Bulls and Bears will have an epic clash this week: which camp will win?
Press the like ❤️ button if you plan to stay focused on your plan despite the guaranteed volatility that is coming this week.
Note: In our opinion, the next 6-18 months will be provide the Big Opportunities for people who have cash and have been preparing for this moment will be able to get astounding prices of the best companies for the years to come. The Bear Market will come back in full force soon and those who have been patient will be rewarded in an outsized way.
For Chinese Internet stocks, I am personally going to start using Interactive Brokers for any new transactions in Chinese Internet companies such as Alibaba because of heightened US-China tensions. Interactive brokers allows us to purchase companies on the HK-listed market to avoid potential de-listing hassles.
Our community will provide the investment research and actionable strategy to help our friends manage risk & reward appropriately.
Dear YT Friends & Public Investment Community,
We will talk about Investment Strategy in just a moment. Before I do, I want to bring your attention back to a pivotal moment in history. The goal of my public letters to my Community is to help you understand how I view markets by connecting the most valuable disciplines from liberal arts together: History, Literature, Psychology, and Philosophy.
While the world as we know has witnessed countless battles and wars over the past several centuries, historians have attempted to assemble a list of epic battles that have completely changed the course of history.
One of those events was the Tet Offensive, a pivotal moment in the Vietnam war that changed the trajectory of the US-Vietnam conflict. Pivotal battles are important to study because they represent the changing tide of an ongoing battle. Making a swift decision after a pivotal battle has played its hand will allow armies to position appropriately to avoid further losses.
The Tet Offensive was a coordinated and planned North Vietnamese attack on more than 100 cities, outposts, and strategic locations in South Vietnam. The offensive was an attempt to stir internal rebellion among the South Vietnamese population and encourage the U.S. to reduce its involvement in the Vietnam War.
On January 31st in 1968, North Vietnamese military commander General Vo Nguyen Giap coordinated a large offensive of surprise attacks to break the stalemate in Vietnam and cause the South Vietnamese population to change their sentiment on the war.
Giap’s understanding of the relationship between the South Vietnam and the U.S. was that it was unstable. The Tet offensive would widen the wedge between them and cause the U.S. to give up their final defenses for South Vietnam.
The North Vietnamese army decided to strike just as many families started celebrating Lunar New Year. Within a 24-hour timeframe, they struck a number of strategic targets throughout South Vietnam - cities, towns, government buildings and U.S. military bases throughout South Vietnam in a total of more than 120 planned attacks. Despite being able to fend off the Viet Cong in this specific conflict, the U.S. military realized from this event that this battle would be a long-drawn out war.
The disruption that the Tet offensive caused in South Vietnam made some of President Johnson’s advisers argue back at the White House for scaled down U.S. involvement.
By March 31st, President Johnson declared that he was officially reducing the bombing of North Vietnam to the area below the 20th parallel. This would allow 90% of the North Vietnamese territory to be spared from further bombing. Soon after, there would be calls to end the war. And President Johnson would later announce that he would not be running for re-election that November.
Here’s how this relates to your Investment Strategy:
We need to realize that the market (S&P 500, Nasdaq, KWEB, etc) is a place of financial & economic battles playing out every day. Some investors advance their goals in the market, while others do not.
The major bear market rallies that we are experiencing, the major pivots in the market, and the noise/signals that we are constantly being exposed to in the media are designed to pull us into either the Bull or Bear camp.
Every single major economic data point that is released has the ability to shift the tide and the narrative in the fierce battle between bulls and bears.
And one thing you should know is this: while the 2 camps can have equal victories in a short/intermediate time horizon, only 1 camp wins in the long-term.
Just like how the U.S. and South Vietnam initially had the edge in their favor, they eventually lost to the Viet Cong (North Vietnamese Army).
And the major pivotal moments that signal the path ahead are the ones you do NOT want to miss
As of today, the Bulls have the following in their favor (sample list - there’s more):
Net investor positioning that is conservative (high cash piles to buy the dip)
Significant short-interest in large cap Tech, which could be unwound and drive a further advancement
A slew of perceived good news such as a “Fed Pivot”, strong FAAMG earnings, and a large percent of companies that have beaten Analyst expectations
Strong headline jobs & employment figures
The possibility that inflation will quickly fade away, which will restore consumer confidence
The Bears have the following in their favor (just a sample list - there’s more):
The argument that estimate cuts for S&P 500 companies have not really begun and a weak consumer makes this inevitable
That there will be no Fed Pivot due to inflation running persistently hot.
