That $1.3 trillion just sort of came and went within a month, and people didn’t really notice – amazing.
By Wolf Richter for WOLF STREET.
The week was marked by the continued tech sell-off and the wilting of the hugely promoted “rotation” into small-caps: The S&P 500 dipped 2.0%, the Nasdaq composite fell 3.6%, the Nasdaq 100 fell 4.0%, and the Magnificent 7 fell 4.7%.
But the Russell 2000, which tracks nearly 2,000 small stocks, spiked 5.3% during the first two days of the week, as part of the “rotation” into small stocks, and then got hammered down 3.5% over the remaining three days of the week, and ended the week up 1.7%, to be right back where it had been in February 2021.
The Mag 7 lost another $113 billion in market cap on Friday, bringing the total decline from the peak on July 10 to $1.32 Trillion (-7.7%). That $1.32 trillion just sort of came and went in about a month, spread over just seven stocks, and people didn’t really notice – amazing when you think about it. It used to be some serious money.
Their combined market capitalization is now down to $15.69 trillion, from over $17 trillion on July 10. The Mag 7 are now back where they had first been on June 13. This $1.32 trillion has blown past the dollar-decline in April (-$1.13 trillion). But the 7.7% drop still doesn’t quite measure up to the April drop of 8.1%.
The declines of the individual stocks in the Mag 7, from the July 10 peak (Nvidia bounced on Thursday but gave it up again on Friday):
- Apple [AAPL]: -3.6% (-$129 billion)
- Microsoft [MSFT]: -6.3% (-$217 billion)
- Alphabet [GOOG]: -6.9% (-$164 billion)
- Amazon [AMZN]: -8.3% (-$173 billion)
- Tesla [TSLA]: -9.2% (-$78 billion)
- Meta [META]: -10.8% (-$146 billion)
- Nvidia [NVDA]: -12.3% (-$410 billion).
Over the past 12 months, in percentage terms, two of the Mag 7 stick out:
- Nvidia, which is still up 150% in 12 months, despite the recent decline (red line in the chart below)
- Tesla, which is still down 18% in 12 months, and down 42% from the all-time high in February 2021 (green).
The 12-month gains of the remaining 5 Mags are dwarfed by Nvidia’s 150% gain, though they’re still steep despite the recent declines:
- Meta: +50.9%
- Alphabet: +46.1%
- Amazon: +35.3%
- Microsoft: +23.1%
- Apple: +15.0%.
Small stocks keeled over on Wednesday, July 17, after their sudden bout of glory during which the entire market was supposed to “rotate” into them, or whatever.
The Russell 2000 had spiked by 11.5% during the five trading days between July 9 and July 16. On Wednesday, the index began to drop, and on Friday, it closed down 3.5% from the Tuesday high. But thanks to the 5.3% spike during the first two days of the week, the index was still up 1.7% for the week.
The Russell 2000, at 2,184, is right back where it had been in February 2021. That kind of sudden spike and drop is not soothing our anxieties, for sure.
The Nasdaq 100 Index, which tracks the 100 largest nonfinancial stocks on the Nasdaq and is dominated by big tech and social media stocks, fell by 4.0% for the week and is down by 5.6% from the peak on July 10.
Year-to-date, the index is up 16%, despite the two sell-offs. The first one in April ended with a 6.2% drawdown.
Since the beginning of 2021, the index is still up 51.5%, with a huge trough in the middle. It has shot up 88% from the bottom of the trough in December 2022. That dizzying move to these dizzying highs is not soothing our anxieties at all:
The S&P 500 has just started to show the first impact of the tech drama. The sell-off has been puny so far. The index fell 2% for the week and is down 2.9% from the high on Tuesday.
Since the beginning of 2021, the index has soared by 47%. Since the bottom of the trough in October 2022, the index has soared by 53%. These are huge fast gains on top of already very high valuations, and the draw-down so far has been nearly nothing:
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Thoughts on home builders going up 15-20% in a week?
(❁´◡`❁)
Well said.
I’m getting deja vu…
Finally made money on my SOXS and SQQQ Options, covering the previous losses from this year, plus some more this week. I sold most of them at the end of Friday, but held onto some to see what happens in the next few days. I think that the markets have a couple more run ups before something finally breaks for good. I have used those as a hedge against my long held Nvidia position (7 years), which I have consistently sold parts of all the way up, while still holding on to a nice position.😎
Boring. Let’s hear about all the losses….
