Down goes the Dow

Ghost of Igloi wrote:

Seattle,

OK, I’ll bite since you are one of the good guys. The trolling to my handle here and on the Masters thread has become so weird I am no longer posting on a regular basis. I am one of the longest posters on LRC with the same handle, going all the way back to May 9, 2006. Back then the trolling was in fun, and not the viciousness of recent years. If one wanted to motivate me to be more personally productive, the trolls were good for that, and for that thank you. I haven’t exercised this much in years, so that is good.

Now to my positioning and view since I last posted in early April. Fortunately in mid to late April I sold my NVDA single stock short ETF up 26% and Tesla single stock short ETF up 6%. I moved proceeds to SPXS, SOXS, and TECS, trading around them and selling some HSGFX up to add to position. I was about flat at Wednesday market close, and sold throughout the day. Today, I sold the SPXS position, still up slightly, with proceeds largely split between TECS and SOXS. I will go a little further leveraged short to ~20%.

AI will likely take years to be a transformative investment. Meanwhile CEOs have taken the unconscionable position of hyping their stock’s AI prospects in earnings calls. To the point where investors are counting the times AI is mentioned. The same hysterical mania we saw in meme stocks, crypto, cloud, FANG, ESG, ARKK, etc. Keep in mind NVDA had revenue down 13% from a year ago. These CEOs and other insiders make most of their wealth from stock based compensation. Unfortunately through buybacks and insiders selling back into the market. An incestuous relationship.

A debt ceiling resolution will likely take some froth out of tech and rotate to value, or under performers. Even if all the above is misguided, a recession will likely hit the highest valuation stocks the hardest. That is my view. If that view proves wrong I will reduce leveraged short positions down to 5-10% with proceeds split half to HSGFX and 6-12 month CDs.

Good luck to you and the other normal posters. I will go back into hiding lest the loons return.

Igy

Sent from my six year old iPad

Sally Vix wrote:

Ghost of Igloi wrote:

Seattle,

OK, I’ll bite since you are one of the good guys. The trolling to my handle here and on the Masters thread has become so weird I am no longer posting on a regular basis. I am one of the longest posters on LRC with the same handle, going all the way back to May 9, 2006. Back then the trolling was in fun, and not the viciousness of recent years. If one wanted to motivate me to be more personally productive, the trolls were good for that, and for that thank you. I haven’t exercised this much in years, so that is good.

Now to my positioning and view since I last posted in early April. Fortunately in mid to late April I sold my NVDA single stock short ETF up 26% and Tesla single stock short ETF up 6%. I moved proceeds to SPXS, SOXS, and TECS, trading around them and selling some HSGFX up to add to position. I was about flat at Wednesday market close, and sold throughout the day. Today, I sold the SPXS position, still up slightly, with proceeds largely split between TECS and SOXS. I will go a little further leveraged short to ~20%.

AI will likely take years to be a transformative investment. Meanwhile CEOs have taken the unconscionable position of hyping their stock’s AI prospects in earnings calls. To the point where investors are counting the times AI is mentioned. The same hysterical mania we saw in meme stocks, crypto, cloud, FANG, ESG, ARKK, etc. Keep in mind NVDA had revenue down 13% from a year ago. These CEOs and other insiders make most of their wealth from stock based compensation. Unfortunately through buybacks and insiders selling back into the market. An incestuous relationship.

A debt ceiling resolution will likely take some froth out of tech and rotate to value, or under performers. Even if all the above is misguided, a recession will likely hit the highest valuation stocks the hardest. That is my view. If that view proves wrong I will reduce leveraged short positions down to 5-10% with proceeds split half to HSGFX and 6-12 month CDs.

Good luck to you and the other normal posters. I will go back into hiding lest the loons return.

Igy

Sent from my six year old iPad

Igy - Am happy to hear you are doing well. Good to hear from you. Am curious how you made money on shorting TSLA and NDVA selling in April when they have going like gangbusters.

seattle prattle wrote:

agip wrote:

holy mother of Pre. That one is probably heavily shorted too, so it could go and go and go.

what a great market leader NVDA is. Will help optimists believe AI is truly going to be a long-term corporate spending boost.

Up 25% now. Good lord that's a lot of value created instantly.

Yeah, isn't that the truth.

In researching this space, I've come across another couple that ride the same AI wave.

One is CS.ai inc. (AI) and I was lucky enough to buy a little of that a couple of days ago. Another is UPST (no position). The analysts also say Alphabet (google) and Microsoft are the 1000 pound gorillas in that sector, though Nvidia is right up there amongst them. Lastly, Synopsis is another more broadbased play as I've mentioned a few weeks ago. And they even mention Facebook (Meta) as benefitting in this area.

As I see Apple flatlining recently, I have to wonder if some investors are doing a tech intra-sector rotation into the AI plays and taking profits on the prime mover in the tech sector, Apple. Just a hunch, though.

Sally Vix wrote:

You guys might find this interesting - of the top 10 performing stocks of the last 10 years, only 3 are tech stocks ...

When investors think about the best-performing stocks over the past five years, the FAANGs come immediately to mind. You know: Facebook (now Meta), Apple, Amazon, Netflix and Alphabet-owned Google.
Turns out, though, that the world’s 10 top-returning stocks include only one FAANG member: Apple, which after all is the most valuable U.S. company. The list was compiled by Forex Suggest, the European stock and currency trading platform.
All but one are American, which makes sense because the U.S. has had the best-performing stock market for some time. Just three of them are tech—understandable, as that sector has gotten slammed this year.
The leading 10 are, in descending order: Tesla, Nvidia, Apple, Eli Lilly, Microsoft (sometimes combined with the one-time tech hot stocks, to form FANMAG, or other iterations), Danaher, Thermo Fisher Scientific, Costco, Adobe and LVMH (the French luxury goods maker and the lone non-U.S. stock on the list). Their five-year returns range from Tesla’s 1,011% to LVMH’s 184%.
Electric vehicle maker Tesla leads the list with that incredible surge since 2017. This mean that a $20 investment back then would be worth $222 these days. Wall Street is very optimistic about Tesla’s prospects. Although founder Elon Musk has dubbed his new factories “money furnaces,” expectations are high that they will be key to growing demand for the cars.
Chip company Nvidia makes a product that has been in short supply, although that is gradually changing. Still, the world runs on semiconductors and Nvidia has a great reputation for delivering. Over the past five years, the stock rose 362%, thus that $20 investment would’ve mushroomed to $92.