Dear Client/Partner/Prospective Client:
2021 did not disappoint and it certainly surprised us in a number of ways. While the WFH (work from home) stocks came back to earth in a major way the stock market growth was quite astonishing. Back-to-back almost 20% annual gains for the S&P 500. That’s tough to beat and while we did that in 2020, we weren’t able to match that in 2021. Much of that came from our technology plays including one large exit, but we also expect a big bounce back in 2022. Did anyone expect Ford Motor Co. (F) to be up over 150% in any given year? How about Devon Energy, up 179%? While we had two of the top 5 winners in the S&P 500, we had some missteps too. The electric car and truck market, with Tesla having a corner on the market for a while, is now getting competitive. Furthermore, Ford is getting in on the action with it’s #1 seller the F-150 and adding the F-150 Lightning. General Motors has announced they will be coming out with an electric truck with their strong-selling Silverado. Rivian, Lucid and many others are hoping to become the next Tesla with better range and better technological features. It should be fun to watch them duke it out! Biotechnology companies also struggled across the board in 2021, with our long-term holding Exact Sciences (EXAS) challenged with growth and getting their products to enough doctors and hospitals.
Rising Inflation was a tremendous struggle in 2021, especially since government stimulus payments ended almost four months ago. I’m sure you noticed this in filling up your gas tanks or what groceries cost and other consumable goods at your local Target stores. The interesting thing with rising inflation was rising wages as well. Many businesses continue to struggle to find people that want to work so they’re forced to offer better wages. Some analysts have termed this, “The Great Resignation” as workers quit jobs and take higher paying ones across the country. Some have left the workforce entirely though too. U.S. employers added 199,000 jobs in December which was much less then the 450,000 expected and unemployment dropped to a lowly 3.9%. It’s not all bad as the persistent economic recovery continues to plug along and boost equity performance.
The COVID-19 pandemic continues on with multiple variants and you might wonder if the pandemic will soon become an endemic. Will this be something we have to learn to live with or will it be something else. Hopefully by the end of 2022, we have something else to talk about because it’s all the media covers on most of the major news channels each and every day.
Hopefully you were able to spend some time with family and friends throughout the holiday season. We look forward to seeing each and every one of you in 2022. Thank you for your continued trust in us and Happy New Year!
Sincerely,
J.B. L’Esperance, ChFC
If you have questions about our strategies or would like to open an account with Barking Sands Capital, please give us a call at 952.500.8854 or 248.687.1400 or email us at jb@barkingsandscapital.com.