Years upon years of wannabe day-traders acting smart and wealthy, but when it all comes crashing down we’ll never hear about how the wife ditched them and they are toiling away as a Walmart greeter with no retirement.
Traders Die Broke-Jess Livermore
If one wants to learn how long term “successful trading” really works, Check out ” The BLACK EDGE” by Sheelah Kolhatkar.
Depth Charge, wake up on the wrong side of the bed this morning? Lol. Not a day trader, in fact in my bearish outlook I got rid of all my long equity position except Nvidia and GLD and missed out on this last run on the other stocks, I used to own. Earlier this year I played those same options on occasion in small amounts, as a hedge against the run, NVDA wasi making. I lost money on them. But my overall thesis that the semi conductors and Nvidia in particular had made such a huge run, caused me to double and triple down a few weeks ago. This time it worked out. I don’t day trade and I don’t play any other positions. I just thought the NASDAQ had gone up too much too fast., Not to mention it was a nice hedge when the inevitable Nvidia sell off occurred. Have a nice day!🙏🏼
Another sourball trader
The scoreboard reads
Depth Charge 100
Dave Linn 0
Nvidia would never hit this high without QE from the Fed. But good for you for holding on to it. Cherish it while you can. This will be the last hurrah for tech stocks unless the Fed is depraved enough to start a new round of QE.
There has not been any QE in over a year.
When I place my bets I wear my orange stripe sock and stand on one leg for luck, it’s usually a sure win.
Failure is a horrible thing, got to be smart.
One day I might ‘disappear’ my money into the black hole and see what comes out the other side.
SQQQ options? So you’re buying options on an inverse 3x ETF with a time decay???
What’s the rationale here? SQQQ is only meant to track daily movements, it doesn’t correlate well with long-term down trends.
An obscenely rich mens’ speculative orgy care of ZIRP/QEinsanity where the privileged few enjoy lives of opulence not even they could have imagined while the working class and the poor get crucified under unrelenting inflation in all need-based household expenses, paid for by the stolen futures of the children.
What we need are cage matches between guys like Z-Yuck and Musk-eww where they fight to the death, with the loser donating all their personal wealth to the state and the winner doing the same, but escaping with their beating heart where they then serve the rest of their days at a soup kitchen. Call it the reverse Circus Maximus.
Every month I contribute to 401k, fresh money allocated to funds. Wonder how much money U.S. workers contribute to 401ks every year. Quite a racket some lobbyist for financial industry was able to get pushed into tax code.
@Max: Yeah, it has been ensured that the money will flow into specific company offered options, mostly in stocks and bonds propping the markets up continuously.
Everyone contributing to their 401(k)s have zero control on specific asset allocation, they can only flip back and forth between the investment options offered.
The financial institutions “managing”the 401(k)s get a piece of every investment dollar automatically irrespective of the funds performance.
If the objective is to have the “experts” manage retirement moneys, shouldn’t they be held responsible for their performance?
For the financial institutions, it is all fee income and no accountability.
What are you talking about? Almost everyone has all kinds of options in their 401k, including plain vanilla CDs.
Happy1. Every 401K, for a salaried employee, has a set of “funds” the employee can choose from. It’s a limited set of options, all have management fees of various persuasions and sizes. I’ve never seen an option for CDs. Some fixed income funds which are usually blends of bills, notes and bonds or corporate bonds.
It’s all because they care about your retirement don’t you know. /s
“Every 401K, for a salaried employee, has a set of “funds” the employee can choose from. It’s a limited set of options, all have management fees of various persuasions and sizes. I’ve never seen an option for CDs.”
I have CDs, treasuries (agency bonds), and a few mutual funds in my 401k. No index funds.
The passive bid that Michael Green has warned us about. The smart money 💰 is selling what the passive investor is buying.
But once the passive investors start to panic, look out below…
Well said.
Love it! Throw in Jeff and Timmy too! Ticket sales to help pay down our debt.
