Crosscurrents and the market environment

What I am doing

It's been a while since my last email.

The market has been a roller coaster and especially growth stocks, my favorite style, have been crushed by the market.

Image: the NASDAQ last 12 months and 10 and 30 weeks moving averages. Still a bearish outlook.

Now, I invest for the very long term and so in the long term companies with high growth and earnings engines win.

That does not mean there is not a lesson for me in what happened over the last several months.

Beyond my "forever-never touch" POTS, I do have a personal portfolio where I am a bit more active, not much though. In there, I experienced 3x-4x gains… only to see many of them become 0 gains at some point! And that does not make sense.

I have been reading Stan Weinstein stage analysis, a simple method that can help long term investors like me with better timing: when to enter or exit a position.

I believe my fundamental analysis coupled with a bit of technical / trend analysis can help me manage risk better and.. in taking profits when the odds or the trend starts changing direction!

The Current Market

The US economy was getting out of the pandemic with a roar with the only concern being inflation. Then the war in Ukraine arrived creating a supply-side shock, exacerbating the inflation concerns and the reaction from the Federal Reserve.

Long story short: as nobody knows when the inflation will peak and then how far the FED will need to increase rates... institutional money will stay away from high growth companies.

These growth companies' valuations are attached to the cost of capital. So tomorrow's cash flows, which are used for the valuation of growth companies, are worth less and less as interest rates go up. For that reason, many growth names are down anything between -30% and -80% from their highs!

Unfortunately, further downside may still happen until inflation will show signs of slowing down, which some economists are predicting.

At that point growth names will take off again, most likely. But we don’t know when.

MY STRATEGY

My strategy has not changed. I want to keep investing in innovative, growing/expanding companies for the long run. Putting a bit of money in the market consistently is the best strategy.

Right now not many of the stocks in the portfolio are looking ready for a leg up, most of them are consolidating and some more weeks may be needed before getting ready to soar again.

BTW in the 10X CAPITAL FREE POT [link] $ABNB, $BROS, and $SWAV are the best buys right now. I'm adding today to $SWAV only BTW as I added to the other two not long ago.

I'll be writing a separate email for paid subscribers about the 2 names that are investable right now from the 10X SMALL BETS POT

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Important:

this is not investment advice. Consult a licensed financial advisor before making any investment decision.