The big bear breaks

Between victory laps and tv appearances, Morgan Stanley’s Mike Wilson took a break.

2022 was a banner year in his forecasting history: his market outlook was the most bearish of a dozen brokerage houses. He won. The S&P 500 dropped over 25% peak to trough, and the interviewers came calling. What would 2023 hold?

His response was again negative- he doubled down on the market dropping another 25%. It never happened.

There are plenty of reasons to be bearish- rates are high, unemployment is low, the economic recovery is slowing after the post Covid boom.

However, the stock market is not the economy. Last year’s drop was built on a theoretical recession (which never fully materialized).

Anyways, the bear finally changed his tune after the market charged north 20% this year.

Timing the market is hard. On any given day, your chance of making money in the market is roughly 50/50. However, longer time periods usually skew positive. If you must bet, taking the side of history is usually a wise move in the long run.