Nothing too much will surprise me, but my gut leans towards:
- new lows (compared to 2022) at some point in 2023
- markets may finish even or above 2022 open
So the above means I still expect some sort of final capitulation. While some individual stocks will beg to differ, many of the ones we track, and most in general, haven’t gotten substantially lower than the June 2022 lows…which is over 6 months ago now. Been a grueling, unforgiving, sideways chop slog for a while.
Some catalysts for 2023:
- Ukraine stuff - could get worse, or could be surprising positive end. I think any major change will have a big, but short-lived (1-2 months or less), impact on the market.
- Recession and/or Earnings downgrades. Now that inflation may have peaked, the news may be less about CPI prints or whatever, and more about companies forecasts be revised downward. This may hit SaaS less than say a typical Dow/value company, but I think it still hits most stocks.
- Covid. I don’t really see a US issue with covid, but you never know what a dangerous new mutation may yield. Can’t see forced lockdowns, but rather it could spark a healthcare crisis and/or worker shortages and/or general drops in productivity for businesses.
- Lack of liquidity. I am still a macro guru-in-training. In fact, I aspire to be a trainee - my knowledge here is weak. But just like you get better at sports playing those better than you, I am trying to glean nuggets from the gurus I follow. QE was replaced by QT, Feds raised rates…you can argue this has been priced in, but the lack of free/easy money should be trickling down all 2023, much like earnings pressures.
How about that Saul board?
I think, at some point, they rally hard. 25-40% type stuff, like the previous glory days. Question is, will it be early in 2023, just for them to declare the “all clear” before the rug is pulled out from them, or will they suffer being down/sideways most of the year then get hit with capitulation and then finally get that big v-shaped bounce at end of year? Dunno. Neither would surprise me, but likely the outcome is something I will look back on and go “oh…that should have been obvious.”
Will we see a new ATH post this year?
After being shut out in 2022, that dusty and mold-infested former disco will need a serious fumigation effort for the lucky soul that is able to regain new ATH’s from likely the end of 2021, and walk up to the mic to deliver their oral back-pat. My guess is, yes, we do see a couple. But reality is a lot of folks were down so much in 2022, that they can have a good year in 2023 and won’t quite be back at ATH’s yet. I start 2023 about 10-11% below ATH.
Will the new TMF boards last? Dunno. Probably will last, but not sure if 2018-2021 type activity will resume. Honestly, if Summer of 2022 had started a new raging bull market, my guess is the boards would have been busier. I am sure the new format didn’t help, but I think more likely most would-be posters were subdued, as their normally long-only or LTBH approach didn’t leave them wanting to talk about much, understandably.
Provided Elon doesn’t kill twitter, I will keep my activity going there, for those that want to follow or interact over there, too.
My goal is a 20%+ CAGR this year. I have a feeling Q4 will be the key, if we do hit new lows in Q2 or Q3. Either way, can I avoid pitfalls, can I buy entries at good prices and either hold or sell for good gains along the way, can I benefit from shorts in some spots, and can I catch the eventual wave up when the stock investing universe finally hits bottom?