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PremiumPoints 4Q-2023: Equities Make New All-Time Highs

Posted: February 9, 2024 | by: Thomas F. McKeon, CFA

In this issue:

From the CIO's Desk, Review & Outlook 4Q-2023, Bitcoin Never!, Time Weighted Return | What Is It? Why Is It?, The Plunderers Are Coming For Your Money, The Magnificent Seven, Cathie Wood Has A Really Good PR Firm, Morningstar's Worst 10 Year Funds, Andrea & Matteo Bocelli sing "Fall On Me", Closing Thoughts


From the CIO’s Desk

The markets rallied sharply across the board in 4Q-2023 and both the S&P 500 and Dow Jones Industrial Average made new all-time highs in mid- January 2024. The economy continues to perform with inflation under control, unemployment low and GDP growth a respectable 3.0% at the most recent report. As one Nobel Prize winning economist put it recently: “Better Than Goldilocks.” The markets have taken notice.



Review & Outlook 4Q-2023

The equity, bond and real estate markets staged a strong 4Q-2023 rally as investors began to believe that the Federal Reserve was through raising interest rates and may even begin to lower rates sometime in 2024.


Bitcoin Never!

Shamefully, much of Wall Street is scrambling to bring funds and ETFs of cryptocurrency to market. It seems that after a full court lobbying press, the regulators have relented (which they always seem to do when there is money to be made) and allowed crypto’s to be packaged into products for investors.


Time Weighted Return (TWR) | What Is It, Why Is It?

Time Weighted Return is the Global Investment Performance Standards (GIPS) required methodology for performance calculation. The objective is to give investors the truest, most accurate representation of investment performance possible.


The Plunderers Are Coming For Your Money

We have written previously about how the private equity plunderers are moving down market to regular investors and investment advisors like us. We have long been aware of how self-serving, destructive and extractive the private equity “business” is. We put the word business in scare quotes purposely. The PE model is not the standard win-win proposition of an actual business. It is a decidedly win-lose proposition and we are at a loss to understand why they continue to thrive.


The Magnificent Seven

Much has been made lately of the so-called “Magnificent Seven”, the 7 largest companies in the S&P 500 ranked by market capitalization. The S&P 500 index is a capitalization weighted index. Larger companies (market capitalization) get larger weights in the composition of the index.


Cathie Wood Must Have a Really Good PR Firm Working For Her

Not a day goes by that the home page (Yahoo Finance) on my browser that the feed does not feature some update about Cathie Wood and her activities as portfolio manager of the Ark Innovation Find (ARKK). It is the only explanation for why she gets any press, for as independent industry observer just revealed, her funds have been some of the largest destroyers of investor wealth.


Fall On Me

Andrea Bocelli and his son Matteo performing “Fall On Me.” Came across this song early in the Covid lockdown of 2020 and it seemed a fitting song for the terribly unsettling time that was, with so much uncertainty about our modern lives, health, livelihoods and a dangerous new pathogen loose in the world. The song is both haunting and heartwarming. Two remarkable voices.


Closing Thoughts

I began my time in the capital markets in September of 1980. Then Federal Reserve chairman Paul Volcker was aggressively trying to tame runaway inflation by raising interest rates. The Prime Rate peaked at 21.5% on December 19th 1980. It is a terrible cost of capital for borrowers and entrepreneurs.

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