The fact that Russia’s constraint on gas supplies to Europe virtually guarantees economic hardship ahead for the EU
That inflation is not only elevated, but broad based and will take significant monetary tightening before it retraces
And while price can drive sentiment for quite some time, which sets of arguments do you believe will eventually prevail?
As of this public letter to my Community, we are in the motion of an upward counter-trend rally. And of course, just like many long-positioned investors, I want the market to go higher.
But just because I want the market to go higher does not mean that it will. I serve an important mandate in my Community in that I must produce the highest level of investment research so that our members can make decisions for themselves.
And what I see is that the easy money from the counter-trend rally has been made. It gets more difficult from here if you are bullish.
A key defining moment for the S&P 500 is quickly approaching
It is my private opinion that when the new bears who shorted the S&P 500 in May or after capitulate, this group of bears and new bulls who are attempting to chase this counter-trend rally will be simultaneously disappointed.
In the Tet Offensive during the Vietnam War, there was no official warning that the North Vietnamese (Viet Cong) army would strike the South Vietnamese areas with such ferociousness. This pivotal moment in time played on human emotions as the Viet Cong purposely gave the U.S the appearance that they were retreating, only to shatter confidence with their offensive when the U.S. and South Vietnam least expected it.
The markets can turn at any given moment, and what we do inside is to equip our Community with pre-set plans and guidance so that they know HOW to act WHEN the time comes. Nothing is ever done on-the-spot or impromptu based on my approach. Everything is planned out ahead of time so that if X happens, we do Y. Or if Y happens, we do Z.
We focus on Strategy. We focus on ensuring survival, and tilting the probability of winning to a much higher degree. Nothing is guaranteed in the stock market, but having a plan is the best defense against a volatile environment. And that is precisely what we do at a price level that is globally affordable to all who wish to learn my methodology.
The counter-trend rally that we are witnessing today is once again building up hope, belief, and faith that the Federal Reserve can control inflation without sending us into a recession.
And while the public may be buying this story, I hope that you view their words with lens of healthy skepticism.
The bears are recharging. And they will give no warning when they come back. They will come back when most people least expect them, and their next attack will be as pivotal to market sentiment as the Tet Offensive was to the US-Vietnam war.
This is an extraordinary time to learn the analyst skills that will help you take full advantage of the inevitable volatility that comes ahead. We will discuss defensive strategies AND offensive strategies depending on the environment.
As a Community, we have navigated this year with incredible maneuvering. Here’s what we’ve been doing to help our team navigate the constantly changing landscape in just the past 45 days:
Guided on strong risk/reward setup going into July for Semiconductors
Guided on fading risk/reward setup for China heading into July
Guided on increasing risk/reward setup for China/Alibaba at the beginning of August when BABA was at 89/share (earnings subsequently took shares up to 100/share before geopolitical worries resurfaced).
Guided on the S&P 500 potentially entering the 4000-4200 region if FAAMG earnings were acceptable
When markets are down, I will hunt for the companies that will produce strong alpha-generating opportunities when the time is right. When markets are up, I will help you protect your advance in the market.
Please understand that in my public Youtube comments section or on Twitter, I cannot answer any question related to what I think about certain companies.
But inside our Community, I provide specific actionable levels for when I believe accumulation is a possibility and when risk-reduction is appropriate.
Investments is a very much a team sport, and I want to be your Captain.
Like I’ve mentioned many times publicly, this is a time where you choose your Strategist to guide you as the easy gains have been made.
It can be me, or others. But whatever you do, find the right person to guide you. If that person has been me, then share this email with other folks who care about their future.
My public content gives our friends listening/watching a strong sense of my values in addition to my research. If we share the same views of the world, then join a community of like-minded folks who have already benefited from our strategy and will continue to do so.
I am going to make as many Global Internet friends as possible, and our pricing reflects our committment to help all those who want our help.
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. Follow me on Social below.
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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.