It’s a classic joke.

Chances are, you’ve already heard it.

It goes like this: economists have predicted nine of the last five recessions.

Cue the comedy-show laugh track.

Yes, it’s funny. And, yes, it’s true. Economists — despite all their research and data — appear to be no better in predicting the future than a groundhog.


An artist’s impression of Groundhog Day. According to tradition, if a groundhog climbs out from its burrow and sees its shadow, it may dart back in fear. If this happens, winter may go on for six more weeks. However, if the groundhog sees no shadow and shows no fear, then spring may arrive early. Source: Image generated by OpenAI’s DALL-E


For over 20 months now, economists have been warning that rising interest rates were dangerous. This trend would plunge the world into a dark and terrible abyss:

  • Their logic was this: we were experiencing the most aggressive hiking cycle since 1988.
  • Such monetary tightening would surely destroy jobs, erode consumer confidence, and wipe out company earnings.
  • In short: a train wreck was looming for the global economy. Guaranteed. 100%.

But…strangely enough…no abyss showed up in 2022:

  • Job growth remained robust. Consumer spending remained resilient. Company earnings remained strong.
  • The economists were undeterred. They stubbornly dug in. They doubled down on their claims.
  • A Bloomberg poll revealed that 70% of economists were convinced that 2023 would be the year of devastation.
  • Like the mythical Ozymandias, arrogant and cocksure, these economists seemed to declare: ‘Look on my works, ye Mighty, and despair.’

But…yet again…it was more of the same. No abyss showed up in 2023:

  • Job growth remained robust. Consumer spending remained resilient. Company earnings remained strong.
  • Many economists were left red-faced, their credibility in question.
  • In June 2023, The Wall Street Journal published an article with headline that mocked the prophets of doom: ‘Where’s the Recession We Were Promised?’ The subheading below said: ‘The economy and the jobs market turned out to be far less sensitive to interest rates than economists thought.’


Source: Image generated by OpenAI’s DALL-E


So now, in December 2023, we’re experiencing the strongest Santa Claus Rally in years:

  • Economists are starting to adjust their expectations. Some of them are conceding that a soft landing for the world may be possible after all.
  • The American economy, in particular, may slow down just enough to cool inflation, but without inflicting excessive pain. Rate cuts could be on the horizon for 2024. Perhaps we might get the Goldilocks equation — not too hot, not too cold, just right.
  • In any case, the market has already digested most of the fear. Priced that in. And the market now appears ready to power on ahead.
  • Today, as part of our Christmas special, we are taking a close look at three companies that have gained +101%+79%, and +29% this year…


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