It is Monday which means Ivanhoff and I have done our tour of the markets looking for momentum and the clues to what looks good right now.
Incredibly, the can’t find much to worry about – with respect to prices – so for this week we decided to just completely go with the flow.
Below, I will share a bunch more charts and links below that try and capture this moment of market joy and nirvana.
Here are Ivanhoff’s summary thoughts:
Here are the best-performing sectors last week – energy, cleantech, cannabis, biotech, small caps, semis, large-cap tech. A wide variety of winners. We are in the sweet spot where the markets are simultaneously trying to discount the impact of a working COVID vaccine and the new social distancing restrictions around the world. As a result, almost everything is going up, except gold and the U.S. Dollar.
There’s a hint of hubris in the market. It is not only the electric vehicle stocks that have gone wild. Some recent IPOs in the software and equipment space have defied gravity too- PLTR, SNOW, U, CRSR, etc. Many SPACs have also been on the move. It’s a bit frothy. And yet, there are still plenty of long setups. I expect any corrections to be shallow and take the form of sector rotation.
If you are confused by the continued rise in prices, you are listening to too much financial television or reading too many ‘experts’ and ‘analyst’ reports.
Ivanhoff and I keep it simple each week and focus on prices.
There are so many fascinating individual stock price moves this year and last week that it is hard to know where to begin….BUT 2020 is still the year of Tesla. No stock has ever bent more minds and last week the market cap of Tesla surpassed Berkshire Hathaway to become the sevent largest company in the world.
The Tesla mania has turned into all kinds of electric vehicle froth, but it is all way over my pay grade to judge or cast dispersions on what the hell is going on in the Chinese markets and people’s brains hopped up on these stocks.
Yesterday I did my long Sunday ride in North Scottsdale. It begins with a 10 mile climb up Pima Road to Carefree and my good friend Jono and I decided to count Tesla’s. Yesterday there were at least 20 percent if not 30 percent Tesla’s passing us in both directions. Jono owns one himself and loves it.
I imagine my next car will be one too. Only Tesla can beat Tesla at this point.
Next up….let’s look a little closer at the ‘froth’ and ‘mania’ which can be summarized by this chart of Grayscale’s Litecoin Trust (from Charlie’s weekly 5 chart Friday):
I look forward to checking back on this 90 days out.
The incredible thing about this recent period of strength, froth and mania is the lack of FAANG attention. We had been told that when FAANG stops going up so too would the market.
In fact, FAANG has just been digesting massive five year gains while they each retool to attack each other. The real battle is brewing in e-commerce.
All one has to do is open the Instagram app which in 2020 has been retooled as a shopping app. This thread from Chris Messina summarizes it best. Facebook has been listening as best a planet can do and it feels like 2021 will be the year of e-commerce as they chase down Amazon and Shopify ($SHOP), $ETSY, Farfetch ($FTCH), $LULU, Peloton ($PTON), Nike ($NKE) with their own e-commerce ambitions. I would not be surprised to see massive acquisitions take place as the positioning continues.
I will end with some links that might help explain the incredible technological advancements in semiconductors that continue to provide the foundation of this boom in software, ecommerce, hardware, AI, gaming and communication.
Here is Om on Apple’s M1 chip.
One more OM piece ‘It’s Time to SOC The CPU.’
‘How a Handful of Chip Companies Came To Control The Fate Of The World‘ by NZS Capital.
Semiconductors are The Closest Thing to Magic In The Modern World – a great interview with Gavin Baker.
Have a great week everyone.
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