Market Mastery Unveiled: Sam Stovall's Bold Predictions for 2024 and Winning Sectors

[00:00:00] (music)

[00:00:04] Flatline, that's what the S&P 500 has been so far this year,

[00:00:08] following a Rory bull market, which saw 24% gains in the S&P 500.

[00:00:14] Yet, what do we expect in this year? Well, a lot of people are seeing right cuts,

[00:00:18] seeing bullish news, but it hasn't happened yet. Our guest through the day on buy hold sell was

[00:00:23] right, wired to wire last year, and you're going to want to hear when he has to say what's in store

[00:00:28] for 2024. Welcome everyone to buy hold sell. I am your trader Todd Schoenberger,

[00:00:33] and I am joined by my friend and co-host Tobin Smith out in sunny and very cold,

[00:00:39] Scottsdale, Arizona, of course, not cold. I always recommend you pay the heating bill.

[00:00:43] I think we miss one. I don't know. He just pronounced it for two days. He's out there with the ice

[00:00:48] scraper on his Rolls Royce, but ladies and gentlemen, today we have a very special guest who is coming

[00:00:53] back to buy hold sell. Sam Stovall from CFRA Research is joining us. Sam, welcome to the program.

[00:01:00] Hey, Todd, good to talk to you again. Ladies, Sammy Stovall, Todd,

[00:01:04] singing Sammy Stovall. He's not holding back here. And he has been spot on. I mean, last year,

[00:01:09] he was wired to wire. We had him on the first week of January, and we heard it all along,

[00:01:15] and he called it right. So you're one of a very few guests that we've had on

[00:01:20] the show, Sam. So excellent job. So with those of you at home who don't have video,

[00:01:26] I'm bowing just Mr. Stovall. He is bowing. We encourage everybody to watch the TV show for sure.

[00:01:33] But Sam, what do you think for this year for 2024? We haven't seen it yet. We're only one week in,

[00:01:40] but what do you think we're going to have on Wall Street for this year?

[00:01:43] Well, Todd, basically what I have found is that good years tend to follow great years.

[00:01:49] I should have started out with a riddle saying, what do you call, what's the difference between

[00:01:54] an all weather radial tire and a 20% total return? One's a good year. The other's a great year. And

[00:02:02] history basically says that we tend to see an improvement in the average return of 300 basis

[00:02:08] points, as well as a 10 percentage point increase in the frequency of a gain for the market

[00:02:15] whenever the prior year was up by 20% or more. So that along with the presidential election cycle

[00:02:23] and the second year of a bull market leads me to believe that we are going to have a double

[00:02:28] digit year. Sam, so the argument I posed to almost everybody he says is, yeah, yeah, yeah, history,

[00:02:34] history, history, history. We have a war in Europe. We came out of a pandemic. The Middle East is

[00:02:40] melting down. We have de-globalization. We have a dysfunctional Congress. So maybe that's positive

[00:02:46] for the market. And also, we have an economy that is 78% services and all those other historical

[00:02:55] moments, 20s, 30s, 50s, 60s, 80s were 40% industrial. How can they be the same? I understand human

[00:03:02] behavior, fear and fear are haven't changed. But why should this bleed through the way it has

[00:03:08] historically is what I'm trying to say or ask? Well, a good question, because I think a lot of

[00:03:14] people ask that, you know, the world today is not like it was 20, 40, 60 years ago. So why do you

[00:03:21] look to history as a guide? First off, history is a guide. It's never gospel. Mark Twain said that

[00:03:28] it might not repeat, but it frequently rhymes. I like to add that, yeah, like the singer of the

[00:03:33] National Anthem, sometimes it forgets the words. So what you have to do then is overlay this history

[00:03:40] with economic protections, earnings forecasts, even technicals. I'm a big believer that fundamentals

[00:03:47] tell you what, but technicals tell you when and how far. Yeah. Well, you know, we have this, we have

