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Four Decades of Accurate Predictions

Kiril Sokoloff, founder & CEO of 13D, has foreseen many of the great secular trends of the last 40 years.

1977-1978

1979-1980

1980

1981-1982

June 1983

June 1984

1984-1985

1986-1992

1988

1991-1992

1992

January 1994

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1995

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1997-1998

Fall 2000

March 2001

2001

August 28, 2001

2002

2003

January 2006

February 2007

June 2007

June 2008

December 2008

March 2009

October 2012

December 2015

2016

2017-2018

2018

April 2019

August 2019

September 2020

January 2021

Present at the birth of supply-side economics

Amid the prevailing pessimism, Sokoloff spots a seismic shift on the horizon—the first signs of free-market capitalism, which will forever change the world for investors. In 1977, he approaches Jack Kemp, one of the creators of “supply-side economics,” to co-author a book about restoring incentives. Supply-side economics becomes the basis for Reaganomics.

Commodities’ super-cycle peak

America is obsessed with fears of hyper-inflation and the impending virtual collapse of the U.S. dollar. Sokoloff predicts a once-in-a-generation boom in commodities, commodity stocks and other tangible assets. This would end the commodity bull market that began in 1942. He views this as a coming super-cycle peak, recognizing that the most powerful economic shifts almost always occur after a parabolic blow-off.

Free-market capitalism will spread around the world

Ronald Reagan is elected President and Sokoloff believes free-market capitalism, supply-side economics, disinflation, and good economic management will spread around the world. He coins the expression “The Reverse of Gresham’s Law: The Good Will Drive out the Bad.” In subsequent years, he travels around the world to the nations that are about to institute good economic policies.

“Is inflation ending? Are you ready?”

Just as inflationary expectations become embedded in America’s psyche, Sokoloff takes a contrary view. He predicts a long-term era of disinflation, loss of pricing power, deregulation, increased foreign competition, the collapse of hard asset values, a soaring U.S. dollar, declining U.S. interest rates, and soaring stock markets. In 1982, he co-authors the book, “Is Inflation Ending? Are You Ready?”

The coming take-over boom

U.S. stocks are selling well below break-up value, long-term interest rates are yielding double digits and the take-over boom is about to begin. As the world’s expert on 13D filings—which are required to be filed with the SEC within 5 days of buying a 5% position—Sokoloff starts 13D Research. Over 178 recommendations were taken over by 1986.

Long-term U.S. Treasuries offer the best buying opportunity in history

Bonds are considered “certificates of confiscation.” Sokoloff takes a contrary view, arguing that long-term U.S. Government bonds offer a once in-a-lifetime opportunity. Indeed, the best buying opportunity in bond-market history. Sokoloff recommends buying 30-Year U.S. Treasury bonds yielding 14%. (At the time, they were the only long-term non-callable bonds.) Week after week, Sokoloff repeats the buy recommendation on 30-Year Treasuries.

“The highest interest rates in capitalism will be followed by the lowest”

In hundreds of speeches across the world, Sokoloff predicts “the highest interest rates in capitalism would eventually be followed by the lowest rates.”

The coming buying opportunity in distressed and bankrupt securities

Foreseeing that Mike Milken would be indicted and the liquidity in the high-yield bond market would evaporate, Sokoloff begins research on distressed and bankrupt securities.

Mobile phones will change the world

Sokoloff discovers a short paragraph in a newspaper that foretells the future of the world. He learns it took 70 years to put a land-line system into the U.K., 50 years for the U.S., 30 years for Japan, and 20 years for South Korea. But a mobile-phone system could be installed in 18 months. He saw clearly that the mobile phone would spread across the world and allow all humanity to access all information. This would be very bullish for emerging markets and would change the nature of commerce and the flow of information.

Hong Kong stock market sells at a China discount, when it should sell at a China premium

In the early 1990s, almost every foreign brokerage firm turns pessimistic on Hong Kong. Sokoloff, on the other hand, sees an unprecedented opportunity. He opens an office in HKG and recommends Hong Kong/South China, saying it may offer the best investment opportunity of the 1990s. The Hong Kong stock market is selling at a “China discount.” Sokoloff believes it should sell at a “China premium.” Sokoloff sponsors many trips for his clients to Hong Kong/China in 1991-1992, and they invest well over US$10 billion in the Hang Seng Index close to 3,500. Sokoloff co-founds the first pure Asian hedge fund.

