I’m back in New Mexico and sitting at my desk. I have a million things to catch up on, dozens of emails, calls and who knows what else in my inbox. So let’s do this week’s Livestream Q&A Chat TOMORROW, Thursday, at 2pm ET when I can be better focused on it.
Meanwhile, I want to remind you each of you to “Sell while you can, not when you have to.” I know some of you were freaking out just last week when the markets were at their lows. We’re still a good bit below the all-time highs that stocks put in back on January 29 (just about a dozen trading days ago!) but it’s been a big bounce.
I’m remaining cautious about the near-term though.There’s been a lot of damage done to the market’s psychology in the last twelve trading days and the recent volatility, I expect, is likely to beget more volatility.
And again, it’s not like I’m turning outright bearish or calling for a crash here. There are still a lot of monetary, fiscal, economic and geopolitical forces fueling the Bubble-Blowing Bull Market and the stronger corporate earnings growth around the globe. Of course, that last sentence is quite accepted and is conventional wisdom right now, unlike when I was predicting this part of the cycle back three or five or especially seven years ago. And that means much of that is ALREADY baked in. And there’s also a lot of leverage added to that stock market pie that could exacerbate the volatility as we saw last week with the 2x, 3x VIX vehicles.
Moreover, three/five/seven years ago I remember thinking about how there would probably never truly be a time when there’d be a sector that would drive the kind of maniacal speculation in small caps and penny stocks like we saw back in dot-com era. At least not in my lifetime. Alas, here we are today, with stocks like Riot Blockchain (RIOT) or Long Island Iced Tea changing their name to something with the word “Blockchain” and “Crytpos” and the stocks go up 500-1000% in day or a week or so. Well, that’s not something you see happening when stocks are at a BOTTOM. It’s something that’s more akin to TOPS.
Anyway, there’s never a sure thing with the stock market or the economy or any of this stuff. But you can be cautious when others are being greedy. And others are being greedy in the blockchain/cryptos for sure. And there’s a lot of complacency if not outright greed amongst the broader stock market right too.
So let’s remember the value of not trading, the value of being vigilant, the value of being prepared.
If you were scared when stocks were getting killed last week, then trim some stocks right now. Lighten up. Maybe add a hedge or two.
I have much more analysis and some insights on our stocks and another name to add to the portfolio in coming days and weeks so stay tuned!