The Week Ahead: Learning by Looking Back

by Jeff Miller, A Dash of Insight

This is a special edition of Weighing the Week Ahead. With holidays and market closings in the middle of the next two weeks, we can expect a time of relative quiet. It is a good time to review the lessons from 2013. I’ll have a regular WTWA next week and (soon) my regular preview of the year ahead.

Here is a pictorial review of 2013 from the perspective of the individual investor. It is not based upon page views or ratings, but rather upon the economic, market, and public policy themes that could have helped you the most.

I managed to stay on the right side of most of these trends, and I hope you did as well. Here are the most important trends of the year — what was hot versus not and especially profitable versus costly.

The winners next year might be different, and some who lagged this year will remain in denial. I strongly recommend that you consider each comparison with an open mind.

Disagree? Other nominations? That is fine. Join in the comments! This is my scorecard, but I welcome dissent and discussion. I am including a few links, but in most cases the verdict should be obvious. I hope everyone enjoys this as much as I did in working on it!

It was a “risk-on” year.

Mr. B knows how to have fun! Who’s that guy he is playing against. Here was his advice about gold, going “long on fear.”

Doug Short’s charts make the data speak to you. There is no higher praise. Selling short? Not so good last year.

Fundamentals, represented by Chuck Carnevale and his relentless theme — Earnings Determine Stock Price — triumphed over the gadgets, seasonality, waves, and omens.

Kelly Evans is intelligent and informed, reaching to a larger audience–the winner from Maria’s departure. Rick Santelli’s message still gets the background cheers, but the audience is shrinking, perhaps because he has been so wrong.

Centrist compromise versus the liberal wing.

Centrist compromise versus the Tea Party wing.

Disciplined forecasting method gaining widespread recognition. Owning silver? Not so good!

Being rich and having a lot of assets under management does not assure success. You are as good as your last trade in the big-name hedge fund business.

Understanding the business cycle is really important. Many economists know that the ECRI has been wrong – -more than two years past the 100% forecast, and still not giving in. I am featuring Bob Dieli since he focuses on the full business cycle and has been calling it right in real time for more than 30 years. More here.

We all know and use Twitter. The Columbia Journalism Review explains about the sad decline of longform.

Josh Brown keeps bringing it no matter how many characters he has available. He has exceled on Twitter, blogging, and TV. Downtown Detroit? A sad story for the city of my roots.

Two respected economists were bearish. One kept his indicators and changes his opinions (See fine Ritholtz discussion).  The other kept his opinions and changed his indicators.

Professor Shiller has a Nobel prize and some new gigs as a partner in equity funds. These new projects do not involve market timing using his famous CAPE ratio. There is a growing realization that when something has not worked for several decades, it might be time for a review.

Musk acclaim is well-deserved. Johnson had good ideas for the wrong company at the wrong time.

Stimulus triumphed over austerity. A big surprise is that the true believers keep quoting Rogoff and Reinhart without any awareness of the errors.

The choice of Congress for the final “not hot” award will not be controversial. I understand that Bernanke has been a polarizing figure. Many believe that it will all end badly. For 2013 they were wrong, and those of us who did not fight the Fed were right.

Will Janet Yellen bat cleanup in this post next year?