Looking Good for 2024
S&P 500 24%
Nasdaq 43%
Dow Jones 14%
The final numbers are in. And they’re impressive.
After a bear market in 2022, the market indexes came back sharply in 2023. That’s not unusual. Prior to last year, there had been nine years of negative S&P 500 returns since 1980. Seven of those down years were followed by up years, and four of those seven up years posted returns of 20% or higher. The market doesn’t usually stay beaten down for long.
Most of the 2023 S&P returns came after October when the Fed indicated it was done hiking rates and the benchmark 10-year Treasury rate fell sharply. Stocks finished 2023 with nine straight up weeks. The late-year rally also broadened out to include several sectors besides technology.
Sure, stocks had a nice recovery in 2023. But the S&P 500 is just a smidgen below where it was at the beginning of 2022. An optimist would say that the market got back everything it lost and is within a whisker of the all-time high. A pessimist might say that the market has gone nowhere in two years.
I tend to side with optimists. It was the steepest Fed rate hiking cycle in decades, and we got through it without the requisite economic pain. The market is poised to break new ground by making new all-time highs. Inflation and rising interest rates have held stocks down these past two years. But both those things have peaked and are moving lower. The main impediments to rising stock prices are going away.
Things look good at this point. But there are always risks. The economy could decelerate into recession, even though that keeps not happening so far. Inflation could reignite and rates could rise again. Anything is possible. And there are always risks. But more positive returns seem more likely than not in 2024.
Past Month Activity
December 5th
NextEra Energy, Inc. (NEE) - Rating change “HOLD” to “BUY”
December 19th
Purchased Alexandria Real Estate Equities (ARE) - $129.54
Portfolio Recap
AbbVie Inc. (ABBV)
Yield: 4.0%
It wasn’t a very good year for this biopharmaceutical company stock in 2023. It finished the year about even with a total return of -0.45%. But it was a challenging year with Humira losing patent protection in the U.S. Things should improve from here. In fact, ABBV finished the year strongly, moving about 14% higher in the last month to the highest level since last April.
The market likes that AbbVie is purchasing biotech company ImmunoGen (IMGN) for $10.1 billion and Cerevel Therapeutics (CERE) for $8.7 billion. Both deals should enhance the already strong pipeline longer term. But its current pipeline should lift the stock sooner. The stock sells at a low valuation and investors sense that it might turn the Humira corner sooner ahead of a very bright future. BUY
Alexandria Real Estate Equities, Inc. (ARE)
Yield: 4.0%
The Fed’s indication of three rate cuts next year added another up leg for some of the best interest rate-sensitive stocks. ARE has soared over 40% since the low of late October. But we didn’t miss the boat. The stock is still more than 40% below the all-time high. The company also has a highly reliable and growing business that should thrive in any economy. It’s cheap with strong momentum ahead of a period of likely strong performance as interest rates abate. BUY
Digital Realty Trust (DLR)
Yield: 3.6%
