2024: The Year of the Bull
You've heard the adage before: "Sell in May, go away."
And while that's good advice, be sure you don't go overboard...
Because if you do, you'll miss getting positioned for one of the greatest bull runs in history.
For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.
2024: The Year of the Bull
Mark your calendars. 2024 will go down as the "Year of the Bull."
It seems hard to imagine right now. After all, the economy is slowing, and earnings season has been lackluster.
But as I'll explain, what's happening isn't a bad thing. In fact, I believe this is all a precursor to an historic buying opportunity...
One you don't want to miss out on.
Your Concerns Aren't Unfounded
Over the past few weeks, I've advised Moneyball readers to get a little defensive. And for the record, I'm standing by that advice.
The economy is sluggish, manufacturing is struggling, and the job market is softening. Meanwhile, the media is doing what it does best – stoking the fire, talking about a recession on the horizon.
Simply put, I don't blame you for being a little nervous right now. But hear me out...
A Little Context Goes a Long Way
I'm convinced that all this recent turmoil is setting the stage for a fantastic bull run in 2024. How can I be so sure? One word: context.
During COVID, a lot of companies – and Big Tech in particular – scaled rapidly. People were spending more time online and companies ranging from social media platforms to conferencing tools achieved historic success.
But then, things returned to normal... And that included the growth these companies were experiencing. The trouble was, a lot of them had mistakenly over-hired or over-ordered inventory, thinking that this level of growth would be sustainable forever. Let me show you something:
Here's annual revenue growth for Meta (META). During COVID, growth skyrocketed. But starting last year, growth started slowing down.
This is why you've seen widespread layoffs throughout the tech industry recently. Companies like Meta, Amazon (AMZN), and Microsoft (MSFT) all laid off thousands of workers. But with context, we see that this was simply companies getting back to normal themselves. And that's important. Let me explain...
Getting Lean and Mean
Companies laying off workers often sends the wrong message and creates a nasty ripple effect. Business slows, employees get laid off, and a picture is painted that the economy is in rough shape.
Truthfully, it's why we can expect to see the market continue to struggle in May. And it's why it's still a good idea to be a little defensive.
But don't panic. Because all this trimming is simply companies getting lean and mean. It's all part of a healthy process...
And sure enough, next year, we're going to experience a roaring bull market as a result...
Meaning we need to get ready today. Here's how...
Long- and Short-Term Plans
This summer, start looking for the economy to bounce back.
The chart above shows earnings from S&P 500 companies over the past decade or so. As you can see, earnings are forecasted to jump 12% in 2024.
The last time we saw earnings jump like that in a non-COVID year, the S&P 500 rose 24%.
So, we've got our outlook for the long term. In the meantime...
As you remain defensive, look for opportunities to bet against companies that will spend this year returning to normal, just like Big Tech.
If you're a Moneyball "Pro" subscriber, I'll reveal one such company that's my favorite way to put big profits in your pocket, even as you wait for things to turn around.
We're in it to win it. Zatlin out.
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