There was no shortage of drama this year, and there’s been something for everyone.
AI mania, bank failures followed by VCs inciting bank runs, Ozempic miracle drug euphoria, mass tech layoffs coinciding with historically low unemployment, business booming in the secondhand market, Taylor Swift and Beyoncé fandom, international players taking over the NBA, Israeli-Palestinian conflict. The list goes on.
Let’s look at these through a few charts…
Revisiting My 2023 Predictions
See here for my original post.
The Boston Celtics win the NBA championship.
Got this one wrong, as the Celtics lost a tough 7 game series to Miami in the Eastern Conference finals.
S&P 500 returns over 10% for the full year.
This was the prediction that got the most pushback last January. 2022 was one of the index’s worst years on record, inflation was raging, and investor sentiment was dour. Turns out 10% was too low, as the S&P ended the year 24% higher!
The North Face overtakes Arc’teryx as the gorpcore brand of choice.
Admittedly, I had no idea how I’d measure such a subjective claim. While inexact, I figure Google Trends is probably the best proxy:
Van Cleef replaces Chrome Hearts as the most referenced brand in hip hop.
Another prediction that’s nearly impossible to quantify. Out of curiosity, I pulled another Google Trends chart, this time filtering on the Music & Audio category:
Both brands were hugely popular this year, in music and pop culture more generally. I heard numerous references to both and saw a notable amount of Chrome and Van Cleef (including fake jewelry lol) being worn out and about.
See the end of this post for my 2024 predictions.
A FEW THOUGHTS ON PUBLIC MARKETS
In 2022, it was nearly impossible to make money.
This year, it would have been difficult to lose money.
Since early November, the S&P 500 is up nine weeks in a row. The small-cap index, Russell 2k went from a 52-week low to a 52-week high in a record 33 days. The Nasdaq gained 43% this year, almost back to all-time highs after being down 33% in 2022.
Simply put, 2023 was a historically good year for stocks. Looking back at headlines from 2022, or even early 2023, that seemed impossible.
PRIVATE MARKETS
A prevalent theme in private markets over the past 18 months has been investors becoming more discerning due to the higher cost of capital. Raising money hasn’t been easy; many teams are battling limited runway.
I’m not sure 2024 will be any less challenging, as all signs point to more pain in startup land. We will likely see more recapitalizations and down-rounds. Startups with inefficient business models and a lack of investor support will fold or be sold for pennies on the dollar.
The best companies will be okay—though it may take years for them to grow back into their valuations.
Carta’s quarterly State of Private Markets report is an excellent resource for readers seeking more info.
2024 Predictions
S&P 500 up ~5%. 2023 was a great year for investors. Lots of themes and stocks paid off, which is exactly why I’m a bit more cautious. Nothing scares me more than when everything seems to be working.
At the same time, the Fed just announced the tightening cycle is over, and lower interest rates are coming, so animal spirits may run wild. 1H’24 could make 2021 look tame.
Big tech stocks were up bigly last year and could take a breather after such a huge run. Given the relative valuation dislocation, one area I think investors could generate some alpha is beaten-down small and mid cap software.
ADBE 0.00%↑ AAPL 0.00%↑ MSFT 0.00%↑ NVDA 0.00%↑ GOOG 0.00%↑ META 0.00%↑
Of the above, PayPal is a name I’m closely watching. PYPL 0.00%↑
The IPO market comes back and Stripe has a successful IPO. After a slow couple of years, IPO and M&A activity should pick up. Stripe, Databricks, and Shein are some notable $50+ billion companies in the mix.
SGA for MVP. OKC is one of the scariest young teams in the NBA, which pains me as a Sonics fan. Shai finished fifth in MVP voting last season. His stats are up across the board (2.8 steals per game!), and he has a solid shot to become the first Canadian player to win the award since Steve Nash.
I’ll revisit these next January.
Cheers to 2024 — wishing you joy, peace, and prosperity.