I Hate New Years

This is my least favorite time of the year. Some people look forward to a new year, with all the potential and possibilities. I don’t look forward to starting at zero and trying to think about how I am going to have a profitable year again. I’ve been doing this for a while, and I’ve had good years and bad years, with some okay years sprinkled in between. Last year was an okay year. I haven’t been genuinely happy with my performance since 2020, which was the fattest pitch we’ve gotten in decades.

Also, for the last couple of years, I’ve been asked to come up with predictions for the new year. I’m not doing that anymore. The predictions ended up being about 50% right and 50% hilariously awful. I don’t have any particular edge in predicting things 12 months out. Nobody does. It’s worth pointing out that Byron Wien didn’t come up with year-end predictions—he came up with year-end surprises. What would surprise people the most? That is usually a good way to start thinking about the year ahead.

Surprises in Store

So, what would surprise people the most? Stocks going up, for starters. I think it’s worth pointing out that I am taking as much abuse on Twitter these days for being bullish as I was for being bearish back in 2021.

Some trades are just obvious. Like, everyone knows that Tesla (TSLA) is going to trade at the same valuation as Ford (F). Everyone knows it’s going down the tubes. TSLA is a pure sentiment trade, which, in some respects, makes it easy—as Peter Atwater says, it isn’t so much a stock as it is a measurement of the fortunes of its founder, Elon Musk.

Elon has waded into this Twitter mess, and it is hurting his brand and taking up time that would probably be better spent on TSLA. People are becoming unenamored with him and looking to buy electric cars from other manufacturers. The stock is in freefall. Remember, the bear case is always most compelling at the lows.

But I happen to think this will be a decent year for stocks. We’ll be done with rate hikes in one or two Federal Open Market Committee (FOMC) meetings. The forward curve is pricing in 200 basis points of cuts. If those rate cuts are realized, things could be fun.