The coming bull market in the U.S. dollar

Pessimism on the U.S. dollar has reached an extraordinary extreme, with almost universal belief the U.S. has lost competitiveness. Sokoloff takes a contrary view, turns bullish on the U.S. dollar, and argues “a vigorous U.S. economy and export machine would overwhelm all the naysayers.”

Time to sell positions in Hong Kong/South China

After rising from 3500 in the early part of the decade to 12,500, Sokoloff issues a sell signal on the Hang Seng index and closes 13D Research’s Hong Kong office—just as many foreign brokers are moving back to Hong Kong.

Brazil will embrace free market capitalism and defeat inflation

Brazil has been unable to control its inflation for decades. The inflation rate is over 5,000% per year. Fernando Henrique Cardoso, who understands how to beat inflation, announces he will run for President. Sokoloff recommends investing in Brazil on the premise he will be successful, which he is. The Ibovespa rises by 382.5% from February 1st, 1994, to January 31st, 1995.

The coming boom in technology and internet stocks

Sokoloff turns bullish on technology, which has been a profitless prosperity since 1983. Sokoloff foresaw the implications of an explosion in technology as access to the internet soars through the mobile phone and installation of high-speed access. Sokoloff co-founds one of the first pure technology hedge funds. The S&P Technology Index rose 40% in 1995.

We begin our series on disruption

Sokoloff begins research on disruption, what we called at the time “creative destruction.” Over the ensuing years, 13D Research launches coverage of over 100 different disruptions—we doubt we missed many—including hundreds of winners and losers.

The coming emerging Asian Financial Crisis

Is Asia headed for a major bust? Most emerging Asia stock markets have traded sideways for 2 years and now appear to be breaking down. Malaysia has built the world’s highest building and is constructing the world’s longest building—traditionally a sign of a major secular top. This becomes known as the emerging Asian Financial Crisis.

The Asian economic virus will spread and no stock market will be immune

As bullishness in the U.S. hits a generational high, Sokoloff warns of global cooling and global demand failure. Sokoloff predicts the Asian virus will spread and that no stock market anywhere in the world will be immune. He notes that nearly one-third of global GDP is in a depression or financial crisis of some kind. Asia accounted for over 50% of world GDP growth in the 1990s. Now, the engine for half of global growth is plunging into reverse.

Shifting to bearish on the U.S. dollar

With bullishness on the U.S. dollar at the highest point in history, Sokoloff turns bearish and recommends “investing in the euro at 87 cents.”

“Buy Gold Before Central Banks Reflate”

After being bearish on gold for 21 years, Sokoloff recommends gold at $260 an ounce in an article entitled “Buy Gold Before Central Banks Reflate”. Gold becomes one of Sokoloff’s favorite investments for the coming decade.

The coming commodity boom

Fears of deflation are now rampant, as are recommendations to buy long-term U.S. Government bonds. Sokoloff finds too much company in his 20-year disinflation theme and predicts one of the biggest global booms in history, with sharply-rising commodity prices. Five billion people have entered the global economy, and the internet allows them to see what wealthy countries have. Sokoloff believes governments will soon realize that to stay in power they must create a vast number of jobs and very rapid economic growth. He recommends gold, silver, base metals, industrial commodities, water, uranium and their stocks.

13D produces a pandemic-free portfolio

After reading Laurie Garrett’s The Coming Plague, Sokoloff begins a series on pandemics, with 13D Research eventually producing over 100 articles pre-COVID. The investment recommendations, created as an insurance policy, soar over the ensuing decades. We suggested investors have a portion of their portfolio in anti-viral drug and vaccine producers, makers of face masks, early-stage biotechs and other related companies that could help mitigate the crisis. The world is losing the battle against infectious diseases. Climate change has set the stage for more frequent disease outbreaks.

