February 2024
Dear Investors,
2024 started just as 2023 ended, with markets mostly going up. Not everything and not everywhere, but still up they went. The exceptions are still China (with Hong Kong as a byproduct) and small caps, which were everyone’s favourite as the year started.
With the scars of 2022 still very fresh, everyone is anxiously waiting for the next shoe to drop and for something bad to happen (Taiwan, the US elections, pick your poison). But what if nothing bad were to happen? Indeed, the current period has some similarities to 1994-1995. Back then, the US economy had just gone through its Savings and Loans crisis, interest rates were relatively high (they would peak at 6% in 1995) and everyone was half expecting a recession.
Anyway, the recession never arrived, and a new technology was just beginning to be heard of: the Internet. No one knew exactly what it could be used for or if it would actually be useful (“what do you mean reading the newspaper on a screen, I will never do that”), but it was certainly happening. This reminds us of artificial intelligence today... Everyone is talking about it but no one is really using it (yet), its users are still unclear and it all seems more hype than anything else. Just like the Internet did back in 1995. As Mark Twain is supposed to have said, “history doesn’t repeat, but it rhymes”.
So we shall see. No market ever goes straight up, clearly, but the amount of anxiety we are seeing just as markets are making new highs is certainly interesting to note. New highs are to be welcomed, especially after not having happened for a while (two years in today’s case) and generally portend new highs in the future.
Best regards,
Your CaridaB Group Team
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