2 Powerful Camps are being formed: Ultimately, only 1 will prevail in the Long-Term.
Press the like ❤️ button if you plan to resist the calls of Sirens from Greek Mythology and stay on the right side of markets (see below)
In greek literature, a Siren is an evil creature who is depicted as a beautiful mermaid until the unknowing target realizes it’s too late.
Exclusive Research Content (Link Below): To celebrate our July research opinions materializing of the S&P 500 re-entering the range of 4000-4200 based on short covering, Semiconductors staging a powerful rally, and our opinion that China’s risk/reward had faded, I am releasing another exclusive piece of content: my playbook from this very recent past FAAMG earnings season so that you can see my thought process before such a highly volatile event.
This piece will be made public for 24 hours only, and then will return back to its private status. I want to help you understand my thought process and research style. By periodically allowing my public audience access to my exclusive work, I can ensure that the right types of people join our Community.
My August Investment Strategy report is now released, and it is one of my most epic pieces to date. In this research piece, I discuss extensively how the July FOMC, FAAMG Earnings, and China’s renewed volatility will restructure opportunities in the coming weeks and months.
All I ask for in return is that you share my email newsletter with any one of your friends who care about the S&P 500 or Chinese Internet Sector. This is a new month, with new opportunities, and new dangers lurking.
If you choose me as your Captain, I will do everything in my power to help you.
Dear YT Friends & Public Investment Community,
I will discuss investment strategy in just a moment. But first - I want to talk a bit about Greek Mythology, and you will soon see why.
In Homer’s “The Odyssey”, we are introduced to several types of mythical creatures, one of them being called a “Siren”. From an appearance standpoint, Sirens sometimes are mistaken for beautiful mermaids.
But Mermaids and Sirens couldn’t be more different.
Living in the deep ocean, Sirens are known for singing enchanting songs to distract traveling sailors from their destination. These Sirens’ voices have the power to brainwash sailors into jumping into the water and chasing after them, where they would either be dragged to the bottom of the sea or eaten by the Sirens. They were also known to lure Sailors’ ships into jagged rocks, causing the vessels to sink and perish.
In Homer’s “The Odyssey”, in an island near Scylla and Charybdis, Sirens would patiently wait for ships and sing their songs to cause havoc among sailors. The folk hero Odysseus helped his crew staff fill their ears with wax in order to help his crew stay focused. Odysseus personally wanted to hear the songs of the Sirens, so he intentionally tied himself the ship’s mast so that he couldn’t physically be drawn to the Siren’s songs.
Now that does this have to do with Investment Strategy?
Well, in case you haven’t noticed, media narratives and headlines are a subtle form of Siren’s call to action (from the perspective of market makers). Of course, not all are intentionally harmful.
But many of them pull at our human emotions of fear, of regret, and of excitement.
For investors who do not do their homework, and blindly follow into headline advice, their portfolios are being lulled into the same trap that sailors were when Sirens called for them using enchantment.
Do you remember when CNBC and Bloomberg sang the bullish chorus for Chinese Internet in early July? This was all discussed when Alibaba was north of 120/share. in U.S markets. Look at these images below.
Because I have done the fundamental, valuation, and macro work on China, in contrast to the public bullish chorus, inside our Community, I wrote the following opinion in our July 1st Half Bi-Weekly report:
That if Alibaba approaches an 18X forward P/E multiple (or near 130/share), risk-reduction is more appropriate than adding at those levels.
Alternatively, even though U.S. markets sentiment was deeply pessimistic in July, I believed that based on investor positioning, a short-covering rally could bring us into the 4000-4200 range for the S&P 500 in the 2nd half of July.
This was discussed when the SPX was still in the 3800 region. This opinion has since materialized.
All of my conclusions are formed using a combination of fundamental, macro, technical, and also geopolitical analysis.
What the investment narrative has shifted to now
After last week’s pivotal events such as the July FOMC and FAAMG earnings release, the narrative has completely changed among investors.
We are seeing several key opinions and indicators play out in the marketplace:
That the Fed has made a dovish pivot
That FAAMG earnings were incredible, and that the U.S. economy is unstoppable
That there is no Recession in the U.S. because of a strong jobs market
And as a result, the market structure and landscape has changed to paint a very different narrative.
The S&P 500 has broken above its 100-Moving Day Average, a key intermediate term indicator
The VIX is below 25
Bitcoin is above 23K - often used a precursor to understand traditional risk assets
A significant portion of key Nasdaq stocks are above their 50-day moving average
From a pure data standpoint, it seems that TODAY’S investment environment is a lot more friendly than it was just 30 days ago.
But I have a couple questions for you to consider.
Did most people actually listen to the July FOMC? Do they REALLY understand what Jerome Powell intends to do?
Did most people read the FAAMG earnings transcripts to REALLY understand what’s beneath the surface?
Did investors pick up on the line from Microsoft’s Amy Hood who said that the company’s guidance factors in macro conditions from June and NOT worsening macro scenarios?
Subtle important details like this and more are captured in my August Investment Strategy report.
I will not allow my Community to get seduced by the calls of Sirens.
If you’ve read my previous public emails, you can see that I do a substantial amount of homework on markets. This helps me keep my edge for you - for all of us.
I’ve fully assessed the July FOMC. I have read the earnings transcripts of Apple, Amazon, Meta, Microsoft, and Google and have published an opinion in my August Investment Research report inside my Community.
Let me just say this: the media headlines right now about a dovish pivot are as powerful as the Sirens from Greek Mythology.
Only you can choose if you want to believe it.
Only YOU can decide if you want to prepare for what may lie ahead.
Words of Affirmation from Inside
That’ll do for this brief update. Follow me on Instagram and Twitter below. I want to make as many global internet friends as possible.
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Best Investment Platform For HK-Listed Shares for Chinese Internet Companies: Interactive Brokers
❤️ this email if you enjoyed the read. And see you in my next Youtube Video.
Your Investment Strategist,
Larry
Important note: My public letters are not financial advice. You must do your own research. They are designed for educational purposes only.