The war over cyber security begins

Sokoloff begins research on cyber security as it has become clear how pervasive and disruptive hacking will become. 13D’s recommendations soar over the ensuing decades. Today, the annual economic cost of cyber-attacks is measured in trillions of dollars. As governments and businesses improve cyber security through AI, quantum-security technologies, and “zero trust” network architectures, cyber attackers leverage the same technology advances to thwart cyber defenses. Cyber warfare is ground zero in the “gray zone,” an incremental and gradual form of conflict, fought on non-traditional battlefronts, representing the most important form of combat in the first half of the 21st century.

Water will become the world’s most precious resource

“The Wars of the Future will be over Water.” As the population grows, water could well become the world’s most valuable resource. The great rivers of the world often flow through multiple countries, creating huge geopolitical tensions. Having read that 80% of water is used by agriculture and subsidized, Sokoloff concludes that investing in water resources has entered a secular bull market.

Islamic Fundamentalism: The World’s Greatest Threat

After studying the growing contagion of terrorism against the U.S. and the record increase in hostilities between Israel and the Palestinians, Sokoloff publishes a memo on August 28th, 2011, entitled “Islamic fundamentalism: The World’s Greatest Threat.” When 9/11 occurs, Sokoloff and his team are prepared for the implications and know where to invest.

13D becomes the biggest bull on oil on the planet

Oil sells for $18 a barrel and after a vicious 20-year bear market, few expect the price to increase. Sokoloff begins to study the risks of the peaking of oil production, which he calls “the most important investment theme of the decade and possibly in the history of industrial capitalism.” He predicts there will be huge winners and massive losers, if peak oil occurs.

13D begins to chronicle extreme weather events, which are occurring due to climate change

Eastern Europe experiences 500-year flooding. It is clear something dramatic is happening in the area of extreme-weather events. 13D Research begins keeping records on extreme weather events, forecasting that they will become so intense that action on climate change is inevitable.

Turning bullish on emerging markets

With pessimism towards emerging markets at an historic extreme, Sokoloff again sees a contrarian opportunity. He sees the emerging world as both the fuel and key beneficiary of the global secular boom. Sokoloff reminds his clients that emerging stock markets are valued at the lowest levels of the last 15 years—P/E ratio of 9 versus a long-term average of 15. Sokoloff also recommends Russia in a memo entitled “Russia’s Turn: A 50 Year Bull Market?”

13D begins clean and renewable energy research

If oil prices are indeed headed significantly higher, renewable or clean energy will boom. Sokoloff launches renewables research. The recommendations soar over the ensuing decades. It was clear to him that as the world confronted the prospect of “peak oil,” renewable-energy sources possessed the biggest upside of all. Solar and wind power plus battery-storage technologies are now the cheapest source of power for over two-thirds of the world. Renewable energy and storage technologies are now entering a new phase of disruption, where it will be cheaper to build new solar and wind capacity, plus batteries, than to keep existing coal and natural-gas plants operating.

The coming bull market in China

China has been in a four-year bear market, while the world’s stock markets have boomed. China is totally lost under the radar screen. In another contrarian bet, Sokoloff turns bullish on China’s stock markets, noting that the government wants the stock market to reflect the powerful performance of its economy. Sokoloff predicts the China stock markets will be the world’s best performers for the five-year period beginning 2006. SHCOMP rises 5-fold in the next 22 months.

Capitalizing on the coming bull market in oil

With WTI crude oil futures trading in the low-to-mid $50s, Sokoloff recommends buying December 2008 crude oil calls with a strike price of $100.

The coming era of inhuman volatility

Sokoloff’s new mantra: “Governments can and will do anything. We are entering an era of inhuman volatility.” The outcome of the credit crisis is uncertain, so we must invest based on how we think markets will react to government intervention.

Closing out long positions in crude oil

With WTI crude oil selling at $143, Sokoloff recommends selling the oil calls purchased in February 2007 for a 55-fold gain in 18 months.

The coming sovereign-debt crisis

Sokoloff writes: Here comes “quantitative easing”. The financial crisis will soon become a sovereign-debt crisis.

QE is bullish for equities

Sokoloff predicts one of the biggest stock market rallies in history is on its way.

