Investors Column – 2023 and the Stock Market

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October 2, 2023 by Scott Crosby - Views: 61

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Investors Column – 2023 and the Stock Market

S664-1.jpgThe year 2023 has been a rocky one for investors.  The compounded impact of politics, inflation, and the steadily increasing of interest rates by the Fed has certainly been felt by America’s stockholders – which, given the prevalence of 401ks and IRAs among employees and retirees, means the stock market’s ups and downs are causing a lot of heartburn.  

But with three quarters of the year behind us, where do we stand?  Did we make money?  Did we hold steady?  Or did we lose money?

The S&P 500 is the best composite statistic for America’s economic picture.  Overall, it has grown about 9%, which is certainly a positive note.


Let’s break that down a bit, and see how different sectors of the economy are doing.  Some improved, and others did not do so well.


With a stock price that has grown by a third in 2023, Apple Computer is clearly continuing to make products that people want to own, and that are preferred over those of their competition.


Tesla did well this year.  Although its PE (Price/Earnings) ratio has dropped from an insane 200 or more to a still-too-high 76 (17 is considered the norm), its stock price is approximately twice what it was at the beginning of 2023.  

A major category to consider is how goods get shipped to the consumer.  The country’s major means of transportation is railroading.  


The year’s big news about Canadian Pacific Railway was its purchase of Kansas City Southern Railroad.  Even combined, the company remains the smallest of the country’s major railroads (behind Union Pacific, Burlington Northern & Santa Fe, CSX, Norfolk Southern).  Yet CP is the only railroad which can boast lines in Canada, the U.S., and Mexico, as well as coast-to-coast.  

Railroads are a pretty good gauge of whether shipping needs are increasing or decreasing – i.e., whether goods need to be moved, and whether the economy as a whole is improving or declining.  The graph for CP’s stock has clearly experienced ups and downs, but on the whole, is positive.

Shining stars like Apple and Tesla are always pleasant to see, but the country’s bedrock is reflected in its overall need for railroads.  


Like the railroads, Caterpillar tells you a lot about economic trends.  For Caterpillar, however, the key issue to note is that the company’s sales are world-wide, not limited to just North America.  World-wide, construction has been on the increase.  The planet’s general economy is improving, and that means sales around the globe for Caterpillar.  So far, Caterpillar’s stock price has increased by more than a third.  Despite Russia’s war with the Ukraine, the overall world economy as a whole is growing.


The stock of Bank of America, the country’s largest bank, has dropped about 20% in 2023.  2023 has been a rough year for banks, with the failure of the Silicon Valley Bank as a major headline.  Banks tend to be very conservative, and bank stock prices tend to be fairly steady.  In contrast to Bank of America, JP Morgan Bank (JPM) shows a slight upward trend so far for 2023.  Any investor interested in buying a bank’s stock should look into what makes one bank different from the another.  Like any company, each has its own specific strategy.


Everyone has heard of Warren Buffet, and Berkshire-Hathaway is the company which serves as his vehicle to invest in other companies.  The graph shown is for “BRK-B”, Berkshire-Hathaway’s “B” stock.  The “A” stock sells for more than $560,000 per share (the “B” stock is intended to be affordable for smaller investors).  Berkshire-Hathaway has grown about twenty percent in 2023 so far.

Like the S&P 500, Berkshire-Hathaway’s stock price is a pretty good reflection on the general state of the American economy. 

Each of the companies described here offers worthwhile information for the would-be investor.  Should you buy the stock in any of them?  Perhaps; but there are many other good stocks worth buying as well.  So far, 2023 is a year of economic upswing.  

Nevertheless, it has been a tough year to decide how to invest.  Whether you have done as well as the economy, or better, or not as well should help you to decide where you made mistakes and where your investing habits need to improve.  

Classes at the University of Hard Knocks are always in session.  It is up to you to learn what is being taught, and – particularly as an investor – to profit from your mistakes.

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