Note to Public Community: Powerful Turnaround in Chinese Internet + S&P 500 | Inner Circle Updates
Public Commentary on Chinese Equities + My Latest YT Video
Premium Public Content (For Youtube Friends)
Hey YT Friends, it's your friend & Investment Strategist Larry Cheung, CFA.
I’m trying a new email format called Substack. I’m new to it. Give me some time to understand and fully grasp it. I really like the fact that it has an archive like feature that allows you to read my previous posts. Please share this email to friends and family who you think might enjoy my content.
For this update, I want to continue to express my gratitude for the deep patience that my most active followers are demonstrating in light of the extraordinary volatility and subsequent bounce-back that we have been experiencing.
I sincerely hope my guidance both publicly on Youtube & Twitter, and in my Inner Circle on Patreon has provided powerful, calm, and objective forms of thinking to help us stay firm during this period of time. Of course, there’s MORE volatility ahead, but I will do my best to keep everyone level-headed.
I have received countless messages from people telling me that they "believed" Alibaba was going 0, or that they panic sold at 70-80, or that China is totally “un-investible.”
In fact, you can almost use my Youtube comments section as a sentiment gauge of overall market sentiment. The more toxic, the more negative, the more irrational the comments, the more confident I became in knowing that one side of the market was about to turn violently. I just couldn't be sure of when that would be (nobody knows).
I want to lightly touch on 2 core topics - the recent shift in tone stance by the Chinese government and the Federal Reserve's March FOMC Meeting.
I'm going to keep the information high-level / general in my email here because I will go in deeper detail in my upcoming Youtube videos and in my inner circle on Patreon.
On China
What we saw this week from Chinese policy makers was a change in NARRATIVE, with future fundamentals likely to be improved in the FUTURE.
There was discussion about monetary policy support, more clarity on regulation, and a softening of real estate restrictions.
While fundamental developments in China have yet to change at this very moment, this development removed quite a bit of policy uncertainty. Remember that markets are always forward-looking.
One mistake that people make is thinking that "nothing has changed." While that might be true, the narrative certainly has. When narratives change, so does investor confidence. Markets move on stories & narratives as the current landscape starts navigating towards the future expected environment.
On the Fed
Jerome Powell sees 6 more hikes in 2022. And while that might seem aggressive compared to the policy direction earlier this year, institutional investors have largely repriced the markets (much to the dismay of tech investors) with this expectation since November 2021.
By leaving the door open to have each meeting be dependent on live data, institutional investors are comforted that the Fed is monitoring the data to see if economic weakness could slow down their rate hiking path.
The market almost always reacts positively when the Fed says that they are data dependent because this is another way of saying that "we'll slow down rate hikes if the S&P 500 is falling substantially."
In the past several weeks, I've expressed cautious optimism despite the intense fear and uncertainty. After these pivotal events from this week, I continue to be constructive, but would like to remind our community that buying today comes with lower expected returns since some of the rebound upside has been consumed.
This week on Youtube
New Video Topic: How to secure opportunities in Finance Job Recruiting in Investment Management, Equity Research, and Asset Management
Intended Audience: College Students, Young Professionals, Job-Industry Switchers
Reason for this video: Now that the markets have some semblance of stability and volatility is a bit lower, I want to take this opportunity to continue to educate/enrich our community on self-development and personal growth.
The Youtube Algorithm rewards my videos when I discuss market-driven investment research and strategy, but I also want to add value in different ways, to different audiences so that our community is more diverse with varied interests and backgrounds.
If you are in College or a Young Professional (under age 30) looking for the same level of deep insight on job recruiting that I use in my investment strategy content, this video is meant for you.
If you are more experienced and have wisdom to share, share your voice in our comments section.
Inner Circle Retail Investment Community Updates on Patreon
The S&P 500, Alibaba & Chinese Internet meltdown and subsequent strong bounce-back was a significant opportunity for me to showcase the value of proper guidance and strategy during this intense period of uncertainty.
On Alibaba / Chinese Internet
I continued to strongly advocating for holding positions during the downturn. I was not able to make any purchases near the bottom as it happened too quickly. I was able to catch Alibaba modestly under 100, but that was it. The movement and turnaround time was simply too quick for me to have been able to add BABA positions in the 70-80 region given all my other long positions were down.
So I strongly advocated holding and light additions at 100 if our members truly wanted to add.
My strategy is focused on prudent and thoughtful position sizing while offering strong psychological support to our community when they need it most.
On the S&P 500 / U.S. Equities
Although it doesn't feel like it today, the mood for U.S. investors was also dark when SPX was near the 4100 region.
In my recent Bi-Weekly Note, I talked about the fact that this IS NOT the time for long-term investors to give up. I discussed which themes would bounce back the fastest, and which sectors within technology would likely lead the recovery.
Our strategy & execution was fully discussed in my latest inner circle Bi-Weekly Market Note update.
How my Community can help you
If you are serious about ensuring that you can ride the next wave of volatility with a proper strategy, I would encourage you to join our community. Losses minimized, headaches avoided, and opportunities seized are all areas that I wish to help you with.
Having a support network and thoughtful research to help guide your thinking when things are depressed or euphoric will help you make better decisions that will greatly benefit you.
Our community is getting larger by the day. My commitment to you is that there's no other Equity Analyst on Youtube that provides the same level of depth and support at the membership price point that is offered. Also, most learning & development membership communities like ours can be deducted from your taxes as business expenses.
Thanks again for an amazing global community.
A Message to Financial Advisors looking to grow their firms
Dear Financial Advisors, Wealth Managers, and Institutional Investors:
On Youtube, I help retail investors equip themselves to be stronger analysts and navigate market conditions. On Patreon, I am the host of a strong, positive, and connected global investment community of retail investors.
I have the unique background of someone who simultaneously deeply understands the financial services industry and the world of genuine online marketing.
Of the many marketing firms that serve financial advisors, very few of them truly understand your business and your struggles. But I do.
Today, retail investors have different expectations of what their financial advisors can do for them.
In fact, there is a statistic that 70% of heirs are likely to fire their financial advisor after inheriting their parents' wealth.
You want to stay ahead of this trend, because that means that you could can be on the right side of this wave of new business opportunities if you are positioned correctly
Many financial advisors are too dependent on referrals, and do not have any online presence to connect with their future clients.
I can help you change that, and the way you attract high-quality people who want to work with you.
If you are a financial advisor, and are in a position where you can grow your business, here are some ways we can connect:
Let's have a 45 Minute Audit of your current marketing strategy
Follow me on Linkedin, and send me a message about your top 3 problems with client acquisition.
Before I joined Substack, I only sent 4 emails publicly to my email list on Youtube. Feel free to read them to catch up.
Announcing a private community for people who love my research
Discussing market volatility in Mid-February
Pointing out excessive pessimism in late February
My thoughts on Alibaba falling under 100/shr
Also, feel free to add me on Instagram, Linkedin, and Twitter! 😊