2023 Is In the Books...

2023 is in the books…

… and what a year it was. 

The S&P 500 rallied 24% on the year, while the tech heavy Nasdaq gained a blistering 54%. 

But it wasn’t just the big boys.

The Russell 2000, which tracks the performance of “small caps”, closed 2023 up 15%... following a slow start to the year.  

Even “shitcos” joined the party. The ARK Innovation ETF (ARKK) - a fund that invests in growth stocks like Coinbase (COIN), Block (SQ) and Roku (ROKU) - spiked 67% this year… far outpacing the major indices. 

Few saw this coming…. 

Heading into 2023, most investors were worried about inflation, rising interest rates, and a possible recession. 

But none of these concerns could stop the bull market. Stocks shrugged off everything that was thrown their way… including a regional banking crisis scare in the spring. 

Crypto also had a phenomenal year. 

Bitcoin ended the year up 157%, while Ethereum gained 91% in 2023. 

Many altcoins delivered even bigger gains. Solana (SOL) skyrocketed 950% on the year, while Injective (INJ) spiked more than 2,800%. And that’s just to name a couple. 

These are unbelievable gains. But 2024 could offer even bigger opportunities to savvy investors.

We’ll explain why today. But we want to first welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

In this issue, we recap the incredible investing year that was 2023. We also gaze into our crystal ball to see what next year may have in store. 

Let’s jump in… 

Artificial Intelligence (AI) Took The World By Storm

Unless you’ve been living under a rock, you know that AI was the investing story 2023.

It’s why stocks like Nvidia (NVDA), Microsoft (MSFT), and Google (GOOG) performed as well as they did. 

It also ignited a mesmerizing rally in semiconductor stocks… sending industry leaders like Nvidia (NVDA), Broadcom (AVGO), and Super Micro Computer (SMCI) into the stratosphere. 

Of course, investors are no strangers to big, exciting narratives. Most of these trends come and go. Only a select few change the world. 

In this case, AI appears to the latter. It has the potential to be one of the most revolutionary technologies in decades, if not of all time!

And that means serious opportunity… 

According to Bloomberg, the AI industry could grow at a compound annual growth rate (CAGR) of 42% over the next decade. That’s many times faster than the economy as a whole is projected to grow. 

So, don’t expect the excitement around AI to fade away anytime soon. 

This is clearly great news for AI giants like Nvidia and Microsoft. It is also incredibly bullish for lesser known AI players like Datadog (DDOG), CrowdStrike (CRWD), and Palantir (PLTR).

It’s also a massive tailwind for AI crypto projects such as Fetch AI (FET), Render Network (RNDR), and Akash (AKT).

So, don’t listen to the naysayers. AI is the furthest thing from a bubble. It’s the real deal. 

Of course, we’re not just bullish on AI as we look ahead to 2024… 

Ethereum is Poised for a Major Rebound

We also think ETH could have a huge year in store. 

Ethereum, as previously noted, gained 91% in 2023. That’s more than a respectable gain.

But ETH trailed bitcoin in 2023… which is not something that many would have expected. 

To make matters worse, ETH massively underperformed rival Layer 1s Solana and Avalanche (AVAX). 

The sentiment towards ETH is now in the gutter. Many longtime bulls have capitulated their positions. 

That alone makes ETH an interesting contrarian bet. But that’s not the only reason we’re bullish on Ethereum heading into the new year. 

Take a look at this chart. It shows the performance of ETH vs. BTC. When this line is rising, it means ETH is outperforming BTC.

We can see that this ratio stopped falling back in October… after hitting a key support level. This tells us that ETH has likely bottomed out relative to BTC… making now a good time to get involved. 

Before we sign off, we want to leave you with one final piece of information… 

Bull markets don’t go straight up. 

The Nasdaq rallied 5% during the month of December. 

Small caps have been even hotter The iShares Russell 2000 ETF (IWM) has surged more than 11% in December,

At this stage, stocks across the board are pretty extended. 

So, don’t be surprised if the market pulls back before heading higher.

The US Dollar (DXY) is at MAJOR support right now…

Here’s how things could look on the SP500 if this plays out in Q1 2024:

We wouldn’t be surprised at all to see some profit taking early into the new year. 

If that does happen, don’t be alarmed. After all, stocks don’t go straight up… even in bull markets. 

Instead, treat pullbacks as an opportunity to load up on the highest quality names. 

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See You Next Sunday!