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A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Educational Segment. Birth rates have gone down due to covid. Aging demographic and all the debt in the world will also be a headwind for growth. The demographics continues to suggests that the world will continue to have growth problems. There will be a lot of challenges in aging countries like Italy, especially with their poor fiscal situation. Today, 2/3 of the world's population lives in Asia. In the next century, Africa will see the most growth. The growth area will be emerging markets. There is an ETF for Nigeria, NGE, which is quite interesting.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Market. We moved into the re-flation trade. There are adjustments in long interest rates and a bond rally. The discount rates for large cap tech growth names has changed and they will suffer. When they don’t pay any yield it offers a challenging environment. There are other sectors where you have seen that change in leadership. The question is if the inflation we are experiencing is transient or permanent. Grains and energies are increasing in costs. Energy has been on fire the last six months. It does not look like we are going to have a bear market. You may want to increase your exposure to the inflationary trade. It won't be permanent because deflationary forces will always be present. Q3/Q4 we will get more insight into this.
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Considering the current market and inflationary pressure, an allocation in Materials is fine. A benchmark allocation should be around 10%. The sector is looking fine these days. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Since September, the value trade is where the growth will be coming from. As earnings are getting brighter, lots of these names are getting cheaper so you can continue to hold them. Trimmed tech stocks but with spiking yields, FANG names are getting a little cheaper with the bond levitation.
Greg NewmanUnknown
COMMENT
The work-from-home names like Zoom and Pelaton, be careful of them. They may do well in the near-term but they need some consolidation to happen. The market was carried away by the few, and now it is broadening out.
Greg NewmanUnknown
RISKY
Bitcoin. An asset class that drives people nuts. It could go up a lot from here and establish itself, or it could drop down. There is a fear of missing out however. It is looking like it will become an established asset class. You need insurance just in case it keeps going up. Decide upfront how much you want to own, and buy in stages. He would buy it and put it away. Own in a taxable account since it is binary.
Greg NewmanOwned
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Key market indicators are increasing. Interest rates and earnings are going up and this could be beneficial for sectors like oil. However, investors should have a three year time horizon and should not pre-guess sector shifts. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Is the tech rally over? The best days are behind tech. Don't buy growth in a rising-rate environment. But human nature only buys what it knows. So if you know only Salesforce, you'll buy back into it, like rushing back into a burning house to get burned again and again. The Russell, industrials and chemical names will continue to outperform.
COMMENT
Pent-up demand and value tech names Apple, Microsoft and Google are value plays within tech and will get hit the least among tech names during this rotation into cyclicals. Nobody has any clue what this pent-up demand will be--how big?--because we've never come out of a pandemic. But he expects it will be bigger than many expects, like people taking vacations they never even considered. Hes already sees stores, sidewalks, highways crowded (legally), so he expects there will be huge demand. Also, cycicals and value have underperformed for the last 15 years. He expects the US economy will blow through the roof, which will trip over itself.
COMMENT
COMMENT
Tech stocks during this rotation Tech names are tradable now but only in the very short term: Facebook, Amazon, Apple, Spotify and Nvidia are at longer-term technical support and that's good. Last week, only 20% of big tech was trading above their 50-day moving average, usually meaning a tradable low signal. Bond sentiment is turning bearish, so rates could trade sideways for a bit, so you can play this oversold condition in tech tech trade. However, cyclicals will rule the day longer term especially in the summer with inflation fears.
COMMENT
Is the tech trade over? The play isn't going all in cyclicals, so tech is still alive. Tech won't outperform during historically low rates as it did in 2020, huge returns won't repeat. Don't throw the baby out with the bathwater. That said, certain tech will perform--Facebook, Apple and Google are trading at high-20s PEs compared to Crowdstrike at 200-300x. Two subsets here. You can't say all tech is untradable. For example, Microsoft still holds value. Look for solid balance sheets and sustainable growth.
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