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A Comment -- General Comments From an Expert (A Commentary)
COMMENT
Educational Segment. Looking at moving averages and market breadth. It's important to look at how many stocks are participating in the rally. Market breadth is telling us what the current quality is like. Looking at the moving averages within the S&P 500, we are seeing a pullback coming soon. However, when is the important question. We are seeing market breadth lessening and so this indicates retracement. This week, if the S&P 500 does not close above the 50 day moving average, then it will be closer to the 200 day average. Don't chase the bounce today.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. 5i doubts there will be a big crash soon. There is always a possibility of a correction. However, in general, corporate earnings are fine, interest rates remain low and the world is awash in cash right now. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
Risk vs. reward during Covid short-selling craze: does this mean a new risk to markets? Ask, is it systemic risk or any other risk? He isn't worried; we can handle with this rationally.... Semiconductor shortage: he had no idea it was coming. A buy during volatile times....Other opportunities lie in tech like Facebook and Etsy...The reopening trade: Disney and Boeing. The latter didn't go down despite a bad quarter....Other bullish themes during volatility: cybersecurity, 5G (Qualcomm), China (don't play it through commodities, but buy Apple, Nike), healthcare (Eli Lilly, Teledoc), e-cars (GM on weakness), housing (Home Depot), clean energy (Plug).
COMMENT
Market outlook. The vaccines are coming slower than we would like. It is a persistent virus but it is a natural event. In terms of the Reddit frenzy, we have seen this before but not to the same extent. He got lucky and sold into this rally for BB. Robinhood had to suspend to ensure solvency. Buyer beware when the market itself is threatened.
Greg NewmanUnknown
COMMENT
Robinhood. People are engaged now and after 2008, there was virtually no retail investors. They are slowly coming back, and more liquidity is a good thing. Democratization of ideas is also a good thing. The market mechanism is to find truth. Stories can persist for a while but it will reflect the truth eventually. Hopefully people won't be burnt too badly.
Greg NewmanUnknown
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A bear market is definitely coming but it’s hard to say when. It is a natural part of markets. A crash is not expected, but a market correction is normal. The short squeeze is not healthy but it is only a small sub-section of the market. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
What's trends are catching your eye? Condo market is quite different than publicly traded real estate. CAR, for example, is focused on the upper tier suburban market that isn't competing with condo rents. Condo rents are being affected by a shutdown in population growth. Return of immigration and foreign students will make a big difference to the condo market downtown. In the meantime, apartment REITs such as CAR are well positioned.
COMMENT
What about retail trends? Retail properties need to reinvent themselves, and this will take a lot of capital. First quarter will be choppy. More store closures than last year. He's staying away from retail. Winners continue to be logistics and industrial warehouse real estate. There's growth there. Consumer hasn't stopped shopping; they're just shopping differently.
COMMENT
The current mega short squeeze (i.e. Gamestop): this could mean the tail end of a bubble market, though not in every area of the current market. Also, people have money to spend these days, so these buy stocks in apps like Robinhood. The retail investor used to buy ETFs, but now they buy specific stocks, which worries regulators and institutions. There's no clarity in terms of regulation about Reddit (which is the origin of this short squeeze).
COMMENT
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. In regards to the short squeeze on Gamestop, the failure of a couple hedge funds is not going to bring down the whole market. The weakness is popular stocks is fairly short lived. The situation does not change economic fundamentals asides from increased volatility short term. Unlock Premium - Try 5i Free
Stockchase InsightsUnknown
COMMENT
The short squeeze propelling Gamestop and Blackberry There are many similarities to the dotcom bubble. We have seen this movie before. But it's rich that these hedge funds are calling foul on chat groups beating them on their own game. That said, these stocks are speculative, not investments. He invests. Gamestop and BB don't have net income, so this is blue-sky. However, he has a soft spot for people sticking it the hedge funds.
COMMENT
We can never know with certainty what might pop the bubble. If you look back 20 years, and the excess in the dot com bubble, we see similar things. While all good, there are evidences that point to a bubble. Few people recognize it as so however. You never know when it will pop.
Larry Berman CFA, CMT, CTAUnknown
COMMENT
Are ETFs prices valued by their underlying stock values or what investors are willing to pay for the ETF. Futures are some times open during holidays so that is why the S&P500 ETF trading on the TSX gained during the US holiday. In general, ETFs trade very tightly to underlying stocks. There could be slight premiums from time to time.
Larry Berman CFA, CMT, CTAUnknown
N/A
Educational Segment. Credit market risk. There is a gross mispricing of credit market risk. Due to implied fiscal and monetary stimulus, the weaker companies who would not be able to make interest payments are able to get money with a tight credit spread. We see a deterioration in credit spreads before the stock markets turn down. There is a divergence where the stock market makes new highs, but there is less tightness in the credit market. We are starting to see this. It is not signalling a sell yet, but it is cautionary.
Larry Berman CFA, CMT, CTAUnknown
N/A
Market. He is watching BB-T very carefully which is a large position for him. He sold his entire position today. The only explanation for the climb he can see is a short squeeze. Some insiders sold some stock last week. He thinks there are momentum, computer driven strategies that were at play this week. His approach to the market right now is that it is a stock picker's market right now. He is a value investor and was careful about portfolio construction. He has not made many changes to his portfolio other than trimming and is now sitting on about 12% cash.
Stephen Takacsy, B. Eng, MBAUnknown
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