[00:03:54] this like reverse Goldilocks effect down. You know, I also don't understand how can somebody be looking

[00:04:00] and someone is straight in the eye and say, we're going to have five or six Fed rate cuts. And we're

[00:04:07] also not going to have a recession, because going to your historical point, literally every time

[00:04:13] that we've had three or more cuts by the Fed, it was because of our recession. So solve that little

[00:04:18] for me, Mr. Wheeler. It'll be that Batman. Well, first off, let me finish the, the other thought

[00:04:25] about why history still works is because there's one component that has remained

[00:04:30] constant through history. And that is human reaction. Yeah. I believe that there is only one

[00:04:36] emotion in investing and that is fear, fear of missing out on the way up and fear of losing money

[00:04:43] on the way down. So that's what we got last year was the FOMO trade. I think that the reason that

[00:04:50] we ended up in the red early this year is because people delayed when they were going to take capital

[00:04:56] gains so that they could defer taxes for 2025. So I think we have to go in a lot longer into this

[00:05:04] year to see whether things are going to be dramatically different. Also, we typically climb

[00:05:10] a wall of worry. And the market tends to look at that, evaluate it, make a decision very, very

[00:05:17] quickly. And I think that would happen this time as well. So actually, I forgot what your overall

[00:05:22] question was. Well, I was just, I mean, it was first off, why should, you know, the past history

[00:05:29] applies this time, I think you answered that. The macroeconomics, the other question was, how about

[00:05:36] interest rates, right? Yeah. In other words, we can't, how do we have five interest rates that we

[00:05:40] don't have a recession? I mean, five interest rates, that has never happened for, I think, a good reason.

[00:05:45] And I would agree. And I don't think we're going to do that. I actually,

[00:05:48] I think that we are going to see the Fed start their REIT cut program later that it'll probably happen in May and sometime in the second quarter, not in the first quarter. And I think we end up with basically tiptoeing through the tulips by cutting 25 basis points in each of the final three quarters of the year. So whether that ends up signaling a mild recession or a slowdown in economic growth, which is what we are projecting.

[00:06:18] 1.9% Q4 over Q4 for this year versus two and a half for last year. So I think essentially the economy will be slowing, but I don't see us going into recession.

[00:06:30] But to slow that quickly, though, I mean, what you're suggesting is that only in what four or five months, you're going to have enough data over the next four months to suggest or weren't an interest rate cut.

[00:06:43] I mean, what is it right now? Because with the jobs report that we had and we continue to see,

[00:06:48] we have a very healthy economy, it seems. What's going to make that pivot? So suddenly, I just don't

[00:06:55] see it. And with that, you would think interest rate cuts wouldn't occur until well into the second half

[00:07:00] of the year. I think one reason is because we continue to see a downward step, downstep of inflation that

[00:07:09] next week we're going to be getting the CPI or getting it pretty soon. And I think it's going

[00:07:14] to come in at 3.8% rather than the most recent number at about 4%. That's core year on year.

[00:07:22] And I think we're going to continue to see the PCE, the more important of the three

[00:07:26] indicators also show a continued downward trend. The Fed, I don't think wants to keep rates elevated for too long because then they could end up

[00:07:36] choking off any kind of a soft landing. But at the same time, you're absolutely right.

[00:07:41] If we end up having to have the Fed cut dramatically over an extended period of time,

[00:07:47] then that means that something really bad is around the corner.

[00:07:50] Yeah, I also, I'm definitely of the school these days that when you have an economy where

[00:07:57] basically 60% of people live paycheck to paycheck, getting inflation down is a very important thing to the Fed.

[00:08:03] Because that extra 10 cents here, an extra 20 and a dollar, so and so forth,

[00:08:09] if you don't have very much or any discretionary income, that's the one, they worried that more

[00:08:14] about that more I think than people because they never say it out loud.

[00:08:17] And then the other thing is what happened to the Fed, what happened to the lag effects?

