The controversial opinion of a stock market legend. What awaits from 2023?
More or less everyone agrees that 2023 will not be an easy year and we will not avoid a recession. But there is a legend among these experts and economists who say the complete opposite!
According to John Rogers, Chairman and Co-CEO of Ariel Investments, the United States will avoid a recession this year because the Federal Reserve will control inflation, which will give the stock market a boost. Which is a view that goes more or less against the grain.
The Dow Jones Industrial Average is likely to rise 10% or more in 2023, and the S&P 500 index more than 10%, Rogers told business leaders at the Executives' Club of Chicago's annual event devoted to the outlook. Last year, he correctly predicted a sharp rise in inflation and that Bitcoin was a bubble that would burst.
"We are much more optimistic today than we were a year ago," Rogers said. "The Fed is doing the right things in terms of the money supply."
Rogers, a veteran of the fund industry, said the worst is over and the bad news is already baked in. He expects the Fed to get inflation back to 4.5%.
His views are at odds with those of most investors as well as three leading Chicago economists who earlier this week predicted a mild recession by the end of the year. Professor Randall Kroszner, a former Fed governor, predicts that interest rates will peak at 5. 5% and the bank will keep them higher for longer. Interest rates must be raised above 5% immediately or disaster will strike, says senior economist
What will thrive?
Rogers said cyclical stocks will do well, adding that he is all in on US stocks. He added that auto-related companies are well positioned and that anything related to housing and real estate will do really well. Rogers also favors stocks in advertising companies and the leisure sector. Very bold words.
Chicago-based Ariel was founded in 1983. The firm sells mutual funds and other investment vehicles with a focus on value investing.
Rogers is the founder of Ariel Capital Management. The firm was founded with $10,000 in financial support from friends and family. The Ariel Fund went public on November 6, 1986. In November 2000, it had 41 employees. In February 2002, the firm had 51 employees and more than 120 institutional clients (including United Airlines, ChevronTexaco, and the California State Teachers' Retirement System), which by April 2005 had grown to include institutional clients such as Walmart and Pepsi. In 2008, the company had more than 100 employees.
Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.
