Year In Review 2022
Publicerat: 2023-01-02 12:00
A chronicle by our Stock Broker Lars Jedemark
Stock Broker Lars Jedemark summarizes the year and shares his outlook for 2023.
Changed conditions. After a peak-to-trough decline of up to -35%, OMXSPI ended down by -24.6%. OMXS30 fell by -15.5%, with banks resisting.
The biggest headwinds have been high inflation, sharp interest rate hikes, and hawkish central banks. The ultra-easy monetary policy that drove interest rates down to 0% and negative rates in Sweden after the 2008 financial crisis came to an abrupt end in 2022. Excesses in the form of soaring valuations of growth companies, real estate, and unlisted assets came to a halt. Klarna's valuation dropped by 80%. Several Swedish companies, like Addlife, BHG, and SBB, fell by 70-80%. Among large-cap companies, Storskogen was the worst performer at -88%. In the U.S., technology companies also fell, with Nasdaq down by -35%, and some of the biggest losers with 60-70% declines included Meta, Spotify, and Tesla.
What about 2023? A mantra everyone is talking about is that we are entering a recession with high interest rates. It's not news. The stock market never goes down on command; unexpected events, as happened in 2022, influenced the market. What is happening now is a return to the "old" normal, with growth around 2% and interest rates around 3-4%. Fomo, Tina, P/E 200 are relegated to the scrap heap. Normal growth with normal valuations.
There has already been a value compression in the stock market where adjustments are made for falling profits. OMX is now at approximately P/E 15 from P/E 20. With that said, I believe we may see a gradual increase in the stock market in 2023 if there are signals of falling inflation. Look for companies that have fallen a lot but where the movement is sound (such as in the medical technology sector), also among companies with high dividends. Acquisition activity should increase.
I conclude with a quote from my favorite fund manager, Peter Lynch: "The only signal I need to buy is finding a company I like. In that case, it's never too early or too late to buy stocks."
Lars Jedemark, the author of this chronicle, is a stockbroker with us. If you have an active interest in stock trading, you can discuss directly with our stockbrokers. In addition, you will have access to recommendations, analysis, and the execution of buy/sell orders. For questions about stock brokerage, contact broker Lars Jedermark.
