Scott Galloway's predictions for 2024; Charlie Munger's investing playbook; Vintage footage featuring Ben Graham; Bridgewater's flagship fund cratered late last year; Ukrainian art still available

1) Longtime readers know I'm a huge fan of my friend and NYU marketing professor Scott Galloway, who's out with his 2024 Predictions. Here's a summary, with my quick comments in brackets:

• U.S. Inflation Drops Below the Fed's Target of 2.5% [note: the Fed's target is actually 2%. I mostly agree, though think inflation will be closer to 3% in the second half of the year... for more on this, see this recent New York Times article: Will America's Good News on Inflation Last?]

• Housing Sales Boom [to me, it depends on how one defines boom – I agree that unit sales will be much higher than current severely depressed levels]

• Paramount Consolidated, Disney Consolidator [I agree]

• Two Stock Picks: Streaming Laggards [I don't have an opinion on Warner Brothers Discovery (WBD), and I agree that Disney (DIS) is likely to outperform]

• TikTok Comes for Netflix and Spotify [I disagree – I think the government is finally going to crack down on TikTok]

• Peak AI [I agree that valuations are too high]

• Big Tech Stock Pick: Alphabet [I 100% agree!]

• Tech of the Year: GLP-1 [I also 100% agree. As a side note, if you wish to subscribe to my weight-loss drugs e-mail list, simply send a blank e-mail to: weightlossdrugs-subscribe@mailer.kasecapital.com]

• India Is the New China [I agree]

• Geopolitics: U.S.-China Relations Thaw [I agree]

• Geopolitics: Saudi Arabia and Israel Normalize Relations [if not this year, then next year – fingers crossed!]

• Musk Loses Control of Twitter (Or Sells It) [I wish, but I doubt it... Musk is highly emotionally committed and has deep enough pockets to cover losses]

• Meta's 2024 Growth Vehicle: WhatsApp [I agree... I use WhatsApp constantly!]
• Political Prediction: Biden Gets Reelected, and Trump Gets Sentenced [no comment, as I try to keep politics out of these e-mails!]

(Scott also shares additional commentary on his prediction in his latest Prof G podcast episode here.)

Thank you, Scott!

And speaking of NYU...

On the flight to Orlando last night to attend the ICR conference today and tomorrow, I happened to sit next to a guy who had the same Samsung Fold phone I have (which I wrote about a year ago). We started chatting about how much we love our phones, and soon discovered that I spoke to his investing class at NYU's Stern Business School in 2012, where I pitched Netflix (NFLX) at under $10 per share!

2) Over the weekend, the Wall Street Journal took an in-depth at growth and value investing since the global financial crisis and what Charlie Munger had to say about this in the months before he passed: Can Charlie Munger's Investing Playbook Still Work? Even He Wasn't So Sure.

I think Munger was right that investing is hard these days, but his followers are also correct that savvy, patient investors can still find great opportunities (at least a few times a year). Here's an excerpt from the WSJ article:

In the months before his death, Munger acknowledged that the traditional hunting grounds of value investors had been picked over. The low-hanging fruit was gone, he said. Investors had almost no choice but to own a few richly valued tech behemoths just to keep pace with the market, he suggested.

"I think value investors are going to have a harder time now that there are so many of them competing for a diminished bunch of opportunities," Munger said at Berkshire's 2023 shareholder meeting. "My advice to value investors is to get used to making less."

Yet many of Munger's pupils are staying faithful to his investing playbook: identifying the fundamental value of businesses and betting big when opportunity arises.

The below charts from the article – showing the astounding outperformance of growth over value since 2009 and the huge difference in price-to-earnings ratios – further reinforces my view that value is poised to outperform:

3) Speaking of learning from investing legends, I enjoyed this CBS News video from the 1950s about the stock market, featuring the godfather of value investing: Ben Graham, who was Warren Buffett's teacher and mentor and the author of Security Analysis and The Intelligent Investor:

4) In contrast with true investing legends Buffett, Munger, and Graham...

I think Ray Dalio – who runs the world's largest hedge fund firm, Bridgewater Associates – isn't one, for reasons I've outlined in prior e-mails.

Sure enough, Bridgewater's flagship fund cratered at the end of 2023, badly trailing the market and its peers... Here's Bloomberg with more: Bridgewater's Flagship Macro Fund Lost 7.6% Last Year. Excerpt:

Bridgewater Associates's flagship hedge fund lost 7.6% last year, with all of the drop coming in the last two months of 2023, according to people familiar with its performance.

The losses for the world's biggest hedge fund corresponded to the biggest two-month gain in global bonds since at least 1990 and a roughly 14% gain in U.S. shares.

The Pure Alpha II fund was up 7.5% through October before dropping about 14% in the following two months.

Why investors remain with Bridgewater is beyond me, in light of dismal short- and long-term performance (Pure Alpha II has compounded at a mere 3.5% since 2012) and the shocking revelations about Dalio and the weird cult at his fund – exposed in Rob Copeland's recent book, The Fund: Ray Dalio, Bridgewater Associates, and the Unraveling of a Wall Street Legend.

5) The Ukrainian art show, auction fundraiser, and cocktail reception on Friday was very successful – we raised nearly $10,000, so a huge thanks to all of my readers who bid/donated!

For the art that didn't receive any bids, I created a new web page with fixed prices for everything that's still available here – so please take a look and feel free to forward this to anyone you know who might be interested.

All donations go to my charity partner, TAPS, a U.S. 501(c)3 (www.taps.org/Tilson), so they are fully tax deductible.

Thank you!

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.