EscapeVelocity's Net Worth for October 2022

Assets	Value	Change ($)	Change (%)
Stocks & Bonds	$19,942,723	($1,469,861)	(6.86%)
Retirement	$1,157,771	($135,193)	(10.46%)
Home	$2,850,000	-	-
Other Real Estate	$505,852	-	-
Cars	$70,000	($10,000)	(12.50%)
Personal Property	$0	-	-
Business	$200,000	($200,000)	(50.00%)
Sail Boat	$405,000	-	-
Power Boat	$150,000	-	-
Total Assets	$25,281,346	($1,815,054)	(6.70%)

Debts	Value	Change ($)	Change (%)
Home Mortgage(s)	$0	-	-
Other Mortgage(s)	$0	-	-
Student Loans	$0	-	-
Credit Cards	$0	-	-
Car Loans	$0	-	-
Other Debts	$0	-	-
Total Debts	$0	-	-
Net Worth	$25,281,346	($1,815,054)	(6.70%)
^*All values shown in USD ($)

Notes:
Things continued to deteriorate this month on top of the pain already endured this year. Looking at the formerly high-flying “FAANGs"—they’ve all been crushed: Facebook - down 62% YTD Amazon - down 38% YTD Apple - down 24% YTD Netflix - down 60% YTD Google - down 34% YTD Indeed, the most reliable stalwart of the group, Apple, is down 8% in the last few days and appears to be giving up the ghost. The overall market is not much better, of course, with the S&P 500 down 26% from it’s high (but still has a PE of 18.12), and 10% of that damage (about 40% of this year’s loss) came in the last month alone. Is this the bottom? I don’t think so. So where is the bottom? Earlier this month the likes of my two favorites “Arts” (Art Cashin and Art Hogan) said the “lows are in for 2022." Not surprisingly, Jim Cramer, whom I don’t respect but who is a good barometer of what others seem to think, said the same thing. They were all wrong. [Note, Cramer’s opinions change as quickly as a teenager’s mood; he’s singing a new tune today.] Others were less sanguine. Peter Bookcvar, Dan Niles, and Jeffrey Gundlach all said we'll see the S&P hit 3,000 (which, Bookcvar says, is a PE of 15 at current expectations). Niles thinks that happens in 2023 and Gundalch thinks it happens by mid-October, 2022. If that occurred, it would mean the S&P would be down 38% off its high, which is on par for a typical bear market. I am far less prescient than those guys, but I also think anywhere in the range of 3,000 to 3,400 is a likely bottom for this cycle; provided, however, there's no “black swan” type of event, such as Russia launching tactical nukes or surprise Fed pivot. I also agree with the CEO of FedEx who expects a worldwide recession in 2023. But, the thing to remember with the stock market is that it is forward-looking and labels like “recession” are, at best, contemporaneous or backward-looking labels. So, if a recession next year is likely (as I believe) I’d expect to see that show up in stock market price compression at least 6 months in advance … What does all that mean? I think it means we see the market bottom soon (within the next 6 months), and we’re not there yet.

Notes:

Things continued to deteriorate this month on top of the pain already endured this year.

Looking at the formerly high-flying “FAANGs"—they’ve all been crushed:

Facebook - down 62% YTD
Amazon - down 38% YTD
Apple - down 24% YTD
Netflix - down 60% YTD
Google - down 34% YTD

Indeed, the most reliable stalwart of the group, Apple, is down 8% in the last few days and appears to be giving up the ghost.

The overall market is not much better, of course, with the S&P 500 down 26% from it’s high (but still has a PE of 18.12), and 10% of that damage (about 40% of this year’s loss) came in the last month alone.

Is this the bottom? I don’t think so. So where is the bottom?

Earlier this month the likes of my two favorites “Arts” (Art Cashin and Art Hogan) said the “lows are in for 2022." Not surprisingly, Jim Cramer, whom I don’t respect but who is a good barometer of what others seem to think, said the same thing.

They were all wrong. [Note, Cramer’s opinions change as quickly as a teenager’s mood; he’s singing a new tune today.]

Others were less sanguine.

Peter Bookcvar, Dan Niles, and Jeffrey Gundlach all said we'll see the S&P hit 3,000 (which, Bookcvar says, is a PE of 15 at current expectations). Niles thinks that happens in 2023 and Gundalch thinks it happens by mid-October, 2022. If that occurred, it would mean the S&P would be down 38% off its high, which is on par for a typical bear market.

I am far less prescient than those guys, but I also think anywhere in the range of 3,000 to 3,400 is a likely bottom for this cycle; provided, however, there's no “black swan” type of event, such as Russia launching tactical nukes or surprise Fed pivot.

I also agree with the CEO of FedEx who expects a worldwide recession in 2023. But, the thing to remember with the stock market is that it is forward-looking and labels like “recession” are, at best, contemporaneous or backward-looking labels. So, if a recession next year is likely (as I believe) I’d expect to see that show up in stock market price compression at least 6 months in advance …

What does all that mean? I think it means we see the market bottom soon (within the next 6 months), and we’re not there yet.

Comments

12/1/2023 10:37:22 AM EscapeVelocity
Funny how spectacularly wrong I was in October ‘22 and how nothing that I thought, guided by “experts,” came to pass. This is another reminder that market timing and spending precious time listening to experts is, at least for me, foolish. I’ve managed to stop the former (long ago) but still waste time on the latter. Maybe I’ll eventually learn that too …
12/1/2023 12:08:01 PM mbasherp
I love your humility here as you hold yourself accountable to past predictions! The world needs more of that. I agree with you and I'll add that it doesn't seem like you need to care one bit based on that balance sheet ;-)
12/1/2023 1:14:11 PM EscapeVelocity
Thank you -- I will say I remain skeptical and the ultimate "tell" of whether we're done with the bear is if we make decisive new highs; otherwise what we've seen is an extraordinary bear market rally. So we still have 5% to go on the S&P before we pop the champagne corks and, to be fair, most of the S&P is pretty flat to date. Not that this matters to me personally, but it's fun to watch.
12/1/2023 1:15:25 PM EscapeVelocity
I'm referring to this, of course. https://www.nasdaq.com/articles/you-might-be-shocked-to-learn-where-the-sp-500-would-be-in-2023-without-the-magnificent
12/3/2023 9:49:51 AM cloudcaster
My gut feel is that Americans are still in a post-lockdown YOLO spending frenzy. But as you say, gut feelings and the course of the markets are mutually exclusive phenomena, to the detriment of my portfolio. I've been listening to WAY too much Jeremy Grantham over the last two years.
12/4/2023 11:10:52 PM azphx1972
Relevant video from Ben Felix on the cost of investment hubris: https://www.youtube.com/watch?v=MJaqZRd1bTc