[00:08:23] Well, exactly. With the lag effects, I think that that's why the Fed did decide to stop raising interest rates because they didn't want to be

[00:08:32] knowing in a sense they're aiming at a target that's on the other side of the horizon.

[00:08:36] The same with how when they time the actual cutting of rates to begin because again,

[00:08:43] they want to make sure that they are landing successfully on the flat top.

[00:08:49] And so I think it's a very fine line that they're going to be walking.

[00:08:55] So Sam, in history, has the Federal Reserve, has the FOMC ever done something where they were proactive rather than reactive?

[00:09:03] In other words, well, in other words, I'll clarify that. Have they ever gone out of their way to actually start cutting rates sooner with the

[00:09:12] expectation that they didn't cut soon enough?

[00:09:14] I think most cynics would tell you that the Fed is always behind the curve.

[00:09:18] They raise rates later than they should. They cut rates later than they should.

[00:09:24] There have been two, if not three times, however, in which the Fed raised rates

[00:09:29] once and then realized, oops, maybe we shouldn't have done that.

[00:09:33] So from that perspective, they were pretty quick in deciding that the action that they took was incorrect and they swiftly reversed course.

[00:09:43] So there have been times that the Fed, because of the response by the market, decided to make changes.

[00:09:50] And Sam, you know, I ever core came out today, market down 17%. Of course, our dear friend, Mr. Rosenberg is now looking for a 22% bear market.

[00:10:00] I'm sort of shocked a little bit in that if you've been wrong five or six or let's say 10 or 15 years in a row, I guess it's just I'm going to be right once.

[00:10:10] Hey, the jet speed, the Patriots.

[00:10:13] I'm not talking about anomalies. I'm talking about patterns of recognition, right? Well, he's making his call based on the data that he sees, etc.

[00:10:23] I basically make the calls based on the history that I have observed, as well as the technical analysis that I've been looking at.

[00:10:31] I mean, I'm looking at a broadening marketplace. Now we're looking at indicators, whether it's the percentage of sub industries that are above their 50 day, 200 day,

[00:10:43] or both of those indicators. In two out of the three, we're at a widening experience that is below the overbought level in the 50 day area we are at an overbought reading.

[00:10:57] But I would tend to think that that would simply be a correction in time or a pretty mild digestion of those recent gains.

[00:11:06] But I still feel that volatility will probably be higher in 2024 than it was in the final two months of 2023.

[00:11:15] But of the mindset that we would have to have more of an anomaly, like the Giants beating the Eagles to see 2024 be a sharply negative year.

[00:11:28] But when you say, when you say volatility for people at home and don't really understand that term, because it's used for like five different reasons.

[00:11:36] Well, you're talking about vaults at a time.

[00:11:38] Is Price Volatility That You Get This Sawtooth? But Sawtooth, What The Saw Is Aiming Up? Well, what I all I know is that when you have increased volatility, it causes people to allow their emotions to become their portfolios' worst enemy. So, one of the presentations that I like to give is called Using Stock Market History as Virtual Valium, or by understanding stock market history, it actually can help calm your nerves. Knowing that the

[00:12:07] the number percentage of trading days where the market was up or down by 1% or more during bull markets

[00:12:14] averaged only 15%, but close to 45% during bear markets gives you a good idea. Of course, bear markets

[00:12:24] make you nervous because the volatility is substantially higher, three times higher than where it normally is.

[00:12:31] What do you think of what happened yesterday, last couple of days? To your point, people got

[00:12:37] over the finish line. Now I could take profits in Nvidia or SMCI or whatever and defer those

[00:12:42] profits, but that only lasted two days. And then, I mean, we have an AI fixed and shovels portfolio.

