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so I've written about this quite a bit in the various places that I write in English and in other languages and the simple fact is and this has worked not perfectly but almost perfectly in 2023 and the last part of 2022. categories of stocks not every individual one that fall the most in a bear Market bounce the most early in the next bull market this if you'll pardon the pun is almost categorically true the fact of the matter is that that worked pretty perfectly as you look at what dropped in 2022 in the period from October the beginning of October in 2022 when the midterm Miracle started the nine months to begin October 1st before a U.S midterm election and end subsequent June 30th the most consistently profitable nine months in all of measured stock market history throughout that period And since the categories that have done best not every weekend every month but overall in fact a recorder have been the ones that declined the most in the bear market so this is overly and simply growth doing well value lagging bigger doing better than smaller things that are higher quality doing better than things that are lower quality within both of the categories that I just mentioned these are the categories like let's say big tack that got battered the most in 2022 and from the bottom in October early October bounced the most ever since this which I call the bounce effect has been working really really well it'll continue to work well for a while exactly how long I don't know but it normally works for about the first year of a bull market sometimes a little longer sometimes not and is usually supplanted when the world has enough confidence in future economic growth whereas before it hadn't as the bear Market climaxed that people get to the view that companies that don't have inherent growth attributes and are inherently lower quality will be able to grow with the economy now in different bear markets that act differently different categories of stocks lead the market down and those categories typically lead the market back up this time it's those that I cited so that for example the defensive stocks the consumer staples energy utilities value and smaller stocks overall didn't lag in 2022 but they also didn't rise as much in 2023 so I'm saying to you this effect goes on a little longer it'll transition in the thing to look for to see when it might transition is when the world starts to have more oomph or emphasis on boy the economy is growing nicely now we can now get growth out of these other ones unlike what we believe before when we thought the world was having so many economic growth problems and economic growth fears domestically and overseas and with that that describes to you pretty much perfectly how the markets operated this year and the beginning of last year and will for a while that thing which I call the bounce effec
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