At the end of last year we wrote an educational post highlighting some of the similarities between the sports card collectibles industry and stock market investing.  We wanted to see how well we’d do if we invested in some boxes of the newest baseball card product — 2023 Bowman Draft — featuring a rare Tom Brady autograph card and the rookie cards of Major League Baseball’s most recent batch of prospects.  As we noted in our prior post, opening packs of cards is the riskiest part of the sports card industry.  You simply don’t know which cards you’re going to pull, so your investment can quickly become close to worthless if you don’t pull any good cards, or you can hit it big by pulling a rare or highly sought-after card.  In the sports cards world, opening sealed packs is similar on the risk scale to buying stock options in financial markets that can quickly move sharply higher or go to zero.

So how’d we do in our recent box break?

Below are pictures of the various cards we pulled across the six boxes we opened.  All in all, of the 4,500 cards, we got 30 different autographed rookie cards along with dozens of “short-printed” parallel cards that are serial numbered.  These serial-numbered cards are more rare and thus more valuable than the non-numbered “singles” that fill up the majority of packs that we opened.

Our best pull was a Paul Skenes blue autographed rookie card serial-numbered out of 150 that was selling for roughly $450 on eBay at the end of December.  Skenes was the #1 overall pick last year by the Pittsburgh Pirates; a pitcher from LSU who is maybe most famous right now for dating LSU gymnast and NIL-celebrity Livvy Dunne.

After checking the most recent completed sale prices on eBay for all the cards we pulled, we found that the entirety of our collection was worth about 50% of our total purchase price of the six boxes.  Ugh.  We certainly didn’t find the rare Tom Brady that would have immediately doubled or tripled our initial investment!

From an investment standpoint, our experiment was not a success!  Down the road, there’s a chance that one of the autographed rookie cards we pulled will skyrocket in value.  After all, Mike Trout was a relative nobody when his rookie autographs first showed up in the 2009 version of the same product we opened.  The least rare of the Trout rookie autographs currently sells for five figures.  But the higher likelihood is that we’ll never make our initial purchase price back on these packs!

For any card collectors reading this that might see a card they’re interested in, feel free to reach out!

The S&P 500 has gotten off to a rocky start to the new year, but it hasn’t knocked down bullish sentiment yet. This week’s bullish sentiment reading from the American Association of Individual Investors (AAII) rose from 46.3% in the final week of 2023 up to 48.6% this week.  That edges bullish sentiment back towards the multi-year high of 52.9% put in place two weeks ago and still leaves bullish sentiment over a full standard deviation above its historical average.

As for bearish sentiment, things are not as extended, though at 23.5%, the share of bears is still several percentage points lower than the historical average (31%).

That means the bull-bear spread is also still historically in favor of bulls with a 25 percentage point gap between the two.

Including other weekly sentiment surveys, the picture is a bit more muddled albeit still showing a bias towards bullishness. For starters, after its holiday hiatus, the Investors Intelligence survey posted its highest reading on bullish sentiment since November 2021.  Conversely, this week’s reading in the NAAIM Exposure index tracking active managers’ equity exposure plummeted from a reading above 100 (meaning managers reported they were fully invested long) all the way down to 71. That is the lowest reading in the index since early November.

The S&P 500 is still within 2% of its record closing high reached exactly two years ago today, but beneath the surface, there have been some big moves.  The chart below shows a distribution of two-year returns for every S&P 500 stock that is currently in the index, and while there have been some big winners and losers over this period, the average component’s move has been just a modest decline of 0.54%.  So while the S&P 500 is down 1.9% from its high, over that same period, the ‘average’ stock in the index is down even less.  For all the talk over the last year about how narrow the market has been, over the last two years that hasn’t been the case.

In the tables below, we show the 25 best and worst-performing stocks in the S&P 500 over the last two years.  Starting with the winners, all of the stocks listed have rallied at least 63%, and there are another 14 stocks that are up over 50% that didn’t make the list. Perhaps what stands out most about the list of biggest winners is what stocks aren’t on it.  As shown, only three Technology sector stocks (and no Communication Services sector stocks) made the list, and of those three, not even one has a market cap of more than $30 billion.  The only mega-cap stock on the list is Eli Lilly (LLY), showing again how while mega-cap tech had a great 2023, on a ‘two-year stack,’ their performance has been unremarkable. While tech stocks weren’t well-represented on the list, Energy and Industrials filled the void with eight and six stocks, respectively.

