Friends
Well, here we go. As we enter 2024, I begin my 40th year in the business. About the only thing I know for sure after 39 years as a market observer is that you can’t predict what markets are going to do. Heck, just look at the predictions from pundits at the beginning of any particular year and you can see how wrong most are by year end. Stay in a bullish stance and you will be right about 75% of the time. Stay in a bearish stance and you will be right eventually (although sometimes it takes years), but at what cost? When I started in the business the S&P 500 was at about 185. It closed 2023 at 4,770. If my simple math is correct, that’s a gain of over 2,500%! So, it appears over long periods of time (my career for example) it pays to be bullish. Having said that, there are certainly times when things get overheated /overpriced and a reset occurs. Maybe we are due for one now. Again, I don’t know but after 39 years, nothing surprises me anymore.
As for today, those who were waiting for tax reasons to sell had the opportunity to get after it today, especially in the tech sector. And they did. By the close, the Dow Jones Industrial Average was up 25 points to finish the day at 37,715. The S&P 500 was down 27 points to close at 4,742. The Nasdaq Composite Index was down 245 points to close at 14,765. Gold was down $4 to trade at $2,067 per ounce, while oil was down $1.09 to trade at $70.56 per barrel WTI.
If you wonder if today’s environment is scary and nothing like the past, I will remind you that through 39 years I have seen a crash in 1987 where stocks went down almost 23% in a day. A depression was predicted- it didn’t happen. I saw crisis in Asia in 1997 and a hedge fund blow up in 1998 that caused sharp selloffs. I saw a massive tech stock bubble form throughout the nineties only to see the Nasdaq drop nearly 80% in the early 2000’s. I saw the fears of Y2K and the effects of 9/11, Enron, WorldCom, Iraq Wars, Bernie Madoff, Stanford Financial (those here in Houston will remember), the Great Financial Crisis, subprime mortgages, the collapse of Bear Stearns, the collapse of Lehman Brothers, negative interest rates, credit default swaps, a pandemic, meme stock speculation, an inflation spike, and supply chain disruption. I’ve seen the market fall many times including twice more than 50% for the S&P 500 (early 2000’s and 2008-2009). But as we sit here today, stocks are more than 2,500% higher than when I began this journey. I look forward to reporting to you in this my 40th year of guiding investors through all the noise and debris that investing in the markets holds. I hope you have been enjoying the ride with me. Let’s have a great 2024.
Have a nice evening everyone.