This data center REIT has pulled back a little from the recent high. Even though REITs had a terrible 2023, DLR returned 39% for the year. It looks like REITs have bottomed out and are on their way higher as interest rates have likely peaked and have been falling. Digital also has the additional catalyst of increasing AI spending and is getting a boost from the AI craze. DLR tends to pull back after a surge higher and the calls were sold when it hit a new high. HOLD
Intel Corp, (INTC)
Yield: 1.0%
This previously beleaguered and left-for-dead chipmaker stock has been reborn. INTC soared over 50% between late October and the end of the year and finished 2023 with a spectacular 93% return. Earnings indicate that Intel’s turnaround is well on track. It has promising new chips coming out in high-growth areas and its foundry business could be huge. The stock got dirt cheap, and investors are increasingly willing to bet on the company’s future. I expect this to be another strong year for Intel as the turnaround to profitability comes to fruition. But after this recent huge surge, it may take a breather or pull back. BUY
Marathon Petroleum Corp, (MPC)
Yield: 2.2%
This newly added oil refiner has blown away the performance of its peers and the overall market for several years. Even though the energy sector posted a negative return for 2023, MPC returned a solid 30% for the year. While the environment can vary from quarter to quarter, it should remain an overall profitable environment for refiners over the next several years. It’s good to have something in the portfolio that benefits in case the economy continues to be stronger than expected. BUY
NextEra Energy, Inc. (NEE)
Yield: 3.1%
NEE has been bouncing around. But the stock is still in a strong uptrend that began in early October and it’s up over 30% from the 52-week low. The clean energy utility delivered solid earnings and management reiterated previous growth projections and said the company expects to deliver earnings near the top of the expected range through 2026. This stock is still very oversold, especially considering interest rates have likely peaked. The stock has likely bottomed out and is now in a positive trend. BUY
Realty Income Corp. (O)
Yield: 5.4%
REITs had a crummy 2023 as interest rates rose higher for most of the year. The legendary income stock should be a great buy right now. It’s cheap, selling more than 30% below the all-time high set before the pandemic. There is upward momentum. It has moved about 30% off the bottom set in October. And interest rates have likely peaked, removing the main downside catalyst that has been in place for the past two years. And its retail staple properties, and new data center acquisitions, should produce reliable revenue in just about any economy. BUY
Qualcomm Corp. (QCOM)
Yield: 2.2%
Although QCOM was a technology laggard in 2023 with a 34% total return, it has been coming alive lately. It soared about 40% higher between late October and the end of the year. I believe this is a company that will benefit from the AI revolution later than the 2023 movers and shakers. But it will come to mobile devices. Qualcomm is introducing new AI chips for PCs and smartphones that could be big sellers this year. It’s looking like 2024 could be a much better year. QCOM has already started to ascend but it still remains a long way from the all-time high. BUY
The Williams Companies, Inc. (WMB)
Yield: 5.1%
The natural gas pipeline company reported strong earnings growth and moved to within pennies of the 52-week high. But WMB has pulled back a little bit over the last month as oil prices fell and the overall energy sector struggled. But business remains solid and not dependent on commodity prices. It pays a well-supported dividend (with 2.38 times cash flow coverage). Recent acquisitions and expansions ensure more solid growth going forward all the way out to 2028. This should be a solid holding in any environment. BUY
