In this Motley Fool Money podcast, host Chris Hill kicks off the year with a 2018 preview show with help from Total Income's Ron Gross, and Motley Fool Pro and Options' Jeff Fischer.
In this segment, Chris asks them for forecasts that some might consider "out there" but that they're willing to stand behind. Their responses include a fast-food acquisition that could undo the buyer's mistake, and some targets for market growth that -- at the record highs we're hitting -- do seem fairly ambitious.
A full transcript follows the video.
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This video was recorded on Jan. 5 2018.
Chris Hill: All right, let's get to reckless predictions for 2018. It can be about business. I should point out that on last year's show, you made a prediction, Ron, S&P 500 up 15%. You were in the ballpark.
Ron Gross: Not too shabby.
Hill: It was up around 20%. Again, in the ballpark. Jeff Fischer, nowhere near the ballpark, said that in 2017 the market would be down.
Gross: You weren't even in the parking lot of the ballpark.
Jeff Fischer: It was a reckless prediction! I remember Ron said, "I bet plus 15%," and I took the opposite, "I'll say it'll fall 15%." It felt reckless at the time, and it was.
Hill: You also bet $1 on it. Have you paid up?
Fischer: Oh, no. I haven't.
Gross: You can buy me a mug.
Hill: Ron, what do you have?
Gross: Let me take you back, Chris, to a simpler time. 1998, where McDonald's (NYSE: MCD)made an investment in Chipotle. I know Chipotle was discussed earlier, by Jason. By 2005, McDonald's had a 90% stake in Chipotle. In 2006, Chipotle went public. Later that year, McDonald's completely divested itself of that company. So, my prediction is that now that McDonald's has successfully turned its business, it will now look for a new distraction, a new way to destroy shareholder value, or not, and it will acquire Chipotle. This year, it will be announced.
Hill: You know what? If Steve Easterbrook became not just the CEO of McDonald's, but the CEO of Chipotle, I know a lot of investors, including myself, who would be interested in that.
Gross: You got it.
Hill: Jeff, what do you have for a reckless prediction?
Fischer: I was going to say Amazon buying Target, but that doesn't feel so reckless anymore. That news has bounced around. Target is a $35 billion company; Amazon is $600 billion. So, I'll just say, I think the S&P, which rose about 20%, as you said, Chris, will rise 20% again this year. Again, that's a reckless prediction. I don't make market predictions.
Gross: I'll throw in a bonus prediction. Nine percent, I'm on record for saying.
Fischer: You're official on it.
Gross: It's return to the mean of where we have been historically.
Hill: You guys going to bet another dollar on this, too?
Gross: Ooh, I don't know. Double or nothing? I'm in.
Hill: Steve Broido, our man behind the glass, a couple of reckless predictions there. Either of those seem likely to you?
Steve Broido: No.
Gross: [laughs] No, but how do you really feel, Steve?
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Chris Hill owns shares of Amazon. Jeff Fischer owns shares of Amazon. Ron Gross owns shares of Amazon. Steve Broido owns shares of Amazon and Target. The Motley Fool owns shares of and recommends Amazon and Chipotle Mexican Grill. The Motley Fool has a disclosure policy.