Stocks surge to new highs for 2023: right again

Stock market makes new highs, DJIA crosses 37,000:

Looks like I was right yet again to buy the dips and to hold. For 2023, I rolled over my 2022 market and economic predictions, meaning I changed nothing. And sure enough, 2023 has been one of the biggest years ever.

Here is what I wrote:

-I am going to rollover my 2022 economics forecasts, meaning that my 2023 forecasts are unchanged from 2022. Inflation will subside, but this is not saying much. The stock market will likely go up if history is any guide. The last time the S&P 500 had two consecutive double-digit negative years was 2000-2002, so 22 years ago.

Inflation has subsided too: Slowing US inflation boosts hopes Fed done with rate hikes. 2023, in short, could not have gone better.

After all the pessimism in 2022 about inflation, rate hikes, weakness, etc. it’s nuts how fast the market recovered, and now making new highs as if all that old stuff last year a distant memory and irrelevant. It goes to show how it pays to ‘hodl’. Large companies more than ever are money-printing machines, whether in tech, retail, food, healthcare, etc. And that money goes to shareholders in the form of dividends, retained earnings, or buybacks.

To go off on a tangent, people complain about credentialism being an impediment to growth, but it evidently has not hurt big companies. Aggressively screening for degrees seems to be worth it. Given that labor is one of the biggest expenses for any business–hence why layoffs are the favored way for companies to quickly cut costs–if they could hire high school grads for those same roles, they surely would instead of having to pay the college wage premium. Same for ‘DEI’. It comes down, in the end, to profits, and large US companies sure seem to excel at making money, no matter what.

An argument can be made that such companies are profitable in spite of those things, but I somewhat disagree. DEI, including token hires, are tiny relative to overall budgets and the workforce, but the positive PR makes it worthwhile. Given that Republicans only talk tough on wokeness but do not care or have no power in terms of policy–and dems obviously respond favorably–there is only upside (unless you totally screw up, like the Bud Light fiasco). Companies run A/B tests to optimize sales: Perhaps that despite only being 13% of the population, blacks having 70%+ representation in commercials/ads boosts sales, compared to that what is actually representative of the population.

We like to think we know what is best, but these people are experts at making money, and although they sometimes screw up–like with Target’s LGBT ads or Bud Light–they succeed more often than not, even when their choices or actions seem irrational to ‘us’ outsiders.