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Just a note about equaling long term decline and share trading even investing:
In recent years American tobacco companies make a killing..pun intended...well above general index growths..yet not exactly a booming sector is it?
So we just need to be careful, if negative interest rates and yield search are so important, between a solid profit making industry or a Zoom like pie in the sky but increasing losses company.. not always that obvious a choice.
And then there is Tesla
If this helps on EMQQ stocks, i recognised most of these from China.try to get a geographical breakdown but i suspect it is heavily China weighted..Now on the thread 'Economic Implications', I haven't seen an awful lot on what to buy as a consequence of COVID. Tech has outperformed and the usual names never really got that cheap and when they bounced, simply ran away. Now I am not really a tech chap so my vision is pretty limited in this space.
Ecommerce would seem (in America/Europe/China) to be a solid choice going forward:
For years, investors bid up tech stocks on the idea that digital transformation was inevitable. The Covid-19 crisis has proved them right. “We have seen two years’ worth of digital transformation in two months,” Microsoft CEO Satya Nadella recently told investors.
“I’ve been following tech for 41 years, and this is the second most expensive tech market I’ve ever seen”—second only to the internet bubble 20 years ago, says Fred Hickey, editor of the High Tech Strategist, a monthly newsletter. Hickey has long been skeptical of tech valuations, but this time the fundamentals are on his side. The Nasdaq Composite currently trades at 3.4 times forward sales, well above a 10-year average of 2.3, according to FactSet.
Ted Mortonson, technology strategist at Baird, the Milwaukee-based investment firm, says there are good reasons for elevated valuations. He says that we’re in “the most powerful integrated technology growth cycle since the late 1990s,” pointing to the acceleration of cloud computing, e-commerce, and telehealth, and the arrival of fifth-generation, or 5G, wireless and new chips. It all adds up to big growth potential at a time when there’s limited growth in other industries. Growth investors have bought tech stocks, he says, because they’ve had few other choices.
The following were identified as 'Cheap Tech':
View attachment 105065
Doesn't really appeal to me, basically because I don't want to buy 10 names and monitor them all and second, they are not (to me anyway) seemingly direct Ecommerce based stocks like AMZN, BABA, etc.
Here however is an interesting ETF.
View attachment 105067
Which holds:
View attachment 105066
Now most of those names are a complete mystery. They are located all over the world. So certainly diversified.
Unfortunately I missed this at the really opportune time, mostly because there are so many ETFs now that actually keeping track of them all is almost a job in itself.
Currently I am undecided whether just to buy and close my eyes (working out well for tech/a and TSLA) or wait for some sort of pullback.
This is clearly one one of those psychological issues that are being discussed on the 'Dump It' thread. The internal dialogue would go something like this:
If I buy it now, it will drop 50% because s*** like that always happens to me. If I don't buy it now, it won't pullback and it will run 300% and I'll have to pay or stay out.
Now I hate, HATE chasing stocks. I refused to chase AMZN, GOOG, and I liked those stocks at IPO because I use them all of the time. I never did buy them. Look where they are now.
So clearly that strategy failed. I need a strategy that will allow the purchase. Therefore if I buy today (Monday) I need to prepare for a pullback to whatever. On that pullback, I increase my position. I can average down with the best of them, red ink just doesn't bother me in the short term. I won't do it with individual stocks, because they may go down and never return. With an ETF that is still possible, but less likely. Therefore I can live with it (the risk).
The general thesis is (in case you missed it) that Ecommerce (post COVID, but not because of COVID) this space will grow worldwide, catching up the leaders (AMZN) in their own markets.
So I will add on Monday.
jog on
duc
If this helps on EMQQ stocks, i recognised most of these from China.try to get a geographical breakdown but i suspect it is heavily China weighted..
Do not mean it is a good or bad thing, just many names i recognise from there but not common in the west...yet
So you missed the bottom. You missed the bounce. You are not happy. All is not lost. The 'small' banks have not really joined the main show. They will at some point. I'll be opening a position in the AM.