[00:12:49] Every one of these ones was up 5.5%, 6% in the last two days. It felt to me like

[00:12:56] some people took the profits, but this was truly the by the dip bell ringer. Was I wrong hallucinating

[00:13:02] or what? No, I think you were right, but then again, we were down today. So, I would tend to say

[00:13:09] that right now we're going through a digestive phase that probably will be more in time than it

[00:13:16] will be in price. And so, I think, in a sense, the markets are churning because people are rotating

[00:13:24] out. They are looking at the sectors that did well last year, wondering whether they will

[00:13:28] continue to do well this year, trading down into maybe second tier companies rather than the

[00:13:35] first tier companies. So, I would tend to say also that it's causing investors to question the

[00:13:42] indicators of the Stock Traders Almanac, which I find very helpful, with the Santa Claus rally

[00:13:49] not materializing with the first five days of January being down, that increases the

[00:13:56] concern and the skepticism that investors have. God, get that, get hers on the line.

[00:14:01] Get hers on the line. Well, I got to tell you, Toby, that's a great segue because tomorrow,

[00:14:05] we actually have Jeffrey Hirsch from the Stock Traders Almanac. We'll be joining this as our

[00:14:10] first show, getting back to back with the superstars. I mean, that's how it works here,

[00:14:16] by an old sell. So, we're going to close it out on that block, guys, because coming up after the

[00:14:20] break, we're going to start talking Turkey. Sam is going to give us some numbers. He talked about

[00:14:24] a double-digit increase in the markets this year. We want to know levels and we want to know where

[00:14:29] we should focus on. And we want to know sectors. I won't disappoint. Toby loves to sign sectors

[00:14:36] his middle name. So, listen, coming back, we have Sam Stovall, Chief Investment Strategist from

[00:14:41] CFRA research and joining by the old sell. And we'll be back with you right after the break.

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[00:17:25] Hi, it's Nicole Midendorf, CEO of CrossFit for Wealth Financial. You are listening to Tobin and Todd on Buy Hold Sell. Welcome back to Buy Hold Sell. We saw the S&P 500 this year.

[00:17:55] It's actually just dipped. I think we're down about 28 basis points right now. Flatline overall. However, there's a number of Wall Street professionals that are actually seeing big returns this year. One of them is with us today. Sam Stowball, he is the Chief Investment Strategist at CFRA Research. He's coming to us from Allentown, Pennsylvania. Sam, when we left it off in the last block, we teased the levels of the S&P 500 for 2024. I know you actually came out a few weeks prior to the end of the year for your...

[00:18:25] Sam Stowball came out. Now we have news, Todd. I got to ask you, Sam, what levels do you have for the S&P 500 right now for 2024?

[00:18:35] Right now, it's $49.40, which when established in the beginning of December was about a 10% price appreciation equivalent to the average following great years.

[00:18:48] But obviously, with a very strong return that we got in December, I'm looking sort of bearish at this point, which I am not.

[00:18:57] One thing I am saying, however, is that large round numbers tend to act like rusty doors, requiring several attempts before they finally swing open.

[00:19:08] I think that, yes, we will be setting a new high, but then maybe we do end up seeing a digestion of gains after setting a new high, and that 5,000 level, I think, is going to be very challenging.

[00:19:21] So my targets are rolling 12-month targets, so I reserve the right to alter that target as fundamentals and technicals change.

[00:19:32] What would tell that he's saying he reserves the right to roll one if he's wrong? I'm telling you with it.

[00:19:38] But Sam, we had you on the show, I guess, it was a while back, and you did say that you do adjust targets as they move forward as far as looking at economic data or even earnings data with that.

[00:19:52] I know we had Dr. Ed Yardeno on the show. He is very bullish. He has a 5,400 price target on the S&P this year.

[00:19:58] He actually said 6,025. Huge numbers. I know this isn't the price is right, but I did ask him this question.

[00:20:05] I'm going to ask you, was when you take into account that forecast, are you also considering that it isn't an election year?

[00:20:14] Absolutely, and that's one of the reasons why I feel that I should be more optimistic, because going back to World War II, we have seen every first-term administration that's up for re-election.

[00:20:27] Experience an advance in the market with the average total return being 15 and a half percent add to that.

