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.
https://www.marketwatch.com/story/five-sentiment-indicators-are-telling-us-its-time-to-buy-stocks-especially-this-one-group-11665593380
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
https://www.marketwatch.com/story/inflation-is-going-to-fall-just-as-fast-as-it-rose-and-thats-investors-cue-to-enter-the-stock-market-11665072070
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
https://www.marketwatch.com/story/the-stock-markets-january-rally-was-real-and-these-stocks-and-etfs-can-help-you-ride-the-next-leg-up-ef4d9feb
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
https://www.marketwatch.com/story/if-battered-bank-stocks-look-tempting-now-these-buying-tips-can-help-you-cash-in-53943e24
Bank insider action tells us the battered financial sector is a buy: These 4 regional bank stocks are tempting those in the know.
https://www.marketwatch.com/story/bank-insider-action-tells-us-the-battered-financial-sector-is-a-buy-these-4-regional-bank-stocks-are-tempting-those-in-the-know-8e81f36d
May 30, 2023 (bullish in a pullback):
Technically speaking, a new bull market started last October. Buy on weakness.
https://www.marketwatch.com/story/technically-speaking-a-new-bull-market-started-last-october-buy-on-weakness-a24e1a9e
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
https://www.marketwatch.com/story/this-new-bull-market-is-just-getting-started-buy-stocks-on-weakness-89a37773
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
https://www.marketwatch.com/story/4-reasons-to-start-buying-the-august-stock-market-weakness-and-what-to-buy-475ea4dc
Sept. 25, 2023:
Let’s debunk the bears’ top arguments against further stock market gains
Reports of a recession have been greatly exaggerated
https://www.marketwatch.com/story/lets-debunk-the-bears-top-arguments-against-further-stock-market-gains-c04db0cc
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
https://www.marketwatch.com/story/its-time-for-you-to-take-a-deep-breath-and-buy-stocks-b00ec6a0
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.
No comments yet.