View attachment 105001
View attachment 105000
DPST is the x3 leverage of the small banking sector (KRE). It pays an 8% dividend (hence my interest in bank dividends) which may or may not be 'safe'.
View attachment 105003
The train has not left the station. Last whistle sounding.
jog on
duc
G'day Duc,
Was wondering about this chart.
Can you, or someone else, please explain it to me in simpletons form?
It's all way out of my league.
If the dark blue is swaps USD with AUD, what's the big drop about on the last bar?
What relevance, if any, does this have for AU markets?
Not sure what the BOE represents either.
Cheers.
F.Rock
Edit, is BOE the Bank of England ?
I appreciate your effort on the market analysis; however I am sitting this out. Not buying into this rally.
Bit off-topic,here.That Peter Lynch book was first sold in Oz,way back in the Bank Card era.He had a lot to say about the way banks ripped off their clients with credit cards and I remember thinking,well that'll never catch on here.We aussies are way too smart to fall for that bank rip-off.How time change.....Why would I want to buy the Banks? (Which I opened today via DPST).
Credit Spreads.
View attachment 105010
We had the same issues in 2008/09. Well if you look at the chart, the spreads blew out even more. As they came back into alignment, so the stockmarket started its inexorable rise.
The COVID crisis had not really impacted actual NPLs to progress to blow-ups on the scale that occurred in 2008. This is because the Fed. jumped in from Day 1.
One area or sector of the market where credit issues are extremely important are the Banks. Not so much the big chaps, they have always been recipients of bailouts, but the little chaps. No bull market will proceed without an intact and functioning financial system, which means the banking system.
Now banking is the most opaque set of financials you will ever have the misfortune to read through, if you bother reading the financials. Even then, 9/10 you still won't have the true picture. Trying to read your way through hundreds of banking financials is simply not possible for anyone other than an analyst working full time on nothing but the banking sector. Even then, hardly worth the effort as there are no superstars like TSLA in there. Banking is a low margin business.
As a group however, they can offer solid returns + dividends. If you have ever read 'One up on Wall St.' by Peter Lynch and his second book, you'll know he loved the banking sector. He bought them wholesale. So the ETF KRE holds:
View attachment 105012
Notice the tiny %. The largest is 4%+/-. Nothing in this is in a blowup going to hurt you. You get hurt if the whole sector blowsup. Now that the Fed. is backstopping them also, we know that that is not going to happen.
As stated, banks are not a TSLA. They are not going to excite you overmuch. So we have DPST. The x3 ETF of KRE. Now a second advantage of DPST is that we also have the inverse which is WDRW. Now, if we so choose, when we rebalance into a drawdown, we can choose to add some juice and go short.
So last week we ended with a plunge in the market. We had a few doom and gloomers make prognostications that COVID was back, blah, blah. The week opened and we moved higher and have had some red days, some wobbles and the market would seem to the casual observer to be uncertain. There is lots of news: AAPL closing (re-closing) stores, take your pick, there are negative news stories everywhere.
We had yesterday news around 'Witching day Options Expiry'. If you are looking for bad news to confirm your belief that the market is going to crash, you will find it. You can argue that what I post is also 'news': which of course it is. The test is: what news is noise, what news is signal for markets.
Looking at the internals:
View attachment 105011
The market is solid. There are some rotations. There are sectors that are red hot (Tech) and are just taking a breather and there are sectors that are lagging behind, but are now potentially ready to make a move in support of the overall market. This is not news. This is fact. Can it change? In a heartbeat. When it changes is when we bail out.
There are going to be a couple of technical hurdles: (a) the previous high and (b) the all time high (for SPY, the QQQ are already through just their new all time high). To break through is a function of all sectors contributing to the move. Most are ready to move. Energy is a notable exception, but they will likely join later in the year as the issues work themselves out.
jog on
duc
I ask because we haven't seen the bounce that you predicted today and we've seen a flat nasdaq and declining djia & sp500 for just over a fortnight now, exactly as I predicted:
I'm going to see if I can find some data tracking virus numbers to mortgage delinquencies. If I can't then I'll throw it together myself then post it in here.
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