The Stage is Set and the Intention Clear: Central Banks are Now the Stock Market's Enemy
Friends, this is a serious email. Do whatever you can to get ready for the best opportunities ahead. Allow me to Help You. A Hard Landing Is Coming. Like this email if you are ready.
Note: This week was a dramatic turnaround for investors who may have underestimated the Fed’s willingness to remain firm on their campaign against Inflation despite a softening economy.
Given the return of market volatility and out of goodwill to my friends here who haven’t yet had a chance to experience my work, I am releasing my exclusive August 2nd Half (8.15.22 - 8.30.22) Strategy note to our Public Audience so that they understand exactly how our friends inside our Community have been positioned. This was the same research note that our Patreon Members received in Mid-August. The actionable strategy has been completely used up, but I still want to share this note with you so that you see what my Community can do for you.
Many Investors have gotten burned from this past week’s market bearish turnaround. During times of market volatility, I want to be the long-term Strategist for you.
All I ask for in return is that if you vibe with my Research, that you participate in my broad and powerful mission to equip investors with unprecedented levels of critical thinking. Share my email newsletter to all friends and family who are invested in the market. Share my Youtube channel to help me educate others. We are now entering a dangerous phase, again.
Investors were provided a 2nd chance to de-risk, like I said on Youtube. I have been providing a tremendous map this entire time. I want you to read the map I have drawn.
Dear YT Friends & Public Investment Community,
I have spent the past several weeks publicly on my social media and privately in my Investment Community serving one important mandate: helping any person who follows my work to preserve their capital so that when the “big moment” comes, my friends here can deploy their resources with greater power to secure the best opportunities at the best prices.
We already know what happened at Jackson Hole, how the markets reacted, and I’m sure the other analysis emails in your inbox have already recapped & summarized what Fed Chief Jay Powell said.
While there is certainly great value in a good summary of the past, there is even greater value in the content that was able to help people prepare for this moment - ahead of time.
What I aim to do is to tell you my world view of how things may play out BEFORE it happens. My opinion, right or wrong, will take a stance.
This email assumes that you’ve already digested what happened at Jackson Hole. There are plenty of emails that have talked about it, but very few that predicted what may happen, and even fewer that offered a preview into what may lay ahead.
I want to recap what we’ve been doing in my public content, and then inside our private content.
What I have been doing on my Public Email list:
Letting our friends know that Flying too Close to the Sun (chasing this specific rally in this environment) is dangerous
Reminding them that the Bears are recharging and that they will be back
And also reminding our friends that the call for a Dovish pivot is one of the most dangerous (but enticing) themes that have convinced some retail investors to re-enter at the highs of the rally.
On my Twitter (follow me here)
Reminding folks that China was the one part of the market that had the least demanding valuation.
Subtlety inserting my bearish opinion via carefully selected word choice
Sharing content related to our opinions for Weak Sells on the S&P 500, Nasdaq, and Semiconductors in Mid-August
And in my Youtube content (links below), I have purposely designed the first 15-20 seconds of my videos to hint at my primary opinion:
“We have been given a second chance. The markets have rallied off their lows and this has given some investors an opportunity to de-risk their portfolios” - Michael Burry Video
“Is China ACTUALLY going to collapse?” - China Real Estate Video
“I’m sorry to tell you this. But there is no Fed Pivot” - U.S. Real Estate Video
As you can see, I have basically gone all-out to provide prudent guidance and strategy in every forum where I participate.
Now, for everyone’s sake, I hope that the markets bounce one more time so that Investors have yet another opportunity to de-risk.
But as we know, hope is not a strategy. And it’s better to have been properly positioned for this large-scale move than to have to hope things recover.
With that said, I do hope all my readers here will have opportunities to de-risk at higher prices. Based on today’s macro landscape, any significant surge from here will likely lead to potentially another Bull Trap (if there somehow happens to be a rally from here).
Remember that markets can be irrational, and to be honest, the fate of the S&P 500 is controlled by those powerful enough to write the narratives.
They (the market-makers) can make you feel a certain way based on price action, and then instantly change the script at a moment’s notice.
I’ve been dealt my fair share of pain from the market in the past, and this is how I know this.
Surviving several brutal market cycles (a story for another time) has evolved me into a prudent risk manager. Without this experience from my past, being able to provide thoughtful guidance would essentially be impossible.
