China’s Real Estate Bubble And 5 Other Predictions that Turned Out to be Wrong

2. Bill Ackman: Market Crash on Vaccine Rollout Failure

Prediction: 2020

Hedge fund mogul Bill Ackman made a bold bet that the rising number of COVID-19 cases would trigger a market crash in late 2020. The prediction came after the Pershing Square Hedge fund manager had made more than $2 billion earlier in the year  on betting against the market less than a week after issuing a warning that “hell is coming.”

The $2 billion gain came as the market plunged in March of 2020 as the US was forced to go into lockdown as COVID-19 cases surged. The S&P 500 and Nasdaq 100 fell by double-digit percentages as fear rattled the market. Thereafter, Acman was a vocal critic of the US government’s handling of the pandemic, concerned by the delays in vaccine rollout needed to curtail the spread of the virus.

In November 2020, the hedge fund manager expressed his skepticism about the success of the COVID-19 rollout, suggesting logistical failures and delays. He raised concern that the economy would plunge further amid the lockdown measures. Acman ended up putting a new trade hedging against his equity exposure with insurance against corporate defaults as a hedge against a possible market crash.

Despite the concerns and hedges, the market never crashed as vaccination efforts proved largely successful in 2021. The US successfully vaccinated over 100 million people, with at least 75% of people having received at least one dose.

The US Federal Reserve cutting interest rates to record lows and issuing stimulus packages helped support the economy, triggering one of the biggest Bull Run. The US economy grew by 6.5% in the second quarter of 2021, with more than 4 million jobs created between January and August. The S&P 500 also rallied to record highs of 4,800. Therefore, Ackman predictions were only partially realized.