Xcel Energy Inc. (XEL)
Yield: 3.4%
This clean energy utility stock has been trending slowly higher since the beginning of October. The low has likely been hit. XEL had a convincing 17% move off the low. But, like NEE, XEL came under pressure as analysts expressed concern about the solar energy business amid the current high interest rates. But this is one of the best utility stocks to own and the recent debauchery may prove to be very temporary. XEL still sells near the lowest levels of the past several years and now has positive momentum. BUY
Existing Call Trades
Sell DLR January 19th $135 calls at $6.00 or better
This looks like a close one right now. DLR is just pennies below the strike price with 17 days to go before options expiration. The stock has definitely leveled off since hitting a high about a month ago. We’ll see what happens with the market and this stock in the next couple of weeks. But we locked in a high income and will get a strong total return if the stock is called.
Sell INTC January 19th $42.50 calls at $3.50 or better
INTC had another surge higher after the calls were sold. The company announced new PC chips that could ignite a new upgrade cycle. But the stock had an incredible year and an enormous 50% surge at the end. It would be normal for the stock to take a breather and pull back.
Current Portfolio
| Open Recommendations | Ticker Symbol | Entry Date | Entry Price | Recent Price | Buy at or Under Price | Yield | Total Return |
| Qualcomm Inc. | QCOM | 5/5/21 | $134.65 | $144.63 | $130.00 | 2.21% | 14.15% |
| Intel Corporation | INTC | 7/27/22 | $40.18 | $50.25 | $35.00 | 0.99% | 31.02% |
| The Williams Companies | WMB | 8/24/22 | $35.58 | $34.83 | $38.00 | 5.14% | 6.25% |
| NextEra Energy, Inc. | NEE | 4/25/23 | $77.50 | $60.74 | $65.00 | 3.08% | -20.27% |
| Realty Income Corp. | O | 6/27/23 | $60.19 | $57.42 | $62.00 | 5.36% | -1.43% |
| Digital Realty Trust | DLR | 7/18/23 | $117.31 | $134.58 | $125.00 | 3.63% | 16.87% |
| AbbVie Inc. | ABBV | 7/25/23 | $141.63 | $154.97 | $150.00 | 4.00% | 10.51% |
| Xcel Energy Inc. | XEL | 8/22/23 | $57.95 | $61.91 | $65.00 | 3.36% | 8.69% |
| Marathon Petroleum Corp. | MPC | 10/24/23 | $149.45 | $148.36 | $155.00 | 2.22% | 0.37% |
| Alexandria Real Estate Eq. | ARE | 12/19/23 | $129.54 | $126.77 | $140.00 | 4.01% | -1.17% |
| Existing Call Trades | |||||||
| Open Recommendations | Ticker Symbol | Intial Action | Entry Date | Entry Price | Recent Price | Sell To Price or better | Total Return |
| DLR Jan 19th $135 call | DLR240119C00130000 | Sell | 11/22/23 | $6.00 | $3.20 | $6.00 | 5.11% |
| INTC Jan 19th $42.50 call | INTC240119C00042500 | Sell | 11/29/23 | $3.50 | $7.93 | $3.50 | 8.71% |
| as of close on 12/29/2023 | |||||||
| SOLD STOCKS | |||||||
| x | Ticker Symbol | Action | Entry Date | Entry Price | Sale Date | Sale Price | Total Return |
| Innovative Industrial Props. | IIPR | Called | 6/2/20 | $87.82 | 9/18/20 | $100.00 | 15.08% |
| Qualcomm | QCOM | Called | 6/24/20 | $89.14 | 9/18/20 | $95.00 | 7.30% |
| U.S. Bancorp | USB | Called | 7/22/20 | $36.26 | 9/18/20 | $38 | 3.42% |
| Brookfield Infras. Ptnrs. | BIP | Called | 6/24/20 | $41.92 | 10/16/20 | $45 | 8.49% |
| Starbucks Corp. | SBUX | Called | 8/26/20 | $82.41 | 10/16/20 | $88 | 6.18% |
| Visa Corporation | V | Called | 9/22/20 | $200.56 | 11/20/20 | $200 | 0.00% |