Among the list of biggest losers over the last two years, 18 are down over 50% led lower by VF Corp (VFC) and Match Group (MTCH) which have both plummeted more than 70%. Both of these stocks now have market caps of less than $10 billion, and of the 25 names shown, only three (Paypal-PYPL, Estee Lauder-EL, and Pfizer-PFE) have market caps above $50 billion.

Please click the image below to view our January 2024 market calendar.  This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month.  It also includes market holidays and options expiration dates plus the dates of key economic indicator releases.  Click here to view Bespoke’s premium membership options.

While broad swathes of the equity market rose in 2023, that is not to say there were not areas of weakness. Of course there were some major spotlight stocks that investors would have completely lost their shirt on like Silicon Valley Bank had they been invested in the beginning of the year, but for those stocks still standing, below we show the 35 Russell 1,000 members that fell by at least 30% during the year. 2021 short squeeze and meme stock darling AMC Entertainment (AMC) was the worst performer on the year in 2023.  Price action in the stock was actually pretty flat throughout the year up until the summer. That’s when prices plunged on news that the company would be approved to convert its one year old preferred shares to common stock and a 1-for-10 reverse split. Ultimately, AMC would go on to finish the year with an 85% loss.

One theme popping up in the biggest losers is clean energy.  As EV sales decelerated last year, prices of stocks like ChargePoint (CHPT) and Lucid (LCID) hit major speedbumps, falling by 75.55 and 38.36%, respectively.  Other clean energy names like Enphase (ENPH) also faced large losses.

A handful of various retailers also made the list like Petco (WOOF), Advanced Auto Parts (AAP), and Dollar General (DG).  Dollar General possesses the largest market cap of those stocks, but of all the biggest losers, the vaccine makers were the largest in size. Both Pfizer (PFE) and Moderna (MRNA) fell by over 40%.  In the case of PFE, the stock is now below pre-pandemic levels.

In last Wednesday’s Closer, we noted how there was a somewhat elevated share of the S&P 500 experiencing gains of over 100%. Expanding to the Russell 1,000, there were 34 stocks with total returns of more than 100%. Two members of the Financials sector topped the list, Affirm (AFRM) and Coinbase (COIN), with gains of 408% and 391%, respectively.  Two mega caps also found their ways into the top of the list in the five and seven spots: NVIDIA (NVDA) and Meta Platforms (META).  One of NVIDIA’s largest competitors Advanced Micro (AMD) was also an over 100% gainer, though it falls a bit further down the list with a 127.8% gain. Other large caps like Broadcom (AVG) and Tesla (TSLA) also posted 100%+ gains.

Those semi conductor names were certainly boosted by the emergence of AI during the year, but other themes were also present among the year’s biggest gainers.  For starters, cruise liners like Royal Caribbean (RCL) and Carnival (CCL) put big dents in their post pandemic recoveries with RCL even closing in on pre-pandemic highs. In spite of high rates tamping down demand, housing inventories are historically tight meaning there is an increasing importance on new inventories hitting the market. As we showed in our Annual Report, like AI, housing was also a major theme across earnings calls last year. That offers a potential boon to the homebuilders and it showed in stock performance in 2023.  The homebuilder industry had strong representation with names like Builders FirstSource (BLDR), Top Build (BLD), PulteGroup (PHM), and Toll Brothers (TOL) posting over 100% gains.

2023 turned out to be a fantastic year for stocks after a horrible 2022.  Below we show the average total return of all stocks in each sector of the Russell 1,000 in 2023.  While most areas of the market moved higher during the year, the one area of equity markets that actually provided a negative return was Utilities. That sector’s stocks lost an average of 4.1% compared to a 20.5% average gain for the whole of the Russell 1,000.  As a reminder, Utilities has the highest dividend yield of any sector, but even after factoring in those relatively high dividend yields, the average stock in the sector posted a negative total return in 2023.  Consumer Staples just barely netted out an average gain, while Health Care, Energy, Real Estate, and Materials all also underperformed the broader index.  That leaves Communication Services, Financials, Consumer Discretionary, Industrials, and Technology each with the average stock gaining more than 20% on the year.  Given the emergence of AI in 2023, Tech was the top performer.  In fact, the average Tech stock was up 43.8%, which was more than twice that of the average Russell 1,000 stock.