A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A downtick in inflation numbers would set off a powerful rally in growth stocks. When investors see inflation as having peaked. A solution in Ukraine would also help. If there is a recession, this will also help growth stocks since it would be more valuable in a slow-growth world. Unlock Premium - Try 5i Free
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COMMENT
CRYPTO UPDATE The cryptocurrency market, for some time has still not found a direction.
Using Bitcoin as a benchmark, we can clearly see that the asset has been in a triangle of indecision since the middle of January.
On the fundamental level, apart from another reversal of position by Russia and India on the status of crypto-currencies, we can note the decision of the Ukrainian government to strengthen the right of protection to the owners of cryptos by legalizing more digital assets.
COMMENT
Tech sector. There have been some powerful changes in the market, especially in the NASDAQ 100. It reached the same valuation peak from October to early January that it did in the year 2000, and has now stepped back. This is the first leg down of that index. Some stocks like PTON have been massacred, as they don't have much earnings support. These stocks are still not cheap, and have miles to go before they're finished. SHOP and some of the FANGs are also on their way lower. Modestly decent fundamentals have held up so far. If all this reminds you of the height of the dot-com boom, it should.
COMMENT
Portfolio positioning. As in 2000, value stocks and gold have held their ground. Economy didn't implode then, and it doesn't appear to be imploding now. He has no overall sell signal for the general market, and he's in no panic to become defensive unless you still hold the NASDAQ stocks. If you do, switch to any areas of value. End of pandemic should open the NA economies to a great degree and encourage the overall market to stay the course, at least for now. TSX is far, far better value than the S&P or NASDAQ, and he'd focus his portfolio there.
COMMENT
Differences from year 2000? If you can find differences, good on you. Only the names have been changed to protect the guilty. Same excessive valuations have begun to correct. Switch from those high valuation, no sales, no earnings stocks and into value. Value held quite nicely for all of the 2000s. We can see a crash again on the NASDAQ stocks. The lion's share of those are still excessively valued. For the NASDAQ to just get back to FMV (not even cheap), it would have to fall almost 40%.
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- Palantir Technologies (PLTR-N)
- Roku Inc (ROKU-Q)
- Fastly Inc (FSLY-N)
- Trane Technologies (TT-N)
- KKR & Co. LP (KKR-N)
- Roblox Corporation (RBLX-N)
- Meta Platforms Inc (FB-Q)
- AMC Entertainment Holdings Inc (AMC-N)
- Invesco QQQ Trust, Series 1 (QQQ-Q)
- Alibaba Group Holding (BABA-N)
- Microsoft Corporation (MSFT-Q)
- Apple (AAPL-Q)
- Nvidia Corp (NVDA-Q)
- AT&T (T-N)
- Tesla Motors Inc (TSLA-Q)
COMMENT
Inflation. Has knocked markets back considerably. The Fed has done an abrupt u-turn on interest rate hikes and trimming the balance sheet. Caught the market off guard. Every day, the inflation numbers seem to get worse. Fed is under pressure to act. It probably put too much capital into the system, and now it has to reverse course.
COMMENT
Bright lights for investors. Three positives. GDP performance has been very strong in US and Canada. Unemployment has been strong for both countries. Reverse purchase agreements on the Fed balance sheet, used to prevent interest rates going below zero, could be unwound to easily trim the balance sheet.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. If there is a move in Eastern Europe by the Russians, the least impacted sectors would be aerospace, defence and cybersecurity. Highly cyclical, commodities, consumer discretionary and high-growth tech names could be affected the most. Unlock Premium - Try 5i Free
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