The Julia La Roche Show
#129 Fundstrat's Tom Lee, Analyst Who Nailed The 2023 Stock Market Rally, Shares His 2024 Market Outlook
Episode guests
Podcast summary created with Snipd AI
Quick takeaways
- Successful forecast in 2023 was based on transitory inflation and the collapse of volatility, while many investors underestimated the importance of volatility.
- 2024 outlook is positive due to factors such as the Fed's ability to cut rates, an earnings recovery cycle, and small caps outperforming in similar circumstances.
Deep dives
2023 Market Outlook and Nailing the Target
Tom Lee successfully predicted the S&P to reach 4750 in 2023, and it hit that target. He attributes their accurate forecast to factors such as transitory inflation and the collapse of volatility. Many investors underestimated the importance of volatility and the Fed's ability to control inflation. People got it wrong because they focused on a singular analogy from the 70s and 80s, rather than understanding the dynamics of the current situation. Psychology and mass psychology play a significant role in the market, as emotions are easily expressed through actions like trading. Institutional and retail investors are reading from the same playbook, resulting in similar positioning and expected returns. Small caps are particularly appealing due to their historically low price-to-book ratios.
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