I tried to highlight, uh, and continue my, uh, kind of contrarian bet that we're going to see increased global conflict next year, again, driven by, you know, incumbents trying to hold on to political office and increase inflation and fueling economic growth and the American response to China. So in a world of increased global conflict, I think assets that do really well are energy, commodities and energy stocks. I recently made a big bet on energy stocks. Defense stocks. And it used to be a gold. It could be the case that bitcoin uh you know sees a role as being a defensive position in portfolios in a world of, uh, of war and conflict.View on YouTube
What was predicted
- 2022 would see increased global geopolitical conflict.
- In that environment, energy commodities and energy stocks and defense stocks would significantly outperform broader markets.
- Bitcoin might gain a role as a defensive portfolio asset in a world of war and conflict.
What happened in 2022
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Global conflict clearly escalated. Russia launched a full‑scale invasion of Ukraine on February 24, 2022, the largest European conflict since World War II. (en.wikipedia.org) U.S.–China tensions around Taiwan also spiked, notably during Nancy Pelosi’s August 2022 visit and China’s encircling live‑fire exercises. (en.wikipedia.org) That’s a clear increase in geopolitical conflict versus prior years.
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Energy commodities and energy stocks massively outperformed broad equities. Brent crude’s average price jumped to about $101/barrel in 2022 vs ~$71 in 2021, reflecting a major energy shock. (statistico.com) The S&P 500 Energy index returned about +65.7% in 2022, while the overall S&P 500 had a –18.1% total return—its worst year since 2008. (spglobal.com) This is exactly the kind of “significant outperformance” of energy he described.
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Defense stocks also beat the broader market. A broad U.S. defense ETF, iShares U.S. Aerospace & Defense (ITA), returned roughly +10% in 2022, while the S&P 500 was down about 18%. (financecharts.com) Many major defense names—Northrop Grumman, Lockheed Martin, General Dynamics, etc.—posted gains in the 20–40% range that year, far ahead of the market. (dividend.com) So his call that defense stocks would outperform in a conflict‑heavy year was borne out.
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Bitcoin emphatically did not act as a defensive asset. Bitcoin’s 2022 return was about –64%, a far steeper loss than broad equities and consistent with its behavior as a high‑beta risk asset, not a hedge or safe haven. (statmuse.com) It did not assume a defensive role in portfolios during the inflation/war shock of 2022.
Overall assessment
- The core, testable parts of Friedberg’s prediction—more geopolitical conflict and strong outperformance of energy and defense stocks vs. the broader market in 2022—were clearly correct.
- His Bitcoin remark was explicitly tentative (“it could be the case that bitcoin…sees a role”) and turned out wrong, but it was framed as a possibility rather than the main thesis.
Because the main forecast about conflict and the performance of energy and defense equities was accurate and central to what he was arguing, this prediction is best classified as "right", with the caveat that the Bitcoin sub‑call failed.