From the Desk of Bob Centrella, CFA:                                                  August 2, 2021
 "Forza 2021 Survey - Midyear (July) Update" 
Dear Friends:
I hope you are all having a great summer and you and families are healthy.  It's been interesting watching the Olympics.  Congrats to all the athletes competing and to those bringing home a medal.  I remember watching the Olympics since I was a kid and still it's exciting to watch although with the time difference I now know some of the results before.  Would be nice to be able to bet after knowing who wins first!  It's also strange watching without many fans, let's hope that this is not a harbinger of things to come.  

I've had a few requests for a survey update, so I did a midyear update of where we are with the 2021 Forza survey.  I meant to send it out a week or so ago but never got around to it.  So, I moved the data to July 31st to update things more currently and have attached the results.  (The first page shows the original survey results and page 2 shows the rankings so far.)  Needless to say, our combined market prediction is way below where stocks are right now.  Take a look and see where you stand.  Congrats so far to Dan S who is out to a big lead.  Dan, I owe you a beer when I see you at the Club.  Let's see how things turn out over the next 5 months and who will claim their bottle of vino and bragging rights for a year.

Regarding the markets, it's been a great year so far for stocks with the S&P 500 up 17%, oil up 52% and bitcoin up 42% although it has had some wild swings.  But we are entering a notoriously weak 2-month period for stocks and the market has been up 6 months in a row, the longest streak since September 2018.  The primary reason for the continuing climb in stocks I believe are strong corporate profits.  So far, 88% of companies have beaten earnings estimates and EPS growth is 85% from the depressed quarter a year ago.  This is well above the 63% growth rate expected coming into the quarter.  Also, estimates are rising for the coming Q3 and year-end.  Of course, the wildcard remains the spread of the Delta Covid variant.  In my midyear update I mentioned this as the single biggest risk to markets and still see it as such.  

A pause in the markets would not be surprising and would be a good thing to consolidate gains and catch our breath.  So far this year, we've only had a few negative periods with the highest "correction" only being 4%.  If we do get some profit-taking I do believe it will be short-term and would be a decent buying opportunity all things being the same.  Let's see what the next few months bring as there is still a lot of cash on the sidelines waiting to be invested. Although Aug and Sept are seasonally weak months for stocks, the ability of investors to work from home may change that.  In the past, investors would go on vacation and close their books until they came back to the office in September. Often, selling had no buying to offset it.  Now, that might not be as much of an issue.  This will be an interesting 2 months.  A few other wildcards include an infrastructure spending bill and the fate of any capital gains or tax increases as the year progresses.  
I'll leave it there, enjoy the rest of the summer and stay safe!


From the Desk of Bob Centrella, CFA:                           January 13, 2021                                    

 Dear Friends:

The year is off to an interesting start as the market is making some new highs, we are about to install a new President and yes, impeaching the other one again.  Football season is over for me as my Steelers laid a gigantic egg in choking, er, losing to the Browns on Sunday in an embarrassing game for them.  Also, congrats to the Crimson Tide of Alabama for yet another NCAA football championship. Kinda getting tired of seeing the same 4 or 5 teams every year in the playoffs.  But I'll give them credit for consistency.  

Yes, the results of the 9th annual Forza Investment Survey are official and we have a winner in what was a really close contest.  So close that I am going to award a bottle to the top 3 finishers.  Congratulations again (ugh) go to my brother Roy for edging out Sam DellaFera by 1 point!.  Since it was so close and my methodology, although sound, is not bullet-proof, you both can expect a bottle from Forza.  Well done.  I'm also awarding a bottle to the 3rd place finisher who was only 3 points back -- oh wait, that's me 😂.  I seem to never be able to get over the hurdle to win but speaking about consistency for the college football teams, I will take a bottle from myself for consistent finishes over the years.  And I believe Roy becomes the first 3-time winner.  Luckily, I will be drinking his wine with him when he visits!  I still owe last year's winner a bottle and he came in 4th this year.  (John L, I'll get it to you for sure at the golf course.)  Btw, the top 4 finishers were Italian!!  Just saying...

Congratulations and thanks to all for participating.  The new 2021 survey will be out shortly.

Given the craziness in the year, we can now look back and see how we all forecasted. Once again, the conclusion in looking at our results is that this is not easy stuff, even for those of us that do this for a living!  You can look at the results to see where you finished in the attachment but a few highlights are: 

1.  Who would have "thunk" that this would be a record year for stocks when we were sitting down -35% in March?  But here we are.  Our median prediction was to finish at 30,417 for the Dow and we were pretty close but 200 points short.  For the S&P 500 the median was 3,498 vs 3,756 -- not too close.  Congrats to my daughter Anna who forecasted 3,748.  It must be in the bloodlines!   
2.  In terms of a stock correction, 14 of the 21 respondents were looking for a correction of at least 10% and it certainly did happen. 
3.  Oil declined sharply due to Covid and finished the year down 20% although it too was much worse at the bottom.  Sam D was closest at $50/barrel but our median price was forecasted at $63.44. 
4.  Gold rose almost 25% to $1893.  This was on top of a 18% rise last year. Gold was a safe haven for investors.
5.  The 10-year UST declined as low as about .25% during the year but rose as the market rebounded and finished the year at .96%, down from 1.92% at the beginning of the year.  Nobody was very close as my prediction of 1.70% was closest.  Our average forecast was 2%.  
6.  Unemployment skyrocketed in 2020 after starting the year at 3.5%.  It finished the year at 6.7%, much better than the peak at 14.7% in April.  GDP growth is likely to finish the year at around -3.5% after a 31% decline in Q2 and a 33% increase in Q3.  Talk about a rollercoaster year.  Needless to say, nobody was very close to those statistics.     
7.  Bitcoin, ridiculously rose from $7,194 to $29,290.  Nobody was close there either as my guess of $13K was closest.  Our average for the group was around $8K.  And it hit $40K earlier this week before pulling back somewhat.  I'm looking forward to see what the forecast is on our next survey.  
8.  Finally, only 2 out of 21 thought that a Democrat would win the presidency!  I think I mentioned last year that the contrary indicator would suggest a Democrat would win.  And for the Bonus question, 15 out of 21 thought Biden would be the Dem nominee.    

The results are attached to this email. The first page gives all our answers and the second page lists the final rankings. Take a look and see how you did.  Then consider what to forecast in 2021.  I'll get that out in a few days.  

Have a great 2021!  Has to be better than 2020.    
If you have any questions or want to talk feel free to send an email.

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Bob Centrella, CFA
Managing Partner
Forza Investment Advisory, LLC







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