| AbbVie Inc. | ABBV | Called | 6/2/20 | $91.04 | 12/31/20 | $100 | 12.43% |
| Enterprise Prod. Prtnrs. | EPD | Called | 6/24/20 | $18.14 | 1/15/21 | $20 | 15.16% |
| Altria Group | MO | Called | 6/2/20 | $39.66 | 1/15/21 | $40 | 7.31% |
| U.S. Bancorp | USB | Called | 11/25/20 | $44.68 | 1/15/21 | $45 | 1.66% |
| B&G Foods Inc, | BGS | Called | 10/28/20 | $26.79 | 2/19/21 | $28 | 4.42% |
| Valero Energy Inc. | VLO | Called | 8/26/20 | $53.70 | 3/26/21 | $60 | 11.73% |
| Chevron Corp. | CVX | Called | 12/23/20 | $85.69 | 4/1/21 | $96 | 12.95% |
| KKR & Co. | KKR | Called | 3/24/21 | $47.98 | 6/18/21 | $55 | 14.92% |
| Digital Realty Trust | DLR | Called | 1/27/21 | $149.17 | 7/16/21 | $155 | 5.50% |
| NextEra Energy, Inc. | NEE | Called | 2/24/21 | $73.76 | 9/17/21 | $80 | 10.00% |
| Brookfield Infras. Ptnrs. | BIP | Called | 1/13/21 | $50.63 | 10/15/21 | $55 | 11.65% |
| AGNC Investment Corp | AGNC | Sold | 1/13/21 | $15.52 | 1/19/22 | $15 | 5.92% |
| ONEOK, Inc. | OKE | Called | 5/26/21 | $52.51 | 2/18/22 | $60 | 19.62% |
| KKR & Co. | KKR | Sold | 8/25/21 | $64.52 | 2/23/22 | $58 | -9.73% |
| Valero Energy Inc. | VLO | Called | 11/17/21 | $73.45 | 2/25/22 | $83 | 15.53% |
| U.S Bancorp | USB | Sold | 3/24/21 | $53.47 | 4/13/22 | $51 | -1.59% |
| Enterprise Product Ptnrs | EPD | Called | 3/17/21 | $23.21 | 4/14/22 | $24 | 11.25% |
| FS KKR Capital Corp. | FSK | Called | 10/27/21 | $22.01 | 4/14/22 | $23 | 13.58% |
| Xcel Energy Inc. | XEL | Called | 10/12/21 | $63.00 | 5/20/22 | $70 | 12.66% |
| Innovative Industrial Props. | IIPR | Sold | 3/23/22 | $196.31 | 7/20/22 | $93 | -51.23% |
| One Liberty Properties | OLP | Sold | 7/28/21 | $30.37 | 8/24/22 | $25 | -12.94% |
| ONEOK, Inc. | OKE | Called | 5/25/22 | $65.14 | 1/20/23 | $65 | 2.66% |
| Xcel Energy, Inc. | XEL | Called | 10/26/22 | $62.57 | 1/20/23 | $65 | 4.67% |
| Realty Income Corp. | O | Called | 9/28/22 | $60.37 | 2/17/23 | $63 | 5.41% |
| Medical Properties Trust | MPW | Sold | 1/24/23 | $13.22 | 3/21/23 | $8 | -38.00% |
| Brookfield Infrastructure Cp. | BIPC | Called | 11/9/22 | $42.43 | 7/21/23 | $45 | 8.72% |
| Star Bulk Carriers Corp. | SBLK | Sold | 6/1/22 | $33.30 | 8/8/23 | $18 | -31.38% |
| Visa Inc. | V | Called | 12/22/21 | $217.16 | 8/18/23 | $235 | 9.16% |
| Global Ship Lease, Inc. | GSL | Sold | 2/23/22 | $24.96 | 8/29/23 | $19 | -13.82% |
| ONEOK, Inc. | OKE | Called | 3/28/23 | $60.98 | 9/15/23 | $65 | 9.72% |
| Hess Corporation | HES | Called | 6/6/23 | $132.25 | 10/20/23 | $155 | 17.87% |
| Tractor Supply Company | TSCO | Sold | 9/26/23 | $203.03 | 11/28/23 | $200 | -1.02% |
| EXPIRED OPTIONS | |||||||
| Security | In/out money | Sell Date | Sell Price | Exp. Date | $ return | Total % Return | |
| IIPR Jul 17 $95 call | out-of money | 6/3/20 | $3.00 | 7/17/20 | $3.00 | 3.40% | |
| MO Jul 31 $42 call | out-of-money | 6/17/20 | $1.60 | 7/31/20 | $1.60 | 4.03% | |
| ABBV Sep 18 $100 call | out-of-money | 7/15/20 | $4.60 | 9/18/20 | $4.60 | 5.05% | |
| IIPR Sep 18 $100 call | in-the-money | 7/22/20 | $5.00 | 9/18/20 | $5.00 | 5.69% | |
| QCOM Sep 18 $95 call | in-the-money | 6/24/20 | $4.30 | 9/18/20 | $4.30 | 4.82% | |
| USB Sep 18 $37.50 call | in-the-money | 7/22/20 | $2.00 | 9/18/20 | $2.00 | 5.52% | |
| BIP Oct 16 $45 call | in-the-money | 9/2/20 | $1.95 | 10/16/20 | $1.95 | 4.65% | |
| SBUX Oct 16 $87.50 call | in-the-money | 10/16/20 | $3.30 | 10/16/20 | $3.30 | 4.00% | |
| V Nov 20 $200 call | in-the-money | 9/22/20 | $10.00 | 11/20/20 | $10.00 | 4.99% | |
