Wall Street still has consensus estimates of earnings growth of about 5%, which seems quite unrealistic if we're expecting a recession. We would expect actually that that number would be more like down 5 to 15%. So say anywhere between $190 and $205 per share, that would be more our expectation. And then just circling back into what that means for prices, if that correction is realized, would that suggest about a 20% correction from current prices in the market? Yeah, 20% is pretty much dead on right now.
Rebecca Hotsko chats with Chance Finucane, who is a partner, and Chief Investment Officer at Oxbow Advisors. They discuss Chance’s current outlook for the market and economy for 2023, why he expects a recession sometime in 2023, what’s driving investors’ complacency in the market, and much more!
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro
02:41 - Why Chance expects a recession sometime in 2023 and the stock market to decline by about 20%.
03:55 - What’s driving investors’ complacency in the market, despite being so pessimistic.
07:43 - What a Fed Pivot means for the stock market and the economy.
10:54 - Which leading indicators Chance is relying on to help inform his investment decisions.
11:51 - What would be the catalyst to cause investors to start selling.
12:52 - Why Chance thinks the defensive sectors are the most overvalued parts of the market still.
24:34 - The sectors that typically outperform coming out of a recession.
24:34 - How much the stock market would drop if earnings downgrade as expected.
26:21 - What Oxbow’s investment process looks like for their high growth equity strategy.
27:58 - Why he thinks earnings estimates are still too high for 2023.
30:20 - Why Google is one of their biggest holdings for their equity strategy and looks attractive at today’s price.
31:32 - Which tech stocks he thinks are undervalued and overvalued at today’s prices.
42:10 - Why Chance is still bullish on energy long term despite recently reducing some exposure to positions.
48:27 - Why he thinks this next decade could be more like the 1970s with waves of inflation.
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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