2023 thoughts and predictions

Investment Analysis Clubs Where Angels Fear to Tread
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Nothing too much will surprise me, but my gut leans towards:

  1. new lows (compared to 2022) at some point in 2023
  2. 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:

  1. 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.
  2. 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.
  3. 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.
  4. 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?

glta!
Dreamer

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That’s an interesting thought. The dot-com debacle was too long ago for me to recall the details but I think I remember the high-fliers withering on the vine. Some went under, some were acquired, some were permanently impaired. When the bathwater was finally thrown out, plucking the survivors (I hesitate to say babies, although that’s the metaphor) proved to be a winning strategy. Arm Holdings at $3 was one of my all-time best picks.

My memory may be faulty and those days were different than these days in many ways, so the comparison could be silly, but it will be interesting to see it play out.

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i see more downside/pain ahead. Check history:

sp500_bear_markets_20221230.png.cf2e07edec0c556dbac1e59c26b05287
sp500_bear_markets_20221230.png.cf2e07edec0c556dbac1e59c26b052871920×1536 160 KB

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I agree that I think we see more pain in the market in the first half.

Only thing that bothers me about that thinking is it seems everyone else is thinking the same thing.

Going into this year with no expectations so that I can be flexible.

Mostly just looking for good price points. Will be difficult to time the exact bottom unless we get a 45+ vix capitulation event.

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What’s your Twitter name?

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if you were asking me, here you go:

https://twitter.com/LucidDreamer397

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I spent a little time today, off and on, reading this thread. I am not sure which I have in shorter supply, Thoughts or Predictions. But with the wisdom of my age and last vestiges of rationality, I did come to the conclusion that I should go long Thoughts and short Predictions.

Lone prediction: The broad market indexes will be both higher and lower during the remainder of the year than they are today. And what I think is that my focus needs to be 12/31/2024. Assuming that Russia, the U.S. and China haven’t vaporized two or three billion people, the market will survive the central banks’ hubris driven fiscal experimentation and we will have ample opportunity to pick companies whose stock price will be 50% to 100% higher by that date. (Quick head smack, you realize, KC, that 2024 is a presidential election year. Maybe 08/312025).

My plan is 20 or more stocks, 5% cash. My trial list is three big IT dogs: SNOW, CRWD, DDOg; three smaller IT companies: FOUR, BILL, GLBE; Two dividend payers: SPG, OKE; Six old line revert-to-mean cigar butts: OLED, VFC, MNRO, PVH, SWK, SMG; UPST because it is UPST…;

I know, that’s only 15. But I have time, and I have something like 350 MF active recommendations, TickerTarget, Saul’s, Dreamer. And a dart board.

I have modest goal. (Sarcasm emoji here). 40% CAGR for 2.5 years. Can I book my ATH Club reservation this far in advance?

KC

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Well, the comparison is not silly so much because the times are so different (which is true, too), but because the dot-coms were companies that were grossly overvalued because they did not produce anything and/or have any profits. The Saul companies were chosen because they are in highly useful businesses that are highly profitable, the opposite of dot-coms.

Pete

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Well, yes and no. If you’re talking about the Pets.com of the world, then I agree. However, there were many other companies that got caught up in the frenzy. I remember following names like JDS Uniphase, Avanex, Sandisk, Cree, Network Appliance and many others. Tech companies in fiber, memory, and networking that were on the cutting edge and were expected to dominate one day but didn’t live up to the expectations.

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and “dot-com bust” refers to a time-period, and not all the stocks were crappy SPAC-esque zero-profit entities.

You also had MSFT (which wouldn’t regain their ATH for 15 years!!!) AMZN, and CSCO…all real companies that are still monsters…all severely beaten down.

Saul stocks aren’t safer in a downturn in a high-inflation/high-rates/QT environment.

Dreamer

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That board hasn’t had quite that uptick (yet) although as jonwayne pointed out, NET and CRWD have done well YTD, but so has the broader tech market (MMAAAN) Meta/msft/apple/amazon/alphabet/nvidia. Normally, if MMAAAN put up 20-80% numbers, I would have expected Saul stocks to overperform or at least match that. Perhaps that continues to show the effects of bull-market-brain on me and most others who made bank on tech from 2016-2021 or so.

I will probably stop picking on them now that the confusion is kicking into high gear.

This tv show ran before kids…it was called Gorilla Game in late 90s and then the dotcom bust hit starting in March 2000. Lots of disillusionment then, too.

When a lot of folks wondering when their “beaten-down” stocks will finally recover, and I am sitting over here waiting on the capitulation and new lows to finally kick in, you know everything is all out of whack from how things used to be.

Shed the dogma. Keep an open mind. Take in info, but draw your own conclusions that you are willing to live with, or pay someone to do the investing for you (so you can be upset with them and not yourself, if needed).

I am not certain what will happen next. I think companies being worth $2T+ doesn’t make a whole lotta sense if you aren’t getting dividends or something out of it. Then again, ol’ Warren doesn’t pay dividends, even if it feels like BRK is old school.

Market cap is always lurking in back of my mind. Because if SBC doesn’t matter, why do stock buybacks ever have any impact at all? Riddle me that, batman. Of course it matters.

ZM hit $61, by the way. Lower than IPO.
Bet the market cap is higher than when they IPOd though.

Dreamer

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