CSI Update January 2023

January “bounced”. All the market average were up after a dismal December. I was up 11.5% in January. NASDAQ was up 10.7%, the Russell 2000 was up 9.7% and the NYSE was up 5.6%. I added to one existing position and sold about 1/3rd of another position for an 84% gain.

It looks like we may be seeing a slowing down of the interest rate hikes, but not an end. There are probably a few more hikes to come.  The interest rate hikes are really just starting to impact the economy. The labor market is still running hot, albeit with a few more significant lay-off announcements. Mortgage rates are in the 6-7% range. Historically this is not that high and I think more “normal”, but it is a shock to anyone under 35.  Oil is still under $90 a barrel, at least for now, but “core inflation” (excluding food and energy) is still running high. Ukraine is still at war, the 2 and 10 year treasury rates are still inverted and on and on. We are in a bear market and in a recession. I still think the market will correct. Valuations are still way too high on many stocks and their growth rates are slowing, their PE ratios are too high or they are losing money and have huge market caps. I have not seen any sign that the market has capitulated and is ready to go up consistently. I am not expecting great things for the markets in 2023.

I have not changed my valuation formula as it worked before the 2008 housing bust, after it, and before the 2020 bubble and after it. When the high-flying stocks go down, everything does, whether it makes sense or not. Many times, this is the time to buy, but not yet.

In late 2015 I started offering a paid subscription service which is similar to the Free Blog (2006 to 2015), but I tell you exactly what stocks I bought and why—and sold every day, with a weekly summary of activity, open positions, how many shares I own and their valuations. 92.5% of my closed positions have been profitable.

The cost to subscribe is $50 a month for individuals, with a 100 subscriber limit. First-time subscribers can purchase a 3 month subscription for $100. I am not trying to get rich by having thousands of subscribers. I give away almost all of the money I get for subscriptions. I do this for self-discipline in my investing, so I am accountable to someone besides myself, which helps keep me focused. I am NOT a trader. I buy my stocks thinking I will own them for 2 years. Many, I own for far less than two years, but some I have held for five years or more. Including my current open positions, 81% of my stocks have been or are profitable.

Through January 2023, I have averaged a 47.4% gain on the 68 stocks I have sold (62 winners and 6 losers) in my private portfolio since January 1, 2016. Seventeen of the 68 stocks have had buy-out offers, including two in 2016, six in 2017, two in 2018, none in 2019, two in 2020, four in 2021 and one in 2022.

My seven-figure total portfolio was up 42.7% in 2021, 30.6% in 2020 and 72.8% in 2019. I took most of these gains and banked them in cash. In 2022, I lost 15.3% less than ½ of the NASDAQ loss of 33.1% and have recouped more than half of that so far in 2023.

I stopped publishing my free weekly CSI Blog after 10 years of publishing at the end of 2015. Since inception of the Blog in 2006, I had 73 winners, 20 losers for a 78.5% win-rate with an average gain of 38.9% on the free blog.

If you are interested in becoming one of my private paid subscribers, please e-mail me at daveosowski@gmail.com to get all the terms and conditions.