Can we bottom now? Or is it all over?
Are we heading into the crash of a lifetime? Anything is possible, but I don't think so. ❤️ this email so that the Fed doesn't do a 75BP hike and send us all into a recession.
Note: This is my periodic email newsletter that I send to BOTH my public and private communities. If you are a part of my public community, support my work here and get deeper/more frequent insights as an inner circle member if you enjoy this read.
Dear Public Investment Community,
As a content creator on Youtube, I get access to a significant number of data points that help me understand broad retail sentiment.
In some ways, the comments section in my public videos or on my Tweets, the 1:1 DMs on Instagram that I receive, the numerous emails from my audience I get every day about markets, and also my own Youtube like/dislike ratio data trends give me incredible levels of data that confirm what the American Association of Individual Investors is saying about retail sentiment…
That most investors feel that the market right now has no hope.
And while there is no shortage of worries out there in the market (Russia-Ukraine Turmoil, High Inflation, and Hawkish Fed), we have to remind ourselves WHAT IF just ONE of these issues start to improve even MARGINALLY.
Then what?
If you’re not yet on my email list, I send out periodic emails to help our community at-large stay on the right side of the trade in markets.
By now, your email inbox is probably flooded with analysts doing “deep dives” on every single FAAMG company earnings report from Microsoft, Google, Facebook, and Apple.
You may have also seen Youtubers and high-profile Twitter accounts talk about why this stock or that stock is undervalued.
I’m going to spare you the details: if the market continues to go down, it doesn’t matter how good the analysis is. We are in a market that moves based on top-down events. Therefore, I’m very, very focused on understanding the general direction and identifying when certain THEMES are about to start working or faltering.
In more stable investment environments, bottom-up stock selection works very well. But with VIX at 35, it’s hard to say that we’re in a “stable” investment environment.
So what does this mean: it means you need to start formulating your own macro views on a few key issues which could entirely flip the market narrative so that you’re in the right THEMES:
When will Russia-Ukraine finally make peace?
When will the Fed start pivoting their tone between hawkishness and dovishness? How much economic pain do they need to see?
Will China CONTINUE to regulate their companies harshly when President Xi is up for re-election?
WHO (not what) is responsible for driving inflation? Think about for a moment and notice that I said WHO, and not WHAT. And think about when such groups of people may decide that it’s TIME to let inflation cool off.
What are leaders of corporate America doing their own insider transactions as well as their plans for staff count and product development as they represent the closest contact point to their company’s future? Are they hiring? Are they laying off people, while telling you the outlook is still good?
Of course, these are themes that I heavily discuss inside my investment community, but at the very least, I feel an obligation to my public community to ask you to think one step further.
If it weren’t for the turmoil, then I’d say passive investing would be the way to go. But in times like this, do you really want to be passive? Or would you rather seek knowledge to ACTIVELY prepare for any future downturn or upswing?
Passive: “accepting or allowing what happens, without resistance”
I don’t know about you, but in a month like April (Nasdaq down 15%), passive seems a bit…dangerous?
What we did during April
That naturally brings me to my next point. Well, what did we do in April?
Oh, I’m happy you’re asking. Look folks, there’s no guarantee that I can make magic work all the time, but I do immense levels of macro/equity research, and we served our community well during April.
We didn’t miss. In fact, objectively speaking, we did very good on a relative basis.
Here’s what we did (images below):
Heading into April after the March Rally, we advised to move all short-term THEMES to “Hold” (previously “weak buy in March”)
We also discussed Chinese Internet/Alibaba as an attractive accumulation stage at the 85/shr. levels. Subsequently, we saw further monetary and political support from China to bolster the economy, which has sent Alibaba close to 100/shr again.
We discussed SPX 4500 as my “line in the sand” for risk-addition or risk-reduction. And what do we do when we set rules? We follow them. I eat my own cooking.
We strongly advised our community not to add any exposure to GOOG/MSFT/AAPL/or AMZN ahead of earnings (despite their appeal)
(Moving to Hold in April as risk/reward diminished - Report published at beginning of April)
(Recommended Weak buy across themes in March - Timely considering the rebound)
(Discussed increasing exposure in Alibaba/Chinese Internet around 85/share - Timely considering Macro support from government officials came shortly after)
(Discussed risk-reduction across my coverage universe at SPX 4500)
Where did we miss in April? Well, after selling NVDA (275-280), SHOP (680-690), and PYPL (115-12) at pretty prices (see image above), I had added NVDA back at 220, SHOP at 600, and PYPL around 100-110 at partial positions at lower cost-basis.
And in terms of what I’ve done in the past week or so, I’ve talked about it inside our Inner Circle.
Look folks, I had a plan to follow. I’m not going to be able to sell NVDA at 280 and buy back exactly at 180, and ride it back up to 300 while escaping all losses. That’s just not realistic.
If you expect that level of surgical precision from me, I can’t do that for you. But if you want to navigate BIG pivots so that you make the right directional move, I can certainly help.
We had a good April (relatively speaking - all things are relative in the market).
I intend to help my community navigate May and beyond. Once again, my research represents my own views and my own personal journaling of thoughts. This might seem like financial advice, but it isn’t. I’m not a financial advisor - I’m an investment strategist. Very different roles.
This is investment research to inform your own due diligence process.
My May Investment Research Updates are now released. See what’s our next move.
Also, a special message to Financial Advisors/Financial Professionals
I would estimate that my Patreon Investment Community has at least 7-10% of members who work as Financial Advisors or Financial Professionals.
(This tells you that my research is good - my members are Professionals too)
It’s like Asian people going to eat at a certain Asian restaurant. You know that place is authentic.
Some of them decide to leverage my research to help their clients navigate turmoil. What an honor that my investment research & strategy is touching clients at the end of the spectrum.
Financial Advisors are totally welcome to share the opinions/themes on market directionally strategy to their clients.
Many Financial Advisors (both inside or outside of my Inner Circle) have ALSO asked me if they can leverage my research with their own company brand and logo while listing me as an Analyst/Strategist via white-labeling. I also provide that service as well, and pricing is….very good.
So if you’re a financial advisor, and you TRULY care about the wellbeing of your clients, then I’d suggest you at the very least join my community. You can deduct it as business expenses, and I promise you, I will open your eyes in terms of how to think about markets.
That is, unless you believe the in-house research at your own firm is better.
Then in that case, keep doing what you’re doing. 😊
But if you’re ready to take your client service to the next level, first join my community, and if you like what you see, then take the next step to discuss white-labeling with me. White-labeling is NOT expensive (it’s just 1000USD/year for Independent Financial Advisors), but what if you were able to make one good recommendation to your clients in this temporal market? Or what if you were able to present thoughtful macro/equity research at your next webinar and win the respect of your prospective clients?
I’m a value guy. I’m going to give you MORE than what you pay for. That’s a big reason many people come to me. Value, value, value.
Hopefully this email already gives you a sense of the depth I provide (and hopefully you had fun reading it).
It would make you LOOK good and your clients will feel better about market volatility.
And with that comes…referrals for your business.
An easy win, if you ask me.
That’ll do for this short update.
If you’re looking to truly understand the investing environment we’re in, and want to support my research/work, let me help you inside my community. I’m on a mission to help people as many people as I can - hardworking, highly intellectual people like yourselves.
❤️ this email if you enjoyed the read. And see you in my next Youtube Video.
Until then, follow me on Instagram for some VISUAL commentary.
Your Investment Strategist,
Larry