#151 - No Place to Hide as Canadian Housing and Oil Take A Dive
In this week's episode of Reformed Millennials, Joel and Cam talk Markets, Elon vs. Donald, the new BMW business model and what to expect in NHL free agency.
PS: The links at the bottom of the newsletter are fantastic this week.
If you aren’t in the Reformed Millennials Facebook Group join us for daily updates, discussions, and deep dives into the investable trends Millennials should be paying attention to.
👉 For specific investment questions or advice contact Joel @ Gold Investment Management.
Quick recap from Charlies Bilello - 10 chart Saturday
The week after the 4th of July is always seasonally strong for stocks.
This year was not any different.
All major stock indexes gained ground. The Nasdaq 100 rallied to its 50-day moving average. The worst-hit groups in the past year and a half went up the most:
What’s more interesting about last week’s price action is that the strength in so many high P/E and high P/S companies came in the face of rising interest rates and an increasingly hawkish fed / bank of Canada.
Rising interest rates have been a tailwind for oil & gas stocks and a headwind for tech in the most recent past. The next week or two will tell us if the correlations have changed as Treasuries have been a leading indicator.
There are not many stocks trading near their 52-week highs.
Two main groups are standing out so far – biotech like HALO, HRMY, CORT, UTHR, VRTX, VIVO and defensive stocks like pharmaceuticals LLY, MRK; health care plans like HUM, CI; consumer staples like GIS, DG, DLTR and PEP. Most of the latter are low-growth, slow movers. There are only a handful of high-growth names that are setting up – SWAV, LNTH, CELH, FNKO. The solar industry certainly stood out as a group last week with notable breakouts in ENPH, SEDG, JKS, and DQ.
Do with this change as you will but I think it tells a transition in the catalyst story.
The market is now chopping as it works out whether inflation, recession or both are going to be the result of this tightening cycle.
The Car Industry Is About To Change Forever
tighter secondary markets
better shopping experience for customers
more predictable earnings for analysts and investors and…
zero marginal revenue cost attributable to the companies bottom line
💸Reformed Millennials - Post of The Week
Why do we get booms and busts in risk capital? What has happened over the last 6 months?
I ALWAYS LEARN SOMETHING NEW WHEN I TUNE IN FOR PROF DAMODARAN.
In this 23 min lesson, he presented relevant historical evidence, which investors with different investment philosophies can use.
For value investors, keeping in mind that history doesn't have to repeat and the long-term horizon doesn't have to yield profit, a long recovery is more beneficial to start building up your stake in some big names, which were punished badly.
For growth investors, he talks at length about "going where it's darkest". But the most difficult task is to figure out the story or sustainability of some business models and avoid the "value traps".
🐦 Twitter Thread of The Week 🐦
"Two holes. That’s the symbol for the face, enough to evoke it without representing it. But isn’t it strange that it can be done through such simple means? Whatever is most abstract may perhaps be the summit of reality.” - Pablo Picasso
Below are the 1st, 4th and last stone print. The bull progresses from:
a realistic drawing
to a deconstructed image w/ the famous "abstract" style
to lines outlining a shape Through 11 iterations, Picasso simplified the image until it captured the "essence" of the bull.
🔮Best Links of The Week🔮
Some Thoughts On Twitter - Fred Wilson
Stay out of the rabbit holes - Josh Brown
Aggregation Theory for Spotify & Netflix - Ben Thompson
What you should buy in a bear market - Ben Carlson
Last year, senior members of Freshii — including founder Matthew Corrin — quietly began testing a software called “Percy,” a video-calling device attached to cash registers at select franchise locations. - Toronto Star