Year End Letter 2023
December 30, 2023
We are deeply grateful for the the trust and confidence clients have placed in Jackson Square Capital. This coming March will mark our five-year anniversary since we launched Jackson Square Capital (JSC) with our clients’ best interests in mind. Broker-dealers that exist inside US and European banks operate out of self-interest and our decision to start JSC was based on a desire to leave that conflict of interest behind. JSC is an SEC-registered Investment Advisor and fiduciary, which means we act on your behalf and for your benefit only. Thankfully, you’ve recognized the value of our commitment with discretionary Assets Under Management more than doubling and new client relationships up 74% since we launched in 2019. Most of those new client relationships were referrals from existing clients, for which we’re extremely grateful.
I started my career in 1984 and met my business mentor in 1989 while working at Donaldson Lufkin and Jenrette in San Francisco. He taught me the way to make people money was to become a lifelong student of markets. I soon realized that the best way to become a ‘lifelong student of markets’ was to write about it every day. Writing daily has taught me to look for the subtle directional clues that exist inside and across markets. It’s all in the aptly titled newsletter ‘Inside Markets.’
The prevailing year-ahead narrative includes still solid economic growth, falling bond yields and monetary easing – all bullish factors for equity markets. As a result, we’ll be starting calendar 2024 with equity markets in overbought territory and bond markets priced for 150bp of rate cuts into year-end. These conditions are almost the direct opposite of how we started 2023, a calendar year that produced a ~25% return for the S&P 500. It’s safe to assume that the prevailing narrative will be challenged at some point in the new year and that equity markets will at least trace back to oversold territory. It’s also possible that the prevailing narrative is completely wrong and for equity markets to produce negative returns in 2024. While there are currently no directional clues to suggest a bearish outcome next year, it’s our intention to find them if, and when they develop.
As a lifelong student of markets, I’d like to wish everyone a happy, healthy, and prosperous New Year.
– Andrew