| ABBV Dec 31 $100 call | in-the-money | 11/18/20 | $3.30 | 12/31/20 | $3.30 | 3.62% | |
| EPD Jan 15 $20 call | in-the-money | 11/23/20 | $0.80 | 1/15/21 | $0.80 | 4.41% | |
| MO Jan 15 $40 call | in-the-money | 11/25/20 | $1.90 | 1/15/21 | $1.90 | 4.79% | |
| USB Jan 15 $45 call | in-the-money | 11/25/20 | $2.00 | 1/15/21 | $2.00 | 4.48% | |
| BGS Feb 19 $27.50 call | in-the-money | 12/11/20 | $2.40 | 2/19/21 | $2.40 | 8.96% | |
| VLO Mar 26 $60 call | in-the-money | 2/10/21 | $6.50 | 3/26/21 | $6.50 | 12.10% | |
| CVX Apr 1 $95.50 call | in-the-money | 2/19/21 | $4.30 | 4/1/21 | $4.30 | 5.02% | |
| AGNC Jun 18 $17 call | out-of-money | 4/13/21 | $0.50 | 6/18/21 | $0.50 | 3.21% | |
| KKR Jun 18 $55 call | in-the-money | 4/28/21 | $3.00 | 6/18/21 | $3.00 | 6.25% | |
| USB Jun 16 $57.50 call | out-of-money | 4/28/21 | $2.80 | 6/18/21 | $2.80 | 5.24% | |
| DLR Jul 16 $155 call | in-the-money | 6/16/21 | $8.00 | 7/16/21 | $8.00 | 5.36% | |
| AGNC Aug 20 $17 call | out-of-money | 6/23/21 | $0.50 | 8/20/21 | $0.50 | 3.00% | |
| OKE Aug 20 $57.50 call | out-of-money | 6/23/21 | $3.50 | 8/20/21 | $3.50 | 6.67% | |
| NEE Sep 17 $80 call | in-the-money | 8/11/21 | $3.50 | 9/17/21 | $3.50 | 4.75% | |
| BIP Oct 15 $55 call | in-the-money | 9/01/21 | $2.00 | 10/15/21 | $2.00 | 3.95% | |
| USB Nov 19 $60 call | out-of-money | 9/24/21 | $2.30 | 11/19/21 | $2.30 | 4.30% | |
| OKE Nov 26 $65 call | out-of-money | 10/20/21 | $2.25 | 11/26/21 | $2.25 | 4.28% | |
| KKR Dec 17 $75 call | out-of-money | 10/26/21 | $3.50 | 12/17/21 | $3.50 | 5.42% | |
| QCOM Jan 21 $185 Call | out-of-money | 11/30/21 | $9.65 | 1/21/22 | $9.65 | 7.17% | |
| OLP Feb 18 $35 Call | out-of-money | 11/19/21 | $1.50 | 2/18/22 | $1.50 | 4.94% | |
| OKE Feb 18 $60 Call | in-the-money | 1/5/22 | $2.75 | 2/18/22 | $2.75 | 5.24% | |
| USB Feb 25 $61 call | out-of-money | 1/13/22 | $2.50 | 2/25/22 | $2.50 | 4.68% | |
| VLO Feb 25 $83 call | in-the-money | 1/18/22 | $4.20 | 2/25/22 | $4.20 | 6.13% | |
| EPD Apr 14th $24 call | in-the-money | 3/2/22 | $1.25 | 4/14/22 | $1.25 | 5.69% | |
| FSK Apr 14th $22.50 call | in-the-money | 3/10/22 | $0.90 | 4/14/22 | $0.90 | 4.09% | |
| XEL May 20th $70 call | in-the-money | 3/30/22 | $3.00 | 5/20/22 | $3.00 | 4.76% | |
| SBLK July 15th $134 call | out-of-money | 6/1/22 | $1.60 | 7/15/22 | $1.60 | 4.80% | |
| OKE Oct 21st $65 call | out-of-money | 8/24/22 | $3.40 | 10/21/22 | $3.40 | 5.22% | |
| OKE Jan 20th $65 call | In-the-money | 11/25/22 | $3.70 | 1/20/23 | $3.70 | 5.68% | |
| XEL Jan 20th $65 call | in-the-money | 11/25/22 | $5.00 | 1/20/23 | $5.00 | 7.99% | |
| O Feb 17th $62.50 call | in-the-money | 12/28/22 | $3.00 | 2/17/23 | $3.00 | 4.97% | |
| QCOM Sep 16th $145 call | out-of-money | 7/20/22 | $11.75 | 9/16/22 | $11.75 | 8.73% | |
| V Mar 17th $220 call | out-of-money | 1/24/23 | $12.00 | 3/17/23 | $12.00 | 5.51% | |
| OKE May 19th $65 call | out-of-money | 4/11/23 | $2.70 | 5/19/23 | $2.70 | 4.43% | |
| V Jun 2 $230 call | out-of-money | 4/21/23 | $10.50 | 6/2/23 | $10.50 | 4.82% | |
| BIPC $45 July 21st call | in-the-money | 5/23/23 | $3.25 | 7/21/23 | $3.25 | 7.66% | |
| V $235 Aug 18th call | in-the-money | 7/11/23 | $9.00 | 8/18/23 | $9.00 | 4.13% | |
| GSL $20 Aug 18th call | out-of-money | 7/11/23 | $1.25 | 8/18/23 | $1.25 | 5.00% | |
| OKE $65 Sep 15 call | in-the-money | 9/15/23 | $3.20 | 7/25/23 | $3.20 | 4.92% | |
| INTC $35 Oct 20th call | out-of-money | 9/8/23 | $3.78 | 10/20/23 | $3.78 | 9.41% | |
| HES $155 Oct 20th call | in-the-money | 9/8/23 | $9.00 | 10/20/23 | $9.00 | 6.81% | |