Tudor November 2023 Commentary

Research-Based Investing and Guidance Since 1992

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Market Snapshot

November 2023

It Didn't Take Long

It didn't take long for markets to undo the 2023 incremental declines of August to October.

Markets managed to squeeze in the first correction of the year during those three months (corrections nearly always occur once or twice a year), but the entirety of declines was reversed in November.(1)

Why reversed?

Economic news during November tamped down fear of further Federal Reserve interest rate increases. New signs of slowing inflation reduced the risk of aggressive Fed action in coming months. Markets rationally found this appealing, responding favorably during the month with the largest monthly S&P 500 increase since October 2022.(5)

Nothing is more reliably a damper on markets (and nearly all asset classes) than a large increase in interest rates or recession risk.

Yes, interest rate risk declined in November, but recession risk has also faded from daily discussion as recent GDP numbers confirmed growth of 5.2% in the third quarter, even higher than the 4.9% initial announcement. As we noted last month, this reflects a vibrant consumer and also explains busy roads.(1)

Lesson Learned?

November action is yet another confirmation that market timing is not a profitable pursuit.


The Percentage of Households that Held Stocks

at the Beginning of the Great Depression(3)

History books suggest that when the market crash occurred in October 1929 it affected a wide swath of American society, but this is not true. Very few households held stocks in the 1920's and most were watching from the sidelines. Bank failures had a larger impact on the population at the time than the stock market. The movie It's a Wonderful Life shows this clearly.

Housing Prices in the Great Recession of 2007-2009 Declined More Than in the Great Depression

History is instructive, but is sometimes forgotten. Recent home price increases belie the carnage that occurred in the 2007-2009 Great Recession. Thinking that any asset class is immune to declines is short-sighted. On average, nationwide home prices declined by 33% peak to trough in the U.S. during the Great Recession period.(4)


Percentage of stocks

negative year-to-date

More than half of the stocks in our 5,300 stock database are showing declines year-to-date. A surprise to many as some stock indices show a positive trajectory for the year.

There are two factors at work here:

One - Popular stock indices showing large gains in 2023 are regrouping from bigger 2022 declines. The S&P 500 remains 5% below its December 2021 high water mark. The more aggressive NASDAQ has had a stellar 2023, but yet remains 9% below its December 2021 high.

Two - Big declines are often followed by snap-back rallies. The riskiest sectors decline the most in bear markets (as occurred in 2022), but rally more vigorously in market recoveries. This is how some major indices this year with large snap back rallies look favorable, yet remain below their highest levels of December 2021 COVID speculation.

Slow, steady, high quality strategies experienced lower declines in 2022 and have had no need to gain significantly in 2023 to recover.

Source: Value Line Investment Survey, November 24 2023

Tax Loss Harvesting

Tax loss harvesting is a concept that comes up every year at this time. It applies to taxable accounts that are subject to capital gains (not retirement accounts).

High quality advisory firms include this process in their annual agenda of services.

Throughout a calendar year, sales of securities may result in net gains subject to capital gains taxes (which are frankly quite reasonable).

Tax Loss Harvesting is the process of looking for positions held in a portfolio that are below cost that can be sold to offset year-to-date capital gains and reduce tax liability. This does not mean that positions sold in this process were poor choices, but rather that they are temporarily below cost and a sale will help lower the tax bill.

While not all institutions perform this sort of service, studies show that it can improve net performance by a fractional amount.


The Proportion of the S&P 500 Made Up

of Only Seven Stocks

Apple, Microsoft, Alphabet (Google), Meta, Tesla, Nvidia, Amazon



The Number of Stocks in the S&P 500

That Make up the Other 72%

Source: Reuters, Wall St Week Ahead Broadening of U.S. stock rally feeds investor optimism

The Lowest Ever

Pending home sales (those scheduled for closing soon) last month reached the lowest level ever since that metric has been tracked starting in 2001.

Blame high prices, fewer homes for sale and higher interest rates.(7)

Consider This...

“Average performance sustained for an above-average period of time leads to extraordinary performance. This is true not just in investing but careers, relationships, and parenting."

Morgan Housel

(We would add that this concept is a tortoise and hare story of long-term compounding. Warren Buffett accumulated over 90% of his wealth post age 65.)(6)

Dow Industrial Index

March 23, 2020 - 18,214 (2020 low)

November 30, 2023 - 35,951 (1)

97% Gain

Enjoy the week...
Grant S. Donaldson, MS, CPA

(1) yahoofinance.com, S&P500 historical data, Barrons, Morningstar.com, Vanguard benchmark returns

(2) Information available upon request

(3) Hoover Heads, The Great Stock Market Crash of 1929: Why History Textbooks and the Conventional Wisdom Get It Wrong

(4) Corelogic: Evaluating the Housing Market Since the Great Recession

(5) https://ycharts.com/indicators/sp_500_monthly_return

(6) The Psychology of Money, Morgan Housel

(7) https://www.cnn.com/2023/11/30/economy/us-pending-home-sales-october/index.html

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