Intrinsic Value System

Intrinsic Value System

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Intrinsic Value System
Intrinsic Value System
11/30 Daily Market Note: Sector Rotation and Volatility Are Likely to return in December

11/30 Daily Market Note: Sector Rotation and Volatility Are Likely to return in December

11/30 Premium Strategy Note - Sector Rotation is Coming

Larry Cheung, CFA
Nov 30, 2023
∙ Paid
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Intrinsic Value System
Intrinsic Value System
11/30 Daily Market Note: Sector Rotation and Volatility Are Likely to return in December
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Powerful Quote: Never interrupt your enemy while he is making a mistake.

- Sun Tzu (God of War)

Hey Folks - 

One of our recently guided positions from 41-42 on Kroger (KR) reached the high end of our 44-45 target intraday after their earnings outcome today. This idea was a nice 3.5% gain with a holding period of less than 2 weeks. This is precisely my signature Direct Shares strategy of conservative 2-4% targets where an entry in good companies with good valuation at swing lows essentially provides contained-risk/decent probability opportunities to find alpha on top of a proven S&P 500 strategy.

Kroger is a mid-cap(ish) type of company, and these are the types of opportunities I constantly look out for. Besides being a macro analyst, my equity research background will do its best to screen out companies that meet this criteria when/if they are available. Many stocks in the S&P 500 are negative YTD, but with the right expectations and methodology, I believe we can in fact find profits in a stock that has been red in 2023. 

11/20 Strategy Note: On Kroger when it traded 41-42

Obviously at swing highs here, these setups are becoming much harder to find. However this will not prevent me from attempting to find alpha with creative ways (see below). Much of the opportunity that will be setting up in markets in December 2023 and calendar year 2024 may not necessarily be in the Magnificent 7 or Semiconductors as those names have run up substantially this year already.

Context

In terms of macro today, the main highlight for today is that PCE inflation rate came in at expectations. My inter-market analysis suggests that we will soon go through sector rotation which I will discuss below. While the main indices has stayed stable (for now), turbulence underneath the hood will start making its way back to the index level.

Ideas/Strategies/Outlook below…

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