Before we keep going, if you appreciate my work, share my Youtube Channel and my email here with all friends and family and ask them to join my public communities.
By giving me a greater share of voice, you enable me to effectively present to the marketplace a more objective analysis and overview of what is truly happening in markets.
There is a LOT of noise on the internet. Unfortunately, the large amount of noise on the internet makes it difficult to pinpoint what the real signals are (which are what I’m trying to provide to you). You CAN make a difference in terms of who is heard more or not. I consider my audience size to still be extremely small (in the grand scheme of things), and I want you to know with sincerity that your opinion and voice matter to me.
On Jackson Hole and What Comes Next
Fed Chief Jay Powell couldn’t have been more clear about his stance on monetary policy in his concise Jackson Hole speech. Yet, there continues to be people who find reasons to believe the Fed will pivot here, or soon there.
While the Fed will eventually lower interest rates (the Fed Funds Rates) to ease financial conditions, that time may not be for a while. Until then, the loose financial conditions that we have now are about to get a bit (or shall I say a lot) tighter.
This should not have been a surprise to anyone.
It wasn’t to me.
And it probably wasn’t to you (if you follow my work closely).
But there are people out there who believed the media narrative.
It is my mission to help investors understand HOW to think about this market objectively.
It’s time to understand that we have entered a new era of “Inflation Volatility". Inflation will no longer simply trend higher or lower in a linear fashion. It is going to be volatile, and this uncertainty that will soon form the new narrative “higher rates, for longer.”
Inside our Community, we discussed several key opinions based on carefully curated research AHEAD of this macro outcome
Within our August Investment Slide Deck (image below), we publish top macro risks and upside catalysts to help investors understand the landscape thoroughly. You can see that we put Investors misinterpreting the July FOMC as an “exceptionally high” risk event.
You can also see that from our Theme Basket views (images below) from July to August, we had moved several key themes into “Approaching Weak Sell on Impulsive Rally.” At the same time, we moved Chinese Internet from Hold/Approaching Risk-Reduction to Approaching Weak Buy.
All reasoning and rationale is provided inside our Community.
Top 5 Macro Risks (Source: Our Investment Community Monthly Slide Deck)
My Opinion on Theme Baskets in August 2022 (Published August 1st)
My Opinion on Theme Baskets in July 2022 (Published July 1st)
Now for our public friends on our email list that want to understand what we do inside my Community, I want to show you my most recent analysis - our August 2nd Half Investment Strategy Report.
Inside this report, you will see the following:
My opinion to advocate for risk-reduction for the S&P 500 north of 4200 (the higher the better obviously)
My opinion to advocate for China still presenting valuation attractiveness.
My full thought-process behind the entire investment landscape.
You can see in the image below that everything in all my reports are timestamped and clearly marked. This report was published on 8/14 (S&P 500 was at 4280). (Click file link PDF below where it says 4.5MB).
If you vibe with my actionable research style, be a part of what we do.
The markets have entered their next dangerous stage. And I intend to ensure that everyone who follows my work will not only be ready for lower prices but be able to take advantage of them.
Those who are equipped with what I teach them will be able to use this landscape once again as a way to bargain hunt at the right time and reduce risk at the right time.
The qualities that make members most successful inside my Community are the following 3 traits:
Deep and unquestionable patience, and long-term orientation towards investing
A willingness to learn my methodology and process (I will teach you my process through my research)
Be able to take market heat (volatility) because it is guaranteed to happen, without losing your cool
If you have these 3 traits, I welcome you inside.
I will show you the art of fusing Fundamentals, Macro, Technicals, and Behavioral Change together to take you to the next level.
We walk away from the latest macro selloff relatively unbruised. I want you to be in a Community that cares about you, looks out for you, and teaches you how to patiently Hunt.
In my last email, I showed you some of our key opinions in 2022.
With me sharing my latest Research note with you, I proudly want to let you know that, once again, we are winning as a Team.
Investments is very much a Team Sport. And I want to serve as your Captain.
That’ll do for this public community update. Add me on Instagram and Twitter below. On Youtube, I only get to post once per week. But I am able to be a bit more active on Twitter and Instagram.
Add me! 😊
Social: https://www.instagram.com/larrycheungcfa/
Twitter: https://twitter.com/LarryCheungCFA
Patreon Investment Community: https://www.patreon.com/larrycheung
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.
