Who got the market call right in 2023 and who did not

It’s the turn of the year. So, the financial media are full of forecasts and retrospectives.

A common meme is that no one saw the huge 2023 bull market gains coming.

Here are a few headlines from the Wall Street Journal:

What Did Wall Street Get Right About Markets This Year? Not Much

Almost no one thought 2023 would be a blockbuster year for stocks

How I, and Everyone Else, Got 2023 So Wrong

Allow me to humbly disagree. Not everyone got it wrong. I got it right. In this stock letter I was bullish at the exact low (October 12, 2022) ahead of the big 24% 2023 stock market advance, and opportunistically during the pullbacks along the way.

In case you are not a subscriber, here are ten columns I wrote for MarketWatch predicting market strength.

Oct. 12, 2022 (the exact low):

Five sentiment indicators are telling us it’s time to buy stocks, especially this one group
“When everyone’s crying, you better be buying.” Michael Brush explains how to read investor psychology.


Oct. 6, 2022 (Remember when it was a crime to call inflation transitory?):

Inflation is going to fall just as fast as it rose, and that’s investors’ cue to enter the stock market


Feb. 23, 2023 (bullish in a pullback):

The stock market is just taking a breather after January’s monster rally. These stocks and ETFs can power the next leg up
The current pullback is buyable; use the weakness to add to positions


March 2023 (bank fears overblown):

If battered bank stocks look tempting now, these buying tips can help you cash in
There are good reasons to make this contrarian investment


Bank insider action tells us the battered financial sector is a buy: These 4 regional bank stocks are tempting those in the know.


May 30, 2023 (bullish in a pullback):

Technically speaking, a new bull market started last October. Buy on weakness.


June 27, 2023 (bullish in a pullback):

This new bull market is just getting started. Buy stocks on weakness.
How to tap into the market’s uptrend in the second half of 2023


Aug. 23, 2023 (bullish in a pullback):

4 reasons to start buying the August stock-market weakness — and what to buy
The current pullback is just a healthy correction in a bull market


Sept. 25, 2023:

Let’s debunk the bears’ top arguments against further stock market gains
Reports of a recession have been greatly exaggerated


Oct. 7, 2023 (bullish in a pullback):

It’s time for you to take a deep breath and buy stocks
Stocks and bonds look attractive because inflation is controlled and rates aren’t going higher


So, what’s my outlook now? I’ll take a cue from one of the financial media prognosticators I mentioned above who is still cautious. “With U.S. stocks so expensive already, the odds aren’t good,” he says. I disagree. First of all, if you take out the Magnificent 7, the stock market does not look that expensive. And there are definitely pockets of value in energy, smidcaps and China.

More importantly, from the contrarian perspective these cautionary comments on valuation serve as a useful sentiment gauge. Sentiment has risen quite a bit from October 2022 lows. Many people now say it is too high. I disagree. By how I read sentiment, there is still enough caution out there to create the necessary “wall of worry” for stocks to climb. Plus, inflation is under control, there will likely be no recession, and the Fed may be cutting rates this year.

The bottom line: Pullbacks and corrections can happen at any time, but I expect 2024 to be another up year for stocks, though not as strong as 2023.

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