Despite All We Have Been Given

Agent Smith says: MORE!

Are you a fan of the Matrix Trilogy? Do you remember the scene with Agent Smith taking a beatening from Neo (Keanu Reeves), loving it and waving his hand and smiling ferociously saying: “MORE”! Agent Smith would do well as a CTA trend follower pressing the down move in 2022 into the December Nasdaq-100 decline of 10% for the month. Equally, right now he would be adding to longs asking for MORE! No matter how much pleasure Agent Smith receives, he assumes the trend will continue until…he gets truly hurt.

Since we began the substack journey we have written about so-called potential compounders such as Meta, Uber, Microsoft, Amazon and others. When we wrote about Uber, it was a terrific risk reward on the march to $5 billion in EBITDA and the potential for a re-rating. Meta was both an AI beneficiary, cost cutting story and an EPS power based on reducing losses at Reality Labs. Amazon was a mathematical exercise in all aspects of their businesses were bottoming and inflecting in the months ahead. Bravo!? NO! All investors are to be judged from Friday’s 4:00 PM EST PNL moving forward. Sure, we should look to our volume of work (performance) over years not months, but we all stand with the same decision each 9:30AM EST on whether to buy, sell or hold and change our portfolio holdings. Many look at 2023 winners, both stocks and stock pickers, without regard for how they did in the 2022 bloodbaths.

That said, let’s review what the market hath given as we leave 2023.