[00:20:35] We're in the second year of a bull market. Average gain is 12 and a half percent.

[00:20:40] Only two times since World War II did a bull market, not completed second year, and that was in 1948 and right after the pandemic in 2022.

[00:20:51] I would tend to say that with an 86 percent success rate that chances are, we are likely to see a pretty good return based on following a great year, a second year of a bull market, and first-term administration up for re-election.

[00:21:08] It doesn't mean that the first-term president is going to get re-elected. It just means in that election year, the market tends to do very well.

[00:21:16] Did it make any difference in the years where there was a split Congress in the second term?

[00:21:23] Interesting point about that, because what I have done is, I guess, proving I have no social life, I went back to World War II and looked at all of those different scenarios.

[00:21:33] There are three of them, a united government in which the president and both houses of Congress both houses.

[00:21:40] One party, United Congress, where president is one party, but Congress is of both houses being the other party, and then a split Congress.

[00:21:50] On average, the best return has been a united government, because whatever the president wants, Congress rubber stamps, and then you get that kind of growth.

[00:22:01] The Democratic president who heads up a split Congress, 13.2% is the average gain, and the frequency of advance has been 100% going back to 44.

[00:22:14] We've only had five observations, however, but what that basically says is, as you were sort of implying earlier, if Congress cannot agree on something because it's a split Congress, it's usually pretty good for the market because they're not enacting any laws

[00:22:30] that are going to be restrictive to business. So, what's the old saying if the opposite of pro is con, then the opposite of progress is Congress.

[00:22:41] Wait a minute, it's great. So, is there going to be a book of stove, all this. I mean, or are you just you don't want to share your material with the rest of us so you're just going to heart it yourself.

[00:22:53] Well, I also can't guarantee that everything that I say is original so I don't want to.

[00:22:59] That's all right. You can, you know, you can, you can give a little acclimation, you know, to that point, but you're a collector instead of having to see everything all over your office, you just have these things signed by the people who originally sent them and make a collection.

[00:23:13] the weight.

[00:23:14] the late rich hammer on who was an economist at Bloomberg who's saying my name is very well.

[00:23:19] The two of you have been graded at a stand-up routine. Definitely a Wall Street comedy

[00:23:24] now, you would have been perfect. So, yeah, definitely miss him. Yeah. So, with that though,

[00:23:31] and that 13 plus percent gain, is that during an election year? Because with Jeff Hirsch,

[00:23:36] he was telling us his Stock Traders Almanac, it doesn't matter whether the incumbent wins,

[00:23:42] you just want the incumbent to run. Now, if, say, Biden drops out, historically,

[00:23:48] that shows that Wall Street actually has a sell-off. So, Traders just want this guy to run,

[00:23:53] no matter what the outcome is. But that 13 plus percent. Well, let me throw out in 1964,

[00:24:01] the market was up. Obviously, the incumbent could not run. In 1968, Hubert H. Humphrey was not

[00:24:09] pleased as punch because he lost, but he was, in a sense, carrying on the programs of Johnson.

[00:24:18] And Johnson chose not to rerun, but the market was up in '68. So, you know, the market has done well.

[00:24:25] Also, was 1948 Truman's first year, or was '52, because he was not elected in '44.

[00:24:33] Right. I liked it. Yeah. A lot of--

[00:24:36] And I added them all in there, and we still got 100 percent.

[00:24:39] I can't remember. Do you do an earnings per share for the S&P forecast as well?

[00:24:45] Yes. Well, I personally don't. We use S&P consensus estimates, and basically what the street is

[00:24:53] saying is about $241 for the S&P 500 versus 218 in 2023. Yeah, because that's the other thing,

[00:25:02] you know, when I go back to history on the positive side here, that here we have the Magnificent

[00:25:06] Seven, I don't know, because I had nothing to do a yesterday because I was freezing my head off.

