VALIDATION OF PROGNOSIS FOR THE YEAR AS LEE HITS 2023 TARGET

“In the United States, our greatest single source of wealth is the minds and talent of our young people. Not to use it is stupid - to waste it is a crime." ~ Isaac Stern

Good evening,

When Tom Lee said a year ago that the S&P would end 2023 at 4750, many were inclined to dismiss the prediction as the view of a permabull who had contrarianed himself into a corner. Consensus was expecting a hard landing and inflation fighting lasting a decade, which did not exactly lend itself to the proposition of a year up ~24%.

As the proverbial chickens are hatching, it turns out that not only did Lee come closer than any strategist out there to predicting the market’s trajectory; he actually came within one-half of one percentage point – less than the allowance for statistical error – to the actual close at 4 PM on the last trading day of the year, which happens to be today.

Not one for chest-beating or victory laps, Lee is already focused on the future. He sees the end of this year as a launching point for further gains. “The median max gain over the next 18 months is +22%. There is only one instance, May 2007, when the max further gain was nominal (<5%), while the other 10 instances saw significant further gains.”