Michael Barak, a Glendale, Calif., resident, won Barron’s 2023 forecasting challenge. Barak, 59, who has taught personal finance and is now a private-school CFO, scored 13 out of a maximum of 18. He edged out two other entrants on the tie-breaker, the closing level of the
Dow Jones Industrial Average.
The challenge again proved challenging. The average score was 4.1—I scored 2—among those who submitted answers online. (Due to an administrative error, we could not use mailed-in ballots.) The quiz offers a window on what investors were thinking ahead of what turned out to be a strong year for stocks. They weren’t overly optimistic.
We asked a range of questions, from whether the
S&P 500
would return 20% or more to
Bitcoin’s
closing price to whether the Federal Reserve would cut rates. Some 4% correctly picked
Salesforce
as the Dow’s top performer; 4% scored on
Walgreen Boots Alliance
as the worst. Since the Dow has 30 stocks, those percentages aren’t surprising.
| Here are some fun facts about the results. | |
|---|---|
| Number of participants in the 2023 quiz | 3,428 |
| Average score of all participants | 4.1 out of 18 |
| The lowest scoring forecast this year | The S&P 500 will return 20% or more in 2023. |
| The percentage that got the S&P forecast right | 4.20% |
| The percentage who projected that Bitcoin would finish the year above $30,000 | 8.10% |
| The question that received the most correct answers | Will the Federal Reserve cut rates in 2023? |
| The percentage that correctly predicted no Fed rate cuts | 50.40% |
| The winning score this year | 13 |
| The winning score in 2022 | 13 |
| Andrew Bary’s score this year | 2 |
Barak favors mutual funds and exchange-traded funds in his retirement account and, in his personal account, dividend-paying stocks such as
Visa
and
Mastercard.
“They take a little bit on every transaction,” he says. “As long as the U.S. economy is doing well and cash is in decline, they have a money machine.” His prize? A two-year subscription to Barron’s and lunch in New York with a staffer of his choice. We’ll announce a winner to the 2024 contest in January 2025.
Here are the correct answers to the 2023 forecasting challenge:
1) D
2) D
3) A
4) D
5) A
6) A
7) D
8) A,C
9) Salesforce.com (CRM)
10) Walgreens (WBA)
11) C
12) B
13) B
14) F
15) C
16) C
17) Tiebreaker: Dow Industrials closing level: 37689
Write to Andrew Bary at [email protected]
Last Week
Markets
Trading resumed after the Martin Luther King holiday. The House pushed off having to fund the government to March 1. Chinese stocks sold off, down some 11% this past week, amid reports the government told some institutional investors not to sell shares. U.S. December retail sales beat expectations, and jobless claims hit a yearly low. On the week, both the Dow Jones Industrial Average, up 0.7%, and the S&P 500, up 1.2%, set new highs; the
Nasdaq Composite
added 2.3%.
Companies
Davos, giddy over AI, began with European Central Bank chief Christine Lagarde, among others, pushing back on March rate cuts.
Goldman Sachs
and
Morgan Stanley
both reported their lowest earnings in four years, but Goldman beat quarterly expectations.
Apple
fell further behind
Microsoft
in market cap after it said it was removing a blood-oxygen monitor from some of its watches in a patent fight. In a rough earnings call,
Charles Schwab
CEO Walt Bettinger said times were the most challenging “since the bursting of the internet bubble.”
Deals
Kroger
said its proposed merger with
Albertsons
would be delayed as talks continue with regulators…A federal judge agreed with the Justice Department and blocked
Spirit Airlines
’ $3.8 billion takeover by
JetBlue.
The airlines will appeal the ruling…
Synopsys,
a provider of electronic design automation software, agreed to buy longtime partner
Ansys
for $35 billion…The Wall Street Journal said the European Union intends to block
Amazon’s
iRobot
deal.
Write to Robert Teitelman at [email protected]
Next Week
Tuesday 1/23
Fourth-quarter earnings season kicks into high gear with many megacap companies in diverse sectors reporting.
Johnson & Johnson,
Netflix,
and
Procter & Gamble
announce results on Tuesday.
Abbott Laboratories,
ASML Holding,
and
Tesla
release earnings on Wednesday.
Intel,
T-Mobile US,
and Visa round out the week, reporting quarterly results on Thursday.
Thursday 1/25
The Bureau of Economic Analysis releases its advance estimate of fourth-quarter gross-domestic-product growth. Consensus estimate is for GDP to have increased at a seasonally adjusted annual rate of 2%, after a 4.9% growth rate in the third quarter. U.S. GDP is expected to grow 2.4% for 2023 compared with 2022 levels.
Friday 1/26
The BEA releases the personal-consumption expenditures price index for December. Economists forecast a 2.6% year-over-year increase, matching the November data. The core PCE, which excludes volatile food and energy prices, is seen rising 3%, two-tenths of a percentage point less than previously. The year-over-year change in the core PCE is at its lowest level since March of 2021, and is running at an annualized rate of 1.9% over the past six months.
Email: [email protected]
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