[00:25:09] I was going through the gross margin, earnings per share, and comparing them to like 40 years

[00:25:16] ago for the top 10. And it's not even close. I mean, the profit margin, the sales growth,

[00:25:22] the actual profits per share would indicate that the market should be more valuable,

[00:25:28] because the earnings are so much higher. And if interest rates come down,

[00:25:34] now you have a, you know, a conflict, you have a down, we have no reason to own,

[00:25:38] you have a reason to own debt because it's going to go up in value. But you don't have a reason,

[00:25:42] as soon as you get expires, you're not going to be buying it again at 2 percent or whatever.

[00:25:46] So, you know, we had-- there is no alternative, right? Tina, for all that time, when money was free,

[00:25:52] you know, we own some bonds, particularly junk bonds that are coming down of rates,

[00:25:56] because they go up in value. But it's not like you're discounting the present value

[00:26:01] of these companies at such a big discount, right? Because their earnings of, you know, sort of

[00:26:06] trajectory is locked in. It's not this. If you look at Microsoft, I mean,

[00:26:12] I'm not throwing Apple in there. But I mean, anybody who's basically a software repeating

[00:26:17] zero incremental cost company, yikes. Yep. Well, you're also bringing up a good point

[00:26:22] about how the economy has changed. I mean, it used to be a heavily manufacturing

[00:26:26] environment which had V-shaped recessions and recoveries. Now with it being much more service

[00:26:34] oriented and also with services, they are more scalable, et cetera. And so profit margins can

[00:26:43] improve dramatically. And global. You know, and global. Look at Microsoft. My lord. Sure.

[00:26:49] And also, if you go back to 1953, which is as far back as the Fed offers 10 year yield data,

[00:26:55] the average was between five and a quarter and five and a half. We're still trading at a

[00:27:00] substantial discount. So many would say that that's free money. And also, when you look at the

[00:27:06] unemployment rate remaining below 4%, well, remember some economists said that 5% was

[00:27:13] full employment at one point. That's right. That's right. Well, that's not when that's not when

[00:27:19] 10,000 people turn 65 every day and 5, 5,500 turn 70 every day in the United States for the next

[00:27:25] up and go what 20, 31, 20, 32, and all those other times we had people coming in from World War

[00:27:31] II. We had people coming in from Vietnam War. We had a birth rate growing up. We had marriage rates

[00:27:35] higher. We were the complete opposite of that today, including my favorite fact that over 70% of

[00:27:42] Gen Z and cleaners are living at home. I mean, Todd, I know you have that to look for you. You

[00:27:48] don't have to look for because your children will all be pilots and they'll be actually paying for

[00:27:52] your hospital care. But again, I just, it's so different. Almost every macro economic segment.

[00:28:00] Sam, I do want to ask you about this. We are starting to see, I'm calling this like the Facebook

[00:28:06] syndrome where they finally said, okay, maybe we shouldn't spend 70 billion dollars on a thing

[00:28:11] called the metaverse. So now we're going to cut those like, in their case, 25,000 jobs.

[00:28:16] Almost every day now we're seeing particularly tech companies come out and just

[00:28:21] unify to unity today. 25% of their headcount. Is that really saying that they didn't need those

[00:28:28] 25, 25% of the headcount? I think what it means is that based on changes that they have made

[00:28:34] to their strategic plans that yes, they don't need those 25,000 people that because if they

[00:28:41] were going to go down that path, then yeah, they needed those people. But now they've made an

[00:28:45] executive station not to do that. But at the same time, expectations are for technology to post a

[00:28:52] 16% rise in earnings in 2024 versus 10% for the market. Well, I just put together a portfolio

[00:28:59] of tech companies that have cut more than 10% of their, of

[00:29:03] personnel and shockingly, they're earning for share one up now. Get ready for this more than 10%. I mean, it's it's almost 100% correlated. Basically, they should have fired the CEO first for hiring all those

[00:29:15] people. And then, you know, they're right sizing, I guess. Maybe this is post pandemic. I get that, you know, they were who knew. But I think the unemployment rate, based on what I'm just seeing in the where the heavy employment is, the unemployment rate is going to go up this year on a on a on a, you know, marginal basis, simply because the other CEOs are now starting to get the medicine. And you're just there. We don't have quite the job displacement people seeking jobs available. We have, let's say two, three years ago. But it's not.

