Poll - Mid Year Forecast - what does SPX finish at in 2023?

Investment Analysis Clubs Where Angels Fear to Tread
1

Ok campers,
We are at 4500 in SPX (approx).
A lot of folks are telling me about how stocks aren’t actually overvalued, or how it is a glorious new bull market, or that economy is fine. Everything is just fine.

So we should be able to accurately predict what the S&P500 (SPX) looks like in about 6 months, on 12/31/23.

And, yes, that date is literally 123 & 123. Spooky!

What say you all?! Flat, higher, lower? Pick whichever you feel will be the closest choice.
-Dreamer

  • 4500
  • 4000
  • 5000
  • 6000
  • 3400
0 voters
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2

I’m not really predicting anything, just being pretty matter-o’-fact and playing along. I said 5000. It’s only about 11% over today. It’s already up… um… 17-ish% from 1 Jan 2023. From that we can conclude it’s having a good year? There will be some ups and downs along the way e.g. “Summer Swoon”, “The September Curse”… leading into “The Good Season” Nov-May. I don’t see 11% as unachievable or a particular stretch. If it finishes up only 8 or 9% I’ll take that as a moral victory. 8%, 10%, 11%…? It’s all the same, stock market-wise.

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Anybody look up the history of this stuff? There are usually articles floating around showing perfectly good historical data with various conclusions such as:

Every time the stock market finishes the first half of the year up X% it ends the year up at least X%. Or:

Every time interest rates do this or do that after a down year in the market, the market finishes up x%.

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My relatively uninformed opinion is that the market will go up until the yield curve uninverts.

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You lurkers…waiting years to post, and saving up gems like this!

Let’s check.
March 2007, about market peak before GFC hits and market crashes thru 2009.

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2023 (current)

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I am sure everything will be fine. Just fine.

Dreamer

6

just for fun, here is a bonus chart:

Sept 2000 aka the JNPR (Juniper) craze stock peak of tech boom.
Which feels a lot like what I imagine hindsight will tell us of SMCI.
I think NVDA is to CSCO (2000) what SMCI is to JNPR (2000).

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Enjoy the weekend all!
Dreamer

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7

I am very young and don’t have a ton of money invested so I would certainly love a market reset. I do agree that stocks appear to be quite overvalued right now given that the forward earnings yield is about the same as short term bonds. But I do wonder if the mania could continue for a while. What will be a catalyst for the seemingly inevitable correction? Will it be the unemployment rate finally starting to edge up? Will it be weak q3 guides? When will gdp growth actually go negative because right now it doesn’t appear it will be this quarter or even next.

Also, I’ve definitely lurked for far too long. I started investing a few years ago so wanted to take in a lot before I said much.

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https://www.bloomberg.com/news/articles/2023-06-08/qt-will-soon-begin-to-bite-with-10-hit-to-liquidity-bnp-warns

https://www.cnn.com/2023/05/19/economy/quantitative-tightening-global-impact/index.html

so if the market liquidity that made everyone with a dart a bull market success story is going away, that is ok, because the consumer still is flush with cash, right?

Oh.

I am sure it will be fine.

Dreamer

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9

I have no idea but I am still hedged against a crash with an overweight cash position (nearly 1/3 of my financial assets), stocks that I don’t need to sell, and SS checks that I am rolling into low cost etfs on a monthly basis. I am 67, focused on grandchildren, hiking, working my daughter’s orchard, and travel with ispouse.I really have nothing of value to offer here any more- if I ever did.

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I got burned by CSCO in year 2K eventhough it is very less money. However, the difference that I see in year2K than now is everything was going up in that year, like daily, it is just crazy. Currently, you have AI as the catalyst for NVDA, wherein there was no catalyst for CSCO at that time. They just keep doing the same thing building switches and routers. I guess we shall see but you maybe right so I am not betting the farm on this rally but cautiously watching and participating in it. Learned so much in 2022 :frowning:

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11

I’m sorry to say but you may have become a perma-bear.
Only seeing the dark side of economic news.

You escaped much of the carnage of '22 and maybe
lost a feel for when a good grower has hit a decent price
and did not start building some buy & hold positions.
POMO only goes so far…
?Maybe? :person_shrugging:

I too am sitting on about 30% cash, there’s a lot of us out there…

JT :flamingo:
+25% thru 7/14

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Cisco was gorilla in route/switch and we were transitioning from dialup to broadband in homes and businesses.

