered HQ in Musk-like fashion. let it sink in…
- recession. On April 5, 2022, Deutsche Bank became the first major bank to predict that the United States would enter a recession. A swarm of other banks then followed. On May 23, 2022, I went one step further and said, “I think the US economy is in recession right now.” In that declaration, I am like an island. Many prophets have scoffed at what happened earlier this year and instead focused on what might happen in 2023. Gross domestic product (GDP) in the first and second quarters of 2022 ) were minus 1.6% and 0.6% respectively, so it felt like a recession to me.
- hostile takeover. This was another top search term coming from Musk’s unilateral acquisition of Twitter. Shares of publicly traded companies represent ownership. It is theoretically possible (and practically possible if you are the richest person in the world) to buy enough shares in a company against its will. ).
- bear market. A 20% price drop usually defines a bear market. 2022 has seen bear markets in stocks, bonds, crypto assets, oil and other commodities. The S&P 500 he rose 100% from 2018 to 2021, but the bear market has caused a lot of pain as the memory of the previous rally faded. Therefore, there were more searches for this short-term phenomenon than for its early glory.
- Refrigerate. A popular way to hold cryptocurrency assets is an exchange. But then in October 2022, he was robbed of $570 million when the Binance exchange was hacked. Another exchange, FTX, he imploded after a month. Cryptocurrency investors have been looking for ways to protect their assets from these dangers. Cold storage is a form of digital wallet that is not connected to the internet, making it less vulnerable to hacking and other risks.
- Federal fund rate. When someone says the Federal Reserve has raised interest rates, we all get the point of that statement. But specifically, the Federal Open Market Committee (FOMC) sets interest rate policy. The FOMC is a subcommittee of the Federal Reserve Board, and the interest rate administered by the FOMC is the “Federal Funds Rate.” On June 15, 2022, the FOMC increased the Federal Funds Rate by 0.75% (aka 75 basis points). This is the largest increase since 1994. 4.50 percent.
- Surrender. When investors search for the term “bear market” the next question is “when will the pain end?” The pain peak of falling investment prices often happens when all the sellers who want to sell surrender and sell. All the so-called “weak hands” have been thrown in the towel, resulting in an avalanche of selling, depleting supply and driving prices down to the point where buyers want to step in and accumulate stocks. There have been a few instances of surrender in 2022, but none were notable enough to confidently declare the end of sales.
- Gilts. Starting a new job can be difficult. Britain’s new prime minister, Liz Truss, has tried to push her tax cut agenda. In normal times, applause and cheers. Who doesn’t like tax cuts? But when inflation is so high, stabilizing prices isn’t the best thing to do. Gilts are the equivalent of US Treasury securities in the UK and India. On Sept. 22, 2022, Truss’ agenda forced Gilt bond prices to plunge the most since his COVID-19 crisis. She lasted only six weeks at the job.
- petrodollar. Crude oil exports, from any country, are bought and sold in US dollars. Together, these global earnings are classified as petrodollars. After Russia invaded Ukraine on February 24, 2022, oil prices soared above $125 a barrel, increasing the number of petrodollars.
- core inflation. The economic story of 2022 was inflation. People understand inflation. It’s an increase in prices. Federal Reserve interest rate hikes target core inflation, which is the cost of goods and services, but excludes the volatile food and energy sectors. The Fed has his core inflation target of 2% (though his Fed statements and actions this year have been less credible). The next core inflation report was released the day after this column’s deadline, at which time core inflation was 5.0%.
Can you guess the most searched terms in 2023? If so, leave a comment below. My guesses are “Bitcoin Crash”, “Twitter Bankruptcy”, “China Reopening”, “Deflation”, “Definite Result ETF”, “Capital Idea Advice”, “Tax Haven”.
Allen Harris is the owner of Berkshire Money Management in Dalton, Massachusetts, managing over $700 million in investments. Unless specifically identified as original research or data collection, some or all of the data cited is attributed to third party sources. Unless otherwise stated, references to specific securities or investments are for illustrative purposes only. Advisor’s clients may or may not own the securities described in the portfolio. Advisor makes no representation that any of the securities discussed are or will be profitable. Full disclosure here. Please contact Allen directly at Aharris@BerkshireMM.com.
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