Depth Charge – ^This!! Stream the matches pay-per-view. The billionaire’s minions fight it out in the undercard matches. Everyone can bet on their fave billionaire. At the end of the main event, the loser’s yacht gets blown up real good live. Random matches will have a death-row inmate assigned, so it will be a 3-way match. There can be an annual Reverse Circus Maximus All Stars show, where previous winners battle each other to the death. Copyright this idea right now!
The guy Bengen who created the 4% rule, years later bumped it to 4.5% if one adds a small caps position. Looks like this the updated rule is not going to hold up.
Is it possible this is just the very early stages of profit taking? Can / will people panic out of stocks like they would with banks crashing? I know that’s probably unlikely given the mass quality of passive investing and concentration in index funds.
As a late friend used to say with a twinkle in his eye about the endgame of potential investment & sports “bets”: “We’ll see.”
The last time people ran from stocks without a corresponding bank panic was 2000. It came back with a vengeance a couple of years later. Buy the dips.
That didn’t work in 1929. Get out of Dodge.
Buying the dip is fine, if you buy near the last dip. Dips can keep dipping.
Kent, not sure stocks “…came back with a vengeance”, meaning the S&P500 didn’t make new highs seen in 2000 until 2014.
Let’s see. Who gets a pension anymore? I guess those that have one will be living on it now and more of them than before. In the same light, baby boomers without a pension will be living on those 401Ks, more than before. Gen-x is small in relation to Boomer of Millenials, but will reach market extraction age while most boomer are still pulling.
The only saving grace here are the new laws put in place to increase the number of employees covered by “retirement” plans. Will their input exceed the output of the previous generations?
I hope so, its already enough of a social and productivity shit show with the boomers retiring and Gen-X burning out.
Blah, it’ll be nothing burger 2 weeks later perhaps. Just a quick fuel stop for the BTFD crowds to hop on before the next stop to the moon then Mars…
Hopium is still plenty, plus all those ETF have to plow their money back on the hype train. The fact that bitcoin once again back to $67k after falling here and there but refuse to go down for good makes a good case that we are in some kind of F up paradigm
Dow 100k. BitCON $1 million. Better hurry….
The #Bitcoin price is a measure of risk appetite, which never grows to the sky!
The difference between today’s bitcoins and tulips in the 1630s is that tulips were real.
Trivia re tulips: the original Dutch crash was so bad laws were passed negating tulip debt, because the whole economy was falling. Fast forward and today Holland makes about 300 million US a year from tulips and bulbs. Only a small part of total ag sales however as incredibly the country is one of world’s largest ag producers. Their largely automated green houses supply the EU with most of its tomatoes, peppers etc.
Near the ocean in Vancouver BC, their are lots of these huge green houses via transplant Dutch tech.
Hopium is a hell of a drug!
Imagine how many things you can fix like healthcare, infrasture, homelessness with just the $1T+ loss from this tiny market adjustment…but that would probably be too boring for most people, you can’t make 10 to 100x fold return from stuff like that.
whats wrong with healthcare?
the system is operating just as it should.. creating never ending profits for the big drugmakers, hospital systems, and insurers..
whats wrong with being homeless?
“you’ll own nothing, and be happy” they say..
and ‘infrasture’?
weren’t you aware that distressed and dilapidated are all the ‘rage’ now?
but no, really…
even a trillion dollars isnt putting much of a ‘dent’ into ANY of the things you cite.. an order of magnitude bigger is needed, at least.
No wealth was created or lost that could have been spent on healthcare or anything else.
Wealth is created when companies grow or make profits. Share price movements that don’t reflect fundamentals are just a casino in which people who time the market right take money off people who time it wrong.
I tend to believe wealth is created when companies invest in new production and productivity. Profits are a general signal that wealth has been created. I say “general signal” because a little fancy accounting can show profits that don’t actually exist.
Yes. Saving generates growth, not borrowing.
Yes, but capitalism works only if players act rationally. If they develop an inflationary mindset, there’s an unaccounted wealth transfer to business owners, which is not attributable to value generation. In theory, such spectacles can reverse, but not if the Fed prints money every time the economy stubs its toe.
It’s the Fed that keeps inflation alive and prevents the recessions that are required for efficient capitalism.
No worries. It’s just nerves.
Now , we all will have to painfully suffer the stress of those ones who doesnt have any kind of insurance against stocks .
