Another great piece this morning. I was intrigued by your findings on strength in small caps and weakness in materials. The former surprises me given signs of an economic slowdown in the US over the next 6-12 months. I have been watching $BILL as a proxy for SMB sentiment and it seems to be plodding along / basing for a few months now.
I also like the question about who will be the new "FAANG" leaders.
Beach - It goes back to some pieces I wrote on Linked In this past week. With more countries looking inwardly right now, as we move away from Globalization, toward a more multi-polar world, and where governments must solve for income inequality, there are opportunities in the US domestic economy that might be greater than for multinational companies. Given small caps have higher leverage (at least at the index level), the recent outperformance might also be the market sniffing out that the Fed is going to pause soon.
I seem to remember some interesting analysis of the top 5 stocks in a given decade performance in the next decade. One of those stocks dissappears, 3 are market performers, and one outperforms. This has present day relevance to GAMMA stocks. I suppose if you polled investors they would be thinking META might be the one that dissappears. What do you think?
I could certainly see that. Even after reading "SnowCrash", I still struggle to see the business model for the metaverse. I am also not sure I am rooting for it as I think too much stay at home and too much computer time has been unhealthy for many people. In this framework, I would guess Google would be the outperformer. With the focus on AI and machine learning, it seems best positioned. Apple, Amazon and Microsoft can plug along.
Excellent post, thank you for taking the time to write it up!
Another great piece this morning. I was intrigued by your findings on strength in small caps and weakness in materials. The former surprises me given signs of an economic slowdown in the US over the next 6-12 months. I have been watching $BILL as a proxy for SMB sentiment and it seems to be plodding along / basing for a few months now.
I also like the question about who will be the new "FAANG" leaders.
Lots to ponder over. Thanks and Happy Halloween.
Beach - It goes back to some pieces I wrote on Linked In this past week. With more countries looking inwardly right now, as we move away from Globalization, toward a more multi-polar world, and where governments must solve for income inequality, there are opportunities in the US domestic economy that might be greater than for multinational companies. Given small caps have higher leverage (at least at the index level), the recent outperformance might also be the market sniffing out that the Fed is going to pause soon.
I seem to remember some interesting analysis of the top 5 stocks in a given decade performance in the next decade. One of those stocks dissappears, 3 are market performers, and one outperforms. This has present day relevance to GAMMA stocks. I suppose if you polled investors they would be thinking META might be the one that dissappears. What do you think?
I could certainly see that. