Looking Back at My Magic 8-Ball’s Predictions for 2012

For the past three years, I’ve been using my trusty Magic 8-Ball to predict the future. I know.

Laugh all you want, folks, but it’s been quite successful over the years. In 2010, my Magic 8-Ball had an astounding 70% success rate. The following year’s prognostications were almost as good; 66% of the predictions for 2011 turned out to be correct.

With results like that, it’s no wonder people were lining up last January to ask my Magic 8-Ball what was in store for 2012.

So … How well did it do this time? Well, here’s a quick summary of the results:

Question: Will real estate continue to rebound in major cities such as San Francisco and New York?
8-Ball said: Outlook not so good.
What really happened: According to the S&P/Case-Shiller Home Price Indices, the latest available data shows composite year-over-year home prices in October 2012 for 20 of the biggest US cities climbed 4.3%.
Nostradamus meter: Wrong

Question: Will the housing market continue its spiraling descent in 2012?
8-Ball said: Outlook good.
What really happened: The number of home sales climbed 6% last year. Believe it or not, that marks the first annual increase since 2005.
Nostradamus meter: Wrong

Question: Will a Republican be elected US president in 2012?
8-Ball said: It is certain.
What really happened: In November, voters reelected Barack Obama — a Democrat — to his second term as US president.
Nostradamus meter: Wrong

Question: Will the European Union break up?
8-Ball said: You may rely on it.
What really happened: Despite all of its troubles, the European Union is still very much intact.
Nostradamus meter: Wrong

Question: Will Italy and Greece finally default on their debt?
8-Ball said: Very doubtful.
What really happened: Somehow, some way, Greece and Italy both managed to buy more time with their creditors and delay their eventual days of reckoning by kicking the can down the road a little further.
Nostradamus meter: Correct

Question: Will Prince William and Kate Middleton announce a pregnancy?
8-Ball said: Without a doubt.
What really happened: On December 3rd, St. James Palace announced the happy couple were expecting their first child. The new arrival will be third in line to the throne, after Princes Charles and William.
Nostradamus meter: Correct

Question: Will the Green Bay Packers win the Super Bowl in 2012?
8-Ball said: My reply is no.
What really happened: Despite ending the regular season with a stellar 15-1 record, the heavily-favored Packers were eliminated in their first playoff game by the eventual Super Bowl winners, the New York Giants.
Nostradamus meter: Correct

Question: Will Tiger Woods win a major championship in 2012?
8-Ball said: Most likely.
What really happened: Woods had a very good season last year, winning three PGA Tour events and rising from 50th to 2nd in the world rankings — but he once again failed to win a coveted major, extending a four-year drought.
Nostradamus meter: Wrong

Question: Will Apple’s stock price end 2012 higher than its closing price on the day Steve Jobs died?
8-Ball said: You may rely on it.
What really happened: The day that Jobs’ death was announced, Apple’s closing share price was $377.37. It ended 2012 an impressive 41% higher, at $532.17 per share.
Nostradamus meter: Correct

Question: Will Apple finally begin issuing a dividend in 2012?
8-Ball said: Outlook good.
What really happened: Last March, cash-rich Apple announced it would finally begin distributing dividends. The first quarterly dividend of $2.65 per share was handed out to shareholders in August.
Nostradamus meter: Correct

Question: Will savings account interest rates rise in 2012?
8-Ball said: My sources say no.
What really happened: Rise? Are you kidding? Saving account interest rates actually set record lows in 2012. In fact, they’re now so low that, after accounting for inflation, people who use them end losing wealth.
Nostradamus meter: Correct

Question: Will inflation hit 4 percent in 2012?
8-Ball said: Very doubtful.
What really happened: Although the official numbers are dubious, the inflation rate as measured by the Bureau of Labor Statistics’ Consumer Price Index never approached 4% at any time in 2012.
Nostradamus meter: Correct

Question: Will the Dow break 13,500?
8-Ball said: My reply is no.
What really happened: The Dow broke the 13,500 mark back on September 13th.
Nostradamus meter: Wrong

Question: Will Microsoft hit 30 bucks in 2012?
8-Ball said: As I see it, yes.
What really happened: Although a share of Microsoft stock is currently under $30 — it closed at $27.21 on January 15, 2013 — its shares did indeed cross that mark last February.
Nostradamus meter: Correct

Question: Will the unemployment rate fall to 7 percent?
8-Ball said: Yes.
What really happened: By even the most optimistic Department of Labor measure, last year the US unemployment rate never fell as low as 7%.
Nostradamus meter: Wrong

Question: Will gold top $2000?
8-Ball said: Signs point to yes.
What really happened: At its 2012 highpoint last October, an ounce of gold managed to reach $1794. Since then, however, the yellow metal has fallen back below $1700.
Nostradamus meter: Wrong

Question: Will online poker become legalized in the U.S. in 2012 (and make the government billions in taxes)?
8-Ball said: It is certain.
What really happened: A bill to regulate online poker was sponsored by Harry Reid (D-Nevada) and Jon Kyle (R-Arizona), but it never made it out of the US Senate in 2012.
Nostradamus meter: Wrong

Question: Will Jennifer Aniston get engaged in 2012?
8-Ball said: Outlook good.
What really happened: Sorry, fellas, but Jen became engaged to actor Justin Theroux back on August 12th. (Better luck next time.)
Nostradamus meter: Correct

Question: Will the components of the Dow stay unchanged in 2012?
8-Ball said: Outlook not so good.
What really happened: On September 24 of last year, UnitedHealth Group replaced Kraft Foods as one of the 30 companies that make up the Dow Jones Industrial Average. It was the first change in the Dow since June 2009.
Nostradamus meter: Correct

Question: Will the world end in 2012?
8-Ball said: Don’t count on it.
What really happened: Well … you’re reading this now, aren’t you?
Nostradamus meter: Correct

Add it all up and, excluding two personal questions received last year (not included in this summary) that were not related to finance or current events, my 8-Ball finished with a very respectable success rate of 55%.

Overall, the Magic 8-Ball has correctly predicted 31 of 50 events since 2010, for a still-impressive three-year success rate of 62%.

As you can see, the Mayans have nothing on my 8-Ball, folks.

Photo Credit: bark