Patient Capital Management is a Baltimore asset manager founded in 2020 by Samantha McLemore, CFA — Bill Miller's long-time co-manager (working together since 2002, running the flagship Opportunity Equity strategy since 2014). Continuing the Miller-school contrarian tradition, it practices "time arbitrage": exploiting behavioral mispricing to concentrate in controversial growth names (tech, healthcare, Bitcoin-related) at deep discounts to intrinsic value. Its site preserves Bill Miller's complete 1995-2022 market letters, alongside ongoing quarterly letters and webinars.
This report reviews how brutal 2022 was for investors: it was one of the worst years for stocks in nearly a century, and bonds also crashed—breaking the old rule that mixing stocks and bonds keeps you safe. The only winners were commodities like oil and food. Many high-growth tech stocks (the darlings of 2020) lost over 80% of their value. The key takeaway for regular investors: the playbook has changed. Cheap 'value' stocks beat expensive 'growth' ones, and medium-sized companies did better than big ones. Worth reading because it shows why 2023 might stay rocky.
This report reviews market performance in 2022, noting that the S&P 500 posted a price return decline of 19.4%, marking the seventh worst year since 1926, primarily driven by the highest inflation since the 1980s, the most aggressive rate-hiking cycle in 40 years, the Ukraine war, and China's COVID
This chapter reviews the extreme performance of global financial markets in 2022, set against the backdrop of the highest inflation since the 1980s, the most aggressive rate-hiking cycle in 40 years, the Ukraine war, and China's COVID lockdowns. The report notes that despite cooling inflation and an inverted yield curve, with widespread expectations of a recession in the second half of 2023, the US unemployment rate remains as low as 3.5%.
The author's key judgment is that 2022 was the seventh-worst year for stocks since 1926 and the worst year for a 60/40 stock-bond portfolio since 1937. Counterintuitive points include: bonds were no longer a safe asset (2022 marked only the fifth time since 1926 that both stocks and bonds fell, and the first time both declined by over 10%); commodities emerged as the clear winners; the high-growth stock bubble burst, with many 2020 market darlings falling over 80%. Investor sentiment remains in bear market territory, with the Bank of America Bull & Bear Indicator at just 2.9 (out of 10).
Comparative Data Table: 2022 Total Returns by Major Asset Class
| Asset/Index | 2022 Full-Year Return | Q4 Return |
|---|---|---|
| Nasdaq Composite | -32.5% | -0.8% |
| S&P 500 Index | -18.1% | +7.6% |
| Dow Jones Industrial Average | -6.9% | +16.0% |
| Russell 1000 Value Index | -7.6% | +12.4% |
| Russell 1000 Growth Index | -29.1% | +2.2% |
| Barclays Long-Term Treasury Index | -29.5% | -1.1% |
| Barclays US Aggregate Bond Index | -13.0% | +1.9% |
| Bloomberg Commodity Index | +13.8% | Not Provided |
| US Dollar Index | +8.2% | -7.7% |
| Gold | -1.0% | +8.4% |
| Crude Oil | +6.7% | +1.0% |
| Bitcoin | Not Provided | -14.7% |