Juniper was more niche for the big Telcos, i believe, a subset of overall route/switch.

The analogy i see is:

NVDA is gorilla in GPU workloads. We are transitioning from plain ol dc big data crunching machine learning ML to more advanced AI. But AI is just another GPU workload easentially.

SMCI is a niche subset adjacent to the AI hype, in that GPUs get attched to their servers. Replace Telcos w Cloud titans here.

Awfully similar to me.

Cisco still the king 23 years later. Juniper still in business and still more niche in comparison, 23 years later.

I dont see NVDA and SMCI going anywhere soon either…just saying the stock prices have gotten out of whack.

Dreamer

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On your first point - that is what everyone told me in 2021, too.

On your second point - agreed. I saw some good prices and did buy a few, but didnt hold on for long at all, due to worrying too much about the macro backdrop.

We live. We (hopefully) learn.

Dreamer

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14

The 1999/2000 crash IMO was very similar to 2020/2021 (IN HINDSIGHT, in the overall market, not naming specific stocks), but today is not 2000. A few stocks may be, but not the market in general (again, IMO).

And eventually you will be right again. But opportunity cost cuts both ways, and staying out of the tech market for the past 6 months has cost gains of 40-50% so far this year. How confident am I they’ll continue? Not very, as I’ve been taking profits the past month or so (10-20%), but I will definitely not sell out of the market completely, because I do believe fully in the Fool mantra that stocks go down faster than they go up, but they always go up more than they go down.

Have a good weekend, all.

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15

Enjoyed this thread immensely, both for content and seeing some of the oldtimers and lurkers add civil smarts to the conversation!

I’ve mostly been out of the market since COVID bit, and done well with alternative private investments, but those were unique and time limited opportunities. I am looking for my reentry point.

Not yet.

david fb

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If you look at the 200 day moving average column, and you think that the S&P will do at least as well as it has for the first 6 months one would be thinking another 40-50% rise or even 30% is left should the market continue on the trajectory that we have seen the last 6 months. I agree with david above, thanks for a very interesting thread…doc

edit: this is from barchart.com

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17

Dreamer,

I agree with Foodles and everyone else, including you…Yes, you will eventually be right…but the point is, all these stocks and even stellar ones fell, A LOT, in the last year and a half…and have turned around for close to 6 months now.

Sure, you need just one of the cards to fall, and many will follow…However, no one can predict the time between now and then…In fact, one of the articles you posted from May has valid points why market should fall…but the fact remains that has actually ripped from even that point!

There is another point that I would like to discuss on…and will do on a separate post, to avoid dilution.

Charlie

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We have elections near the corner … I do not think government want to face recession situation before elections. Currently they targeted Inflation and inflation already falling so once year end reaches there focus shift to making every one IRAs become rich again like trump era. So that they can say they controlled inflation and made IRA accounts high… I am sure next year fed reduces rates because this time bear market happened because of fed rates.
Unless unemployment increase this market no way can fall further. Just want unemployment number closely from now onwards and fed what they do next year decide next 2 years upside

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19

There was a LOT of money sitting on cash when 2023 started, and many were caught unawares…and even now, I am supposing there is still quite a lot of money on the sidelines…

Lets say Dreamer is right…and the market falls…what do you think will happen to all the money that is still sitting on the cash…For example, lets say AAPL falls by 20%…I don’t bet but if I do, I would think there will be tons of institutional investors/ hedge funds who missed out on the initial rally who will jump in.

So that brings me to the actual question I had…

Dreamer, you had posted some graphs extrapolating data from the 2000-2001 or may be it was 2008-2009 crash and compared it to the current one

However, is there a way to know how much money was sitting on the sidelines and cash at those times? and compare it to the current times…perhaps that might reveal an interesting point to ponder.

TLDR: It is possible that the market will fall at some time, but unless it is a black swan event, my guess would be that the big money will create a mini panic, try their best to make others sell, and then load up…

If a black swan event occurs, well, we all will have bigger things to worry about

Or the recession or inflation can cause real pain, and make the current rally the biggest bear market rally ever.

My money is on the first option - At “some” period from now till end of next year, we have a market drop, but in 2025, the market will be higher from even where we are now!

No idea how the individual stocks will do in the meanwhile…I guess the good ones will do just fine, while the zombie stocks will go down a lot.

Charlie

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Doesnt matter what they want. They cant control it. Just like in election years 2000 and 2008.

Dreamer

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