[00:29:45] And it's going to knock us down into a recession. I just don't get that exactly 4.2% is where we think the unemployment rate might be at the end of this year. But that's after all of these increases and interest rates, etc. But our feeling is that it's because of the consumer that we're not going to be falling into recession.

[00:30:06] Yeah. And if you look at any retail story you walk into, in most parts of the United States, the first thing you see is not is help me to help want it, you know, need today. I was, I had some people in from Canada, and we were going out, so trying to find, you know, a decent place to eat because, you know, the Canadians have a very limited diet to program. I don't know.

[00:30:26] It's got to be something dead and something with gravy on it. Right. So we were walking through the ball. Every store has a help wanted time. Every, it's incredible.

[00:30:37] I sell this recession thing is. Yeah. So Sam, so before we close out the show, any particular sectors that CFA say CFRA is recommending this year? Yes, you might be surprised to say that we recommend that you let your winners ride.

[00:30:53] Yeah. In the beginning of 2023, I was telling people, look, last year was a down year down 19.4%. History tells you that we are going to rotate from first to worst, meaning we're going to move away from the sectors that held up the best in the down year.

[00:31:11] Traditionally, your staples, health care utilities, and gravitate toward the three worst performing sectors, which, by the way, were communication services, consumer area and tech, all up 50% on average.

[00:31:25] Following up years, you actually want to let your winners ride and looking at numbers going back to 1991, which is as far back as S&P has sector level data.

[00:31:37] But in the, by sticking with the three best performing sectors, you added about 250 basis points per year to the markets return, and you saw a 10 percentage point improvement in the frequency of advance in that portfolio, and you beat the market 70% of the time.

[00:31:58] Did that happen Sam during a Fed cycles, the Fed cycle effect that rate rate heighting rate heading. Good question did not look into that specifically.

[00:32:08] But I also figure that, you know, when you're dealing with maybe 30 years worth of data, you don't want to add too many bully and logic questions because then the supply, the observation size ends up getting pretty small.

[00:32:23] But hang on for a second. Terry, what is bully and logic. Okay, thanks.

[00:32:27] And then take that one step further. If you were to own last year's 10 best performing sub industries, you almost doubled the market on average, and you beat the market 73% of the time.

[00:32:42] So, specific areas, application software, automobile manufacturers, construction and engineering, home building, hotels, resorts, cruise lines, interactive media and services, semiconductors, system software, tech hardware, and then finally

[00:33:01] creating companies and distributors. So, those were the 10 best performers last year. And as a group, they historically have continued to outperform in that subsequent year.

[00:33:14] What does that thing about inertia, things that in motion continue to stay in motion. Exactly. I just wanted to come back against the bully and logic mark you whatever the hell that shit is.

[00:33:23] Absolutely. Well, we're going to close out the show there, guys. So, coming up this week on Thursday, as far as economic data, we do have that critical CPI number that Sam was talking about earning season kicks off on Friday with the bulge bracket banks, lots to look forward to.

[00:33:38] And don't buy a hold sell. We actually have Jeffrey Hirsch on the show tomorrow. We have Gina Martin Adams is going to be joining us on Thursday. So Sam, you said it all today as usual.

[00:33:49] Thank you guys, we can't thank you enough for joining us today on a buy hold sell. My pleasure. Thanks a lot for inviting me, guys. Love it. Slinging Sammy Stovall. You hit it down to the park. You can't, baby.

[00:33:59] All right. Thanks, Toby. Absolutely. Absolutely. So on behalf of Sam Stovall and Ruben Smith, I am Todd Showemberger. Thank you once again for joining us on buy hold sell. We'll catch you next time. Take care.

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