By almost any measure, the U.S. stock market was filled with surprises in the past year.
Few strategists, analysts, commentators and "talking heads" predicted many of the actual outcomes.
2019 ended in an entirely dissimilar manner compared to the way that 2018 ended. (As an example the CNN Fear & Greed Index was under 10 a year ago, its at 90 this week).
Despite a continued manufacturing recession, ongoing weakness in many global economies, political discord (and a Presidential impeachment), little resolution of the U.S./China trade differences and a flat year for S&P profits - valuations exploded (from 14.5x to nearly 19x) as confidence in an extended domestic economic recovery was heightened.
* Interest rates, expected to rise by most at the year's beginning, did the opposite as global growth was sluggish, inflation was quiescent and monetary authorities continued their largesse.
* Bank stocks, the object of my affection, were supposed to fare poorly as interest rates fell - but that was not the case as most of the large money center bank shares rose well in excess of the S&P Index's advance.
* Despite extreme confidence in view from the ursine crowd (and an expanding short position), Elon Musk made it through as his company (Tesla (TSLA) ) and its share price prospered in 2019.
* Facebook (FB) and Goldman Sachs (GS) (my two favorite large cap stocks as we entered 2019) were hated at the beginning of the year but ended the year with superior investment returns. (Now everyone loves 'em!)
* Social media stocks mostly prospered despite bona fide privacy concerns voiced by regulatory authorities and government officials.
* Gold provided its best return in nine years as a late 2018 reversal (from tightening to ease) in U.S. monetary policy coupled with continued easing around the world provided a uniformly and synchronized worldwide expansion in money growth, credit and liquidity.
* Passive investing again beat active investing and the dominance of ETFs and quant strategies (that worship at the alter of price momentum) continued unabated.
As we move into 2020 the one reining condition is that commentators, traders and investors (as they were as we entered 2019) are confident in view!
The key issues for our markets, the domestic economy, societal (the widening wealth and income gap) and U.S. politics contain the possibility of multiple outcomes.
I suspect that the surprises that we encounter in the upcoming year will be no less remarkable than 2019's multiple surprises. (Our 15 Surprises for 2020 will be out shortly)!
Perhaps the biggest personal surprise for me is, that having started writing for TheStreet in 1997 (nearly 23 years ago!), I am still writing my Diary in the box to the left of Jim " El Capitan" Cramer!!
Bottom Line
2020 will likely present a host of different and (likely) more formidable challenges for investors and traders than were confronted in 2019.
That was the year that was, it's over, let it go.
(Facebook and Goldman Sachs are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells FB or GS? Learn more now.)
(This commentary originally appeared on Real Money Pro on Dec. 31. Click here to learn about this dynamic market information service for active traders and to receive Doug Kass's Daily Diary and columns from Paul Price, Bret Jensen and others.)