The only “good news” is that Bitcoin is up, so many of those hangover sailors are having breakfast with a vodka shot.
Last time Bitcoin went down I ended up my friendship with many sailors. They were too scared and angry to deal with.
This world would be better off with people not blaming the rest of the world for their own faults.
A man should never cry about loosing a bit of money, he should be prepared enough to resist some money loss.
The funny thing is that many of those sailors are brave men when things are up and crying childs when things went down.
SG:
My best US Navy bud told me, in very clear language,,, AFTER age 40, YOU are responsible for your face and fate…
Just agreeing with you that ALL ”ADULTS” must stop ”blaming” anyone else…
Just TRYing to do otherwise is not only an exercise in futility, but bad bad bad for any individual who can do otherwise…
Sadly, due to lack of education,,, many cannot do otherwise.
So, your friend in the Navy can be a slob seamen and blame others. But when he turns 40 he’s got to square himself away? …
Uneducated people blame others?, that needs a looking at. I think educated people are idiots, that’s why I try to stay stupid.
Of course they do. Maybe not all of em but enough. Just look at the red flag wavers in the current presidential race and tell me that’s not what’s going on here.
It’s one of the classic ways to power – mislead one class to fight another while you aim to privatize public assets for the benefit of your friends and crash democracy.
Waiving that “other” flag didn’t work out well…imagine that.
I hope our democracy doesn’t crash as you suggest, but the crasher is back in town waiving that red flag again. Oh the misery.
Luckily we’ve got wolf street…thanks wolf.
My uncle was 78 (I was around 35) when he told me,”I can’t say for certain yet, but I am pretty sure the first 40 is better than the second 40″.
And you are doing very well at your stated goal.
My deep out of the money puts have come into the money. Sold half of them on Friday.
2 percent spx or 4 percent ndx is deep? Or just cheap
As an actual sailor, I lost a lot on buttcoin in 2022, but it was my own damn fault.
I do not recommend Vodka with breakfast. Having a beer during/after docking the boat is ok. No drinking in the wheelhouse however.
The last Friday’s blue screen blackout shows how venerable all this $15- $17 tril tech is. Isn’t it grand sitting around an airport or hospital waiting on Microsoft to correct itself?
Microsoft did not make any errors as to the CrowdStrike software that was done incorrectly and that is 100% the responsibility of CrowdStrike and its customers to correct. Elon Musk simply removed it from all of his servers as it is a totally unnecessary piece of software that can and does result in huge system crashes, this time affecting 8,500+ servers.
Venerable means old. Did you mean to type “vulnerable”?
Historical analysis shows that July 17th is the actual date that annual corrections start, leading to an August that is the worst month in the year for markets. This is long since known and ascribed to the holiday spirit, most traders being on the beach in the sun, but I have only recently read that the 17th is the usual action date. How much correction? Perhaps fortunately it is not given to us to see into the future. Buy the dips? A little soon and slowly increase with time?
Yes. July is risky. October as well.
As Mark Twain said: “October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.”
Stocks can go up or down, but only on five out of the seven days that end in the letter Y.
A trillion here and trillion there. Pretty soon we will be talking real money!
As a person who believed the hype and maxed my IRA cotributions for decades, I would not advise anyone to be so foolish.
Unless you end up poor as hell or believe taxes will be less in the furture, pay as you go is a better option.
All things said, I did much better with my own investments, than any IRA options and my tax level is much higher now than anytime in the past.
It may work for those that can’t save or still have good employer match. The rest is a sucker trap.
Are you meaning to say 401k instead of IRA? If you meant to say 401K, your argument is only correct if you will be in in a higher tax bracket late in life. This does apply to some people. But not most. Especially not people during their highest income earning years.
And if you retire early, there is all kinds of opportunity to take a 401k and turn it into a Roth IRA, before you have to take RMDs. And for most people who are concerned about being in a higher tax bracket late in life, this is the pro move.
Trading algorithms have shortened market movements.
It’s striking that $AAPL, which stopped growing years ago, declined least. Apple 🍎 survives by exploiting its customer base. I guess that’s why Warren only sold some….
Apple sells a ton of products and sells them every year.
Think about it, what if you needed a new toaster, you raves about your last one and so replaced it every 2 years by going down to the corner toaster dealer.