Turning bullish on Japanese equities and bearish on the yen

After having been bearish on Japan since the bust, Sokoloff turns bullish. Shinzo Abe has announced he will run for Prime Minister and says he will take over the Bank of Japan if it doesn’t change monetary policy and force a weaker yen. Sokoloff recommends shorting the yen and going long Japanese equities.

The cycle of wealth distribution begins in China

On a visit to Beijing, Sokoloff learns that a new leader has been chosen for China and his number one goal is to launch a major anti-corruption campaign. This was the first indication that the long period of global wealth creation was headed towards wealth distribution.

“The Last Shall Be First”

Sokoloff authors a memo entitled “The Last Shall Be First.” In another contrarian bet, Sokoloff turns bullish on gold and gold miners. The bear market since 2011 has been ugly and at $1050, gold is incredibly undervalued.

Donald Trump will win

Sokoloff predicts the election of Donald Trump because of the rising tide of populism and the anger and frustration of those left behind. Trump’s presidency will be dominated by his theory that life is a zero-sum game: there is one winner, and one loser. Trump’s presidency was easy to predict based on a close reading of his book The Art of the Deal.

Supply Chains: Crossing the Rubicon

Sokoloff argues the decision by the Trump administration to cut off technology exports to ZTE will be seen as a historic turning point in the sanctity of supply chains. This will change the world forever. The U.S., China and the E.U. will all push for self-reliance, which means duplicate supply chains and higher costs.

The cycle of wealth distribution will spread around the world

Sokoloff predicts the nearly 40-year trend toward wealth creation is drawing to a close. Wealth distribution will spread and become the dominant theme for the next several decades.

13D turns bullish on Bitcoin

13D Research turns bullish on Bitcoin at $5300. Our thesis remains that Bitcoin’s programmable fixed-cap supply, coupled with continued network adoption, are laying the foundations for a non-sovereign, censorship-resistant and easily-verifiable digital store of value.

Mass tourism, accounting for 10% of global employment, is at major risk

Mass-tourism is discretionary and subject to a variety of risks, including recession and geopolitics. We warned that the global economy was highly-dependent on mass-tourism and if for any reason it was interrupted, the consequences could be devastating. Six months later, COVID-19 shut down cruise lines, airlines, and hotels worldwide, triggering mass layoffs across the industry and beyond. The result, as we warned in 2019, is what looks like a permanent hole in the global labor-force.

Inflation is coming. Are you ready?

Based on market action, Sokoloff and his team predict the return of inflation with a vengeance. Wealth distribution is inflationary. The switch from capital to labor is inflationary. Supply-chain duplication is inflationary. Demographics have turned inflationary. China is no longer exporting deflation, but inflation.

The coming super-cycle bull market in copper

13D Research turns bullish on copper and the other metals essential to EVs: cobalt, nickel, lithium. Sokoloff calls copper the most important supply bottleneck in the global economy.

Review this collection of sample articles and interviews:

The Power of Contrary Thinking

Kiril Sokoloff on the Coming Bond Bear Market

Kiril Sokoloff

Founder/CEO 13D Research & Strategy

Meet Kiril Sokoloff

Kiril Sokoloff founded 13D Research & Strategy in 1983. For decades, he has been an active yet low-profile global investment strategist, thought leader, and visionary.

I’ve enjoyed 13D’s work for many, many years.

Stan Druckenmiller

Kiril Sokoloff is a breath of pure, fresh investment oxygen. He is invaluable because he is an original thinker and is not afraid to take extreme views.

Barton Biggs

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Kiril Sokoloff is a man of high character which is a rarity in many quarters. I have been an avid subscriber to 13D for several years. It is the best service that I know of. I have been reading investment letters for 60 years. Kiril Sokoloff is a deep thinker and amazingly well-informed. The weekly letter is eclectic—not solely related to investment matters.

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Chairman and Managing Director Sun Hung Kai Properties Limited

I am impressed by his strong passion in reading, and his unmatched depth and breadth of knowledge and wisdom. Every time I see and talk to Kiril, he never fails to amaze me with his understanding of history and foresight…how he could look ahead of the curve; and that is always inspiring and thought-provoking.

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