Polar Opposites

Investors tend to over-extrapolate. I’ll use myself as an example.

One of my ten predictions for 2023 was that energy would be the first sector to lead the pack for three consecutive years since utilities did in the late 80s.


Not only did this not come true, but the opposite is happening. Energy is the second-worst performing sector YTD. Energy isn’t the only thing that bears no resemblance to the prior year. 2023 is laden with extreme turnarounds.

The U.S. dollar was a wrecking ball in 2022 as money flowed into the safest of safe havens. This is more of a risk-on year, and the dollar is going the other way. I’s currently down 4% on the year.

Global commodity prices soared in 2022 when Russia invaded Ukraine. That is unwinding and then some. The asset class has fully round-tripped.

Interest rates and inflation killed growth stocks last year. Interest rates haven’t reversed, but the performance of growth stocks has. There is plenty of room for debate as to why this is happening, but the numbers are what they are. The mega-cap tech stocks are undoing much of the damage done in 2022.

Value stocks were the darling of last year. Growth stocks got killed, and they were flat. This year is the exact opposite.

You’re seeing the same story play out in some of the most busted up names of 2022, IPO and ARKK. Their turnarounds are remarkable.

It’s normal to think that what’s happening today will happen tomorrow and the day after. Trends can and do last longer than you might think, but once they turn, it’s easy to be caught off guard. If you’re buying and selling individual names and sectors, remember that past performance is no guarantee of future results.




This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.