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Santa’s Rotten Apple
What happened to the Santa Clause Rally? Bahhh humbug! For those less familiar, a Santa Claus Rally involves a rise in stock prices during the last 5 trading days in December and the first 2 trading days in the following January. Over these 7 trading days in question, stock prices have historically risen 76% of the time (to the tune of ~1.3%) – far more than the average performance over a 7-day period. But this year the market received a fat lump of coal. Or more accurately – perhaps a “bad apple”. Some feel that’s potentially a bad omen for the year ahead… giving rise to the popular Wall St. maxim “… if Santa Claus should fail to call, bears may come to Broad and Wall”….
Reverse Goldilocks Coming?
2024 has not started the way we ended 2023. From mine, late last year feels a lot like what we saw at the end of 2021 (and early 2022). At the time, investors chased momentum in fear of missing out (‘FOMO’) – pushing multiples into what I considered ‘higher risk’ territory (i.e., above 20x forward). It was a time to lower exposure. As we start the new year – stocks are taking a pause. And it’s not unexpected given the sharp run higher. However it begs the question… could it be something more than a pause? Of course we don’t know the answer (no-one does). Where there is uncertainty – all we have are probabilities.
89 Books to Make You Smarter
“In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time—none” – Charlie Munger. This post includes a collection of 89 books I’ve read which will make you smarter (and a better investor). Old Charlie also told us “.. if it’s wisdom you’re after, you are going to spend a lot of time sitting on your ass and reading”. Amen to that.
2023 – The Year in Review
2023 has come to a close… and what a year it was. For many, it will go down as one of the more challenging. For others, they will have banked some very attractive gains. In short, the S&P 500 recovered from its worst year in over a decade – finishing the year 24.2% higher. As for myself, my portfolio returned 19.63%. I made some errors this year (which I will discuss) but also had a couple of wins. Net-net – it was a solid year given the unchartered waters we were navigating.