Forecasting in the business and investing world is an art -- in other words, totally not a science. Most "experts" who try to make binary predictions don't even get their guesses right half the time. But that never stops Motley Fool Money host Chris Hill from asking his colleagues to make "reckless predictions."
In this segment from the Motley Fool Money podcast, analysts Aaron Bush and Matt Argersinger deliver a pair of long shots relating to mergers and acquisitions: One foresees a potential major purchase by a Chinese tech giant, and the other thinks he knows what Warren Buffett's next major buy will be.
A full transcript follows the video.
This video was recorded on Jan. 4, 2019.
Chris Hill: All right, we've got just a couple of minutes left before we wrap up. We do this every year, reckless predictions. Make them reckless. They don't have to be about business, although they can be about business. You can go off the board to sports, pop culture, whatever. Aaron, what do you have?
Aaron Bush: Even though the Chinese trade wars and economic slowdowns will continue to generate headlines, I predict that in 2019, we'll see the largest technology acquisition in which a Chinese company buys a U.S. company. I don't know if that's Tencent buying one of the big three video game companies, maybe Alibaba acquires eBay as a way to get into U.S. e-commerce. Maybe Didi, which is larger than Uber at their last valuation, acquires Lyft as a way to get to the U.S. markets and get a partnership with Waymo. I don't know. There are interesting possibilities.
Hill: That would be fascinating! Matty, what about you?
Matt Argersinger: I think Warren Buffett's going to buy an airline.
Hill: [laughs] Really?
Argersinger: Berkshire Hathaway already owns major stakes in all the major U.S. airlines. The industry has changed. Consolidation has made this much more a value creator than a value destroyer. You have a strong airline like Delta that's actually been assigned an investment grade credit rating. It's buying back shares and paying a dividend, and the valuation is very cheap. This is a different industry now. Much like how Buffett viewed the railroads 10 or 15 years ago, I think he views the same with airlines today.
Hill: That would be maybe the greatest example of someone taking emotion out of investing, when you think back on how much Buffett used to openly hate the airlines as an industry.
Aaron Bush owns shares of TCEHY. Chris Hill owns shares of EBAY. Matthew Argersinger owns shares of DAL. The Motley Fool owns shares of and recommends BRK-B and TCEHY. The Motley Fool owns shares of DAL. The Motley Fool recommends EBAY. The Motley Fool has a disclosure policy.