That’s Apple baby!
A good stock. I’m gonna be putting a good bit of my “fun” money in AAPL and other tech stuff and just ride it until I retire or until it helps me retire early. These stocks are the muscle of the American economy . This is our advantage over the rest of the world. Own them proudly.
In the tech bubble, stocks were priced according to PEG = Price/Earnings x Growth. Apple 🍎 stopped growing years ago. With the next recession, it will shrink. You likely won’t get your fun money back.
“Apple sells a ton of products and sells them every year.”
well duh.. anytime you have multiple millions of people corralled into your corporate ‘ecosystem’, you can do damn well as you please..
apple isnt inventing or creating new products/services and hasnt been for a long time. all its doing is ‘managing’ its core product(s) enough to maximize profit (through ‘bricking’ older products, increasing fees for services, etc) and minimizing costs. the iphone is the same as it was when it came out.. except for incorporating newer/faster tech since.
people admit with a laugh how brainwashed they are into using apple’s products, and just laugh about it.. thats a literal fact, ive had enough conversations with iphone users about ‘why?’ and its totally true. nobody wants to ‘divorce’ the tech they use, because it is just too disruptive to their lives.. take away apple gadgets, and society enters a mini ‘dark age’. its disturbing and wrong, but thats the reality of it.
smartphone technology should be an EXTENSION of capability, not the ONLY MEANS of getting things accomplished. but the ‘creep’ has gotten worse and worse.. i worked at a major company and they required all of us to download an app called ‘PING ID’ to ‘verify’ yourself.. just to access our relevant accounts and conduct normal functions.. and that REQUIRED a smartphone.
what is the purpose to ‘techify’ everything?
its really just lazyness amplified to the Nth power..
oh my iphone does everything for me.. it wakes me up, tells me what workout i should do, pays my bills, orders/delivers my groceries/food, plays my music, locks my doors.. etc etc etc.
where does it end??
ill tell you…
a sentient species that outsources its own THINKING (to AI or some ‘superintelligence’) repudiates the very essence of the ‘sentience’ it was born with. this is the ultimate insanity, and yet.. its coming.
Forest Gump Market:
To be that guy who buys some kind of fruit company when it starts up….(Apple), or for too many investors, ‘Stupid is as stupid does’.
Me? Never gambled and don’t go to the poker nights with my math buddies who I know damn well will fleece me.
Always thought a good stock was a company that made a needed product or innovated and was looking for some base financing to get up an running, then you were in it for a long haul, experiencing mutual prosperity.
Quaint idea, isn’t it?
But these companies hardly ever lose your investment. So how is it gambling?
It’s investing because you will get your investment back if you stick with the company over time. Hopefully they give you 5-10% a year return on it as well.
Many stock ‘investments’ will result in 100% LOSSES for the shareholders who bought them and we can put up a very long list here of those stocks which have already gone bankrupt.
Any risk investment (stocks etc.) that underperforms the risk-free rate (treasuries) is essentially losing money.
It does not look to me like as end of bubble/bull run. Last week when was top, the VIX needle was in the middle. More like a pullback caused by politics. It has been about time to take a breather. Who said that all should go up in the straight line?
Totally agree that the fake rotation hype is engineered to suck speculators into thinking small zombie companies are headed into glory — versus continuing to burn cash, as rates remain higher for longer.
Before surging to wolfstreet this morning, I had the great fortune to chase a recent link to a Ray Dalio chart from early 2022 — which I think helps to clarify the stupidity related to small caps suddenly being hyped:
The Changing World Order: The New Paradigm
“ More recently, the COVID-triggered downturn and the political move to the left has led to a massive increase in debt creation and debt monetization in the US (and other countries).@
His chart zooms out or back to 1900 then to 2021, which sets up his narrative about the Covid left — leaving out the narrative about the right.
IMHO, the increase in debt and deficits has been the result of policies by both tribes and easily seen in policy changes near the GFC, when moral hazard was tossed out the window.
Instead of blaming any one party, Covid was a game changer which ended up causing serious inflation — resulting in higher interest rates.
Along the way of our uneven Covid recovery, growth has been synthetically enhanced by excess fiscal stimulation, which has resulted in economic resilience — and a higher for longer deficit — and higher for longer interest rates — which are destructive to companies that are low on cash.
Part of Dalio’s advice was to get out of cash:
“ You aren’t getting an interest rate—why would you keep your money there? You are guaranteed to get lousy rates, particularly on cash. The charts below show that you are basically going to get the worst interest rates ever in both inflation-adjusted and nominal terms.”
Fast forward to 2024 — money markets and short bonds are delivering decent returns — but, refinancing costs for little zombiie companies are causing a huge spike in bankruptcies.
To me, the bottom line related to post covid has always been cash burn. With all the resilience and strong economy narrative, I’ve always had faith, that the lag effect of higher rates will eventually have consequences — especially with inflation not back in the bottle.
I’m curious about future CPI base effects and the possibility of unemployment revisions around September — both of which make me think there’s a better chance of magnificent big caps falling back to subpar small cap ranges.
Meanwhile, the deficit reality isn’t going to disappear and it definitely doesn’t create a case for strong growth ahead.
That $1.3T changed hands from those who thought it was a good time to buy to those who thought it was a good time to sell. The former are cancelling vacation plans and the latter are looking at new cars. Someone bought each of these stocks at the absolute recent peak and was hoping there’d be yet another greater fool along shortly.
$1.3T didn’t change hands. It just mostly disappeared.
Actually, it never existed in the first place. Market capitalization is the aggregate number of a company’s shares times the price of the latest trading price of those shares. Most of any company’s shares never trade at all and the concept of ‘market capitalization’ tends to produce utterly bogus number at which a company’s shares could never be cashed out in any marketplace.
This. All manner of errors stem from simplistic associations and misattributions thanks to widely misunderstood metrics like this one.
Learned something today, thanks!
A huge amount of the ‘betting’ these days is on stocks in the major indices, particularly the DJIA 30 and NASDAQ 100 which comprise less than 130 stocks out of the around 7,000 public stocks traded in the US. Enormous outsize moves can and do happen on these index stocks now.
Wolf wrote: “The week was marked by the continued tech sell-off and the wilting of the hugely promoted “rotation” into small-caps:”
I think the key word there is “promoted”. This sounds like a classic pump-and-dump.
Who was running this promotion ? Knowing who was running the promotion would give us forewarning about whose advice should be avoided.
Everyone following the old scripts. My take is that the old scripts are somewhat outdated. Now the big tech is the new blue chip. Etc. I ditched my small cap’s diversification quite time ago.
Value investing including not buying stocks beyond a reasonable PE (Price/Earnings) multiple of around 5 to 15 will never in any way be outdated at all.
More like: large cap must rotate to small cap thingy.
Meaning that the PE 10 can stay, or worse, this way for a long time.
Rather than think about what you call Wall St. hype, consider what it’s like being responsible for news alerts in the financial sector. If you have nothing to say, you’re days of employment are numbered. How long would a news service survive if it sent word that nothing much has happened for a few days straight? People want to hear the latest b.s. morning, noon and night. Why else do we check for the latest on Wolf St.?
If a meme about some asset or business idea is generated by someone, and gets a lot of reaction, it’s inevitable that most reporters will not want to be late to report the same or generate a new wrinkle. Bit of an echo chamber. It’s inevitable if you’re making a living reporting news. I don’t see it as a scam. It’s a human condition. If you can’t deal with the flurry of conflicting business news, just listen to music.
Insanity Bubble Update: The market capitalization of the S&P 500 stands at $46.20 Trillion, that equals $5775 for every man, woman and child on the planet. That is not all US equities, just the S&P 500, the chart of which looks like one side of Mount Everest.
I’m going to be play oddsmaker, and say that a return to 4500 at some point is a lock, 4000 is a coin toss, and a test of the last bear market low (the SPY briefly dipped below $350) a very real possibility. The top seven stocks having a valuation of over $15 Trillion is simply incomprehensible, this is irrefutably yet another major tech bubble that is going to burst like every one of the previous bubbles.
All at a time when the total money supply in the US is only around $20 trillion and the balance sheet of the Federal Reserve is only around $7 trillion, proving how totally laughable and bogus the stock market valuations and ‘total capitalization’ are now.
It’s just money flow related. People got scared and changed their investments.
Again all these stocks will be $1000+ by 2035. I’m pretty sure they do not want poor people owning them, so my thinking is $1000+ would do that.
People struggling will just go bet on rigged sports instead of actual good investments.
What is rotating here is money into the pockets of the well-positioned few, and the middlemen, from the pockets of the late-arriving believers in the latest nifty (get-rich-for-nothing or don’t-be-left-out) stocks narrative.
Got a call from my sister-in-law a few weeks ago. She works at Walmart, her husband works in an HVAC factory, they live in a mobile home park and suffered a personal bankruptcy a few years back. She was calling, asking me if I had any ideas about an ipo that a friend of a friend was recommending…
Trickle down economics.
Seemingly reminiscent of the J.P. Morgan shoeshine boy anecdote.
Tell her to go all in, go big or go home. If she doesn’t buy now, she’ll miss out on another google, Amazon, Tesla..etc
There might be a small possibility it will end up like Beyond Meat, Dave or SunPower but since the market is made up of hopes and dream power, the odds of another Nvidia is better than ever..
I read that the very brief small caps rally last week was largely attributed to shorts covering their positions.
mostly with some momenum riders and machine repositioning catching shorts off guard. Classic.
I don’t know but I think it would take a lot, say from the institutional investors, to get the Russell 2000 out of its funk. It seems like it was the stimulus fueled retail buyers that gave it the run in 2021 and then the big money sold, leaving retail either trapped long like me or out with loss, so they either don’t have any much buying power or don’t want to get burned again and that’s why the recent GME pump and dump attempt fizzled out. Plus the small caps have little passive 401k contributions, and a substantial portion of thm supposedly have no profits. So I just chuckle when the rallies fail yet again, and will sell if I can get back to black.
Uh, incorrect. I have a brokerage account underneath my 401k where my funds are directly assigned. I can buy individual stocks, and I assume funds and etfs, on a cash basis. My WPM and SRUUF have done ok.
If you want to do the same, inquire whether your company allows brokerage link. I think I have had it over 17 years.
I was referring to what is probably a large majority of 401k contributions which are auto buying of target date funds by employees who have not been informed that stocks are very overvalued, so mostly s&p500 type combined with bond funds. Speaking of brokerage link, they recently added that to my HSA, however I can’t buy us treasures or even money market funds which to me is contrary to the spirit and purpose of self directed. Funny thing is they say they don’t allow debt instruments in the HSBA, but they have plenty of bond funds to pick from that contain lots of lower credit bonds than the AA+ us treasuries I wanted to invest in.
I had to request the self-direct option from my employer but it’s great. My self-direct account is also ‘under’ the main account and I can xfer funds between the two.
I just wish I could keep more than 70% of the balance in the self-direct. At least the high-yield bond fund in the main account gives be about 9% apy.
Interesting to see SUURF going up in the last year. I was trading in and out of it between $10 and $15 back in 2022.
NVDA rippin back to 130 this week looks like
“[$1.32T] used to be some serious money.”
Inflationary mindset.
As a market watcher, what strikes me the most — is the process of seeing a ridiculous amount of sideways activity.
I think a lot of prognostication tools and metrics are collectively unreliable and if anything, not better than looking at tea leaves swirling in a daily cup.
I think a google search would result in billions of hits for investment advice or at least people connected to efforts to hype extensive insight into trends, patterns, cycles, etc.
Wolfstreet reporting is far more useful than MSM hyperbolic sensationalism and swings from catastrophication and excessively pathetic euphoria.
Back to markets trending sideways — obviously some major indexes show happy gains over five years, but I find it challenging to justify why I should jump into the Russel now, just to hit a likely decline in the next few months.
I don’t want to get into cost averaging and then wait ten years to smooth out volatility — what’s the point — especially with recession storm clouds in the horizon.
I think every market and stock has been in a bubble for years and the level of distortion from ai has destroyed the premise of diversification — if anything, being suckered into buying now, is a guarantee that cost averaging later, will be the only way to recoup losses.
As usual, for the time being, waiting in a money market and waiting for a reasonable price decline in stocks is the only way forward for me. I need the bubble to pop, before going into the casino.
7 stocks making almost all the profits in the market and the rest sucking wind. What a great foundation. Kind of reminds me of 1999.