Ignominy for a cause

I feel as though I demonstrated how bad I am with yearly predictions last year. Anyone who played my vibes vastly underperformed. And by now I think everyone who reads this knows I think looking at the markets over such a short time span is for suckers.

Not to brag, but I consider my inability to see what next week will bring as a competitive strength. It helps me to focus on the long term, and on getting the desired results over time.

I’m just not very good at predicting the future or predicting how other people will react to what happens up ahead. I’d prefer to just find companies good enough to outlast the drama of the day and grow with them over time.

That said, I am a sucker for a good humiliation. And I especially enjoy being humiliated by friends. So, against my better judgement, I went ahead and joined Investing Unscripted’s annual portfolio contest. I’d encourage you all to immediately go listen to the entire podcast describing the contest and the All-Star crew who are a part of it.

I already hate my picks. And I’ll confess this isn’t even the list that I meant to submit. I was determined to get Easterly Government Properties in but then forgot about it. So (NOT INVESTING ADVICE) count on Easterly to go to the moon this year.

You can find everyone’s picks by going here. Jason and Jeff really outdid themselves bringing in so much talent. I’m in real trouble. That being said, my portfolio…

A lot of thoughts:

• This is not a stock recommendation game. I do own 8 of these 10, but despite their inclusion I wouldn’t add to many right now. One of the other two I would never buy even with someone else’s money. When I buy stocks I am hoping to do no babysitting, and very little monitoring. Some of these stocks require a fair amount of monitoring.

• I realize now I very much overthought this. The goal is to outdo the S&P 500, and outdo my colleagues. I focused more on the index. So, these are stocks that I either believe could be due for a bounce, or I expect to do well on a total return basis.

• You need to think in terms of home runs to win this, and I am not good at home runs. Thinking back, I should have just found a lot of volatile pump and dump candidates and hope one of them becomes the next big thing on Reddit. But I am very bad at figuring those things out or predicting the move.

So, what was I thinking?

My general feel for this year is it will be blah in terms of returns. I think the excellent results in 2023 to some extent pulled forward what is going on in the economy and will likely temper 2024 results. I don’t expect a terrible selloff. The economy still seems to be in decent shape. But after a pretty dramatic last few years I think this could be a yawner. I think rates will steady and key areas of the economy like housing to normalize.

With that in mind, and being more focused on the S&P 500 than the other pickers (again, my biggest error), I thought I had a not-impossible target to beat. Some established companies due for a rebound, coming off of a few years of either self-inflicted or macro-related troubles. A couple of others riding what I see as multi-year waves. And assuming the S&P 500 is pretty flatish, strong income plays could be all it takes to come out ahead on a total return basis. So, I went in that direction.

CoreCard is my biggest wildcard, and a pretty huge gamble that could either give me a chance or sink me for good. CoreCard could very well be a zero 365 days from now.

FWIW, it looks like Jim Gillies went in with a somewhat similar mindset and did a much better job picking stocks. (How could I have not included my beloved AerCap?) If I was to put money on such things (and I don’t), he’s my pick to win the contest.

I do have one firm prediction for the markets for 2024. The S&P 500 will not finish the year at 4,769.83. I feel pretty strongly about this. I’ll concede a completely flat year is not impossible, but I don’t expect 2024 to end exactly where 2023 did. So, consider my range for 2024 to be anything either below or above 4,769.83. Assume I will be bragging about how I nailed the S&P for the year twelve months from now.

Finally, if you are so inclined, allow my humiliation to generate a return. The stock picking contest is for charity, and I am pretty sure my charity will not be enjoying any of the winnings. If you would like to donate anyway so that my humiliation and suffering is not for nothing, you can do so here. Please include “Lou’s a nerd” in the donation form because, as Jason notes, it really does make the advancement director laugh.

Here’s to better things in 2024. And a mindset that looks far beyond the reach of a 12-month calendar.

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