Well that did not take long. Last quarter we talked about the haves and the have nots: The market narrowed dramatically and AI-driven technology was the only area that produced positive results. We knew this was not sustainable, but we had no idea it would change so dramatically so quickly.
This time seems different than those other times in that the AI- driven Magnificent Seven are not in bubble territory; their businesses are growing at a pace close if not equal to their stock price. This time it seems like the market just keeps overlooking everything else.
Inflation is back in the news. The latest reading of the consumer price index (CPI) came in at 3.5 percent. Does this mean all is lost in the Fed’s fight and it is time to sell everything? Of course not.
Patience is a key ingredient to long-term investing success. This past year we have been recovering from the 2022 bear market, and it has been a frustratingly slow process. The wind finally came back around to end 2023 with a strong rally, which we predicted and were well positioned for.
We continue to hear that higher interest rates are going to slow down our economy. Logic may say yes, but observation says no: In the 3rd quarter, the economy grew at 4.9 percent, which is far and away the best growth we have seen since the first quarter of 2021.
