The markets: 2023

Nearly 50 years ago I thought it would be a great idea to have a job wearing a three-piece suit, a “power tie,” and expensive shoes. And buying a new car every year. I was right.

But the critical “fun” part of analyzing and trading the asset and financial markets is the never-ending changes. Whether talking on an Inmarsat phone to a broker in London from the Majuro Yacht Club—now a part of dusty history—or sitting in a Wall Street office, every day is literally a new adventure.

Nothing is as fast-paced as the markets in 2023. Instant global communication is responsible for some of it. Then again, Isaac Newton lost £40 million of today’s money in two months back in 1720 when the South Sea Company “bubble” burst. Newton had bought earlier in the year and doubled his money. But when the stock price kept going higher, he bought back in at the high in July and was wiped out by September. Even a genius can be an “expert” when it concerned the markets.

However, if there was a turning point in history it might be on “Black Wednesday,” September 16, 1992, when George Soros broke the Bank of England and made over $1 billion.

What triggered the massive selling in the British pound is not important, and forget George Soros. What is important is that the government could not do anything to stop it and that virtually any person could take advantage of it. I even made a few bucks on the Soros trade watching the action from my office in Makati.

Five years later, “The 1997 Asian Financial Crisis.” You might read that “the causes of the debacle are many and disputed” and more nonsense from “economists” and “experts.” The Crisis officially started on July 2, with the collapse of the Thai baht. “Unofficially” it was a month earlier. Officially, the USD/PHP rate was 26.37 at the close on Friday, June 6 and officially 26.39 on Monday, June 9.

“Unofficially,” meaning if you needed US dollars since the banks seemed to be out of US dollars, the “black market” rate was 29.02, and this was on a day when the US dollar index dropped “unexpectedly” in Asia.

But again, nothing rivals the markets as now in 2023.

I hate to use bitcoin as an example because the crypto-nuts react as if I drew a cartoon of Muhammad or painted a naked Virgin Mary. But this is 2023 and to be expected.

CNBC January 3, 2023: “Bitcoin bull Tim Draper had one of the most optimistic calls of 2022, predicting the token would be worth $250,000 by the end of the year. In November, the billionaire venture capitalist said he’s extending the timeline for that prediction until mid-2023.”

CNBC January 3, 2023: “Veteran investor Mark Mobius said bitcoin would fall to $10,000 in 2022. That did not happen. However, Mobius told CNBC that he is sticking for his $10,000 price call in 2023.”

I am certainly glad we have it all figured out. But that is Bitcoin. What about something from the “real ” markets like equities?

Bloomberg January 9, 2023: “Morgan Stanley’s Michael Wilson said in a research note that the S&P 500 could fall about 22 percent below current levels.” “J.P. Morgan’s Dubravko Lakos-bujas thinks that the S&P 500 could rise around 9 percent by the end of this year.” “David Kostin, chief US equity strategist for Goldman Sachs Research says, “The S&P 500 Index is forecast to turn out flat returns and zero appreciation.”

Up, down, and sideways—take your pick. Maybe, though, the markets are no crazier than the world around us.

AP News January 7, 2023: “A journalists’ union in South Sudan asserted Friday that six staffers with the national broadcaster are detained in connection with airing video footage apparently showing the country’s president urinating on himself at an event during the national anthem.” W here are the “Freedom of the Press” people when you really need them?

Bloomberg January 9, 2023: “Morgan Stanley’s Michael Wilson said in a research note that the S&P 500 could fall about 22 percent below current levels.” “J.P. Morgan’s Dubravko Lakos-bujas thinks that the S&P 500 could rise around 9 percent by the end of this year.” “David Kostin, chief US equity strategist for Goldman Sachs Research says, “The S&P 500 Index is forecast to turn out flat returns and zero appreciation.”