There are few places to hide. Asset classes that were in a bubble, from SPACs to Cryptos to probably even art and baseball cards, are now somewhere post-Bubble. We are now on the other side of the 12 year long Bubble-Blowing Bull Market. And the question is: does it just keep crashing now or does it stabilize if not outright bounce right back to the highs?

I don’t think the crashed speculative assets are about to bounce back to their all-time highs from last year. Ethereum and Bitcoin are down double digits today and are now down 50%+ from the all-time highs there were putting in just ten weeks ago. ARKK is going open this morning down almost 4% and 35% from their recent high (not all-time high) from November. It’s going to be a tough road for these and many other assets to get back to those all-time highs.

I got very defensive back in November as it felt like a classic blow-off top in semiconductor stocks and cryptos and other assets, but I expected a slower churn lower, not this crash that has ensued for many of these assets in 2022. I’m finally starting to get excited about some of the valuations I’m seeing in Revolutionary-type stocks and I expect that nibbling through the rubble here and starting to build some positions in the right stocks will create some legendary gains in coming years. But it won’t be easy and it won’t be painless trying to get there. We don’t want to try to time the bottom (which will be impossible anyway), but let’s remember that it’s only with these kinds of broad-based crashes/sell-offs that we can get the opportunities to buy great stocks lower than we would have otherwise.

I have preached keeping cash and staying cautious and/or even having some shorts and hedges on for a while now, even before I got more defensive back in November. I’m deploying some of that cash now into these declines and am doing so again a little bit here before the open this morning as stocks are indicated lower across the board again. No rush and I’m not going to draw a line in the sand, but I’m getting less cautious and more excited about the opportunities here. Today, I’ve bought partial tranches (maybe 5-10% of how much I want to own) in the following names for the hedge fund and/or for the personal account: FB, GOOG, IONQ, SKLZ, SNAP, TWTR, U, UBER, W.

Keep perspective and look at the car window frame, the tumbleweed, the fence, the mountains, the mountains further back, the clouds, the sky. See you up there.

We’ll do this week’s Live Q&A Chat Wednesday at noon ET in the TWC Chat Room or just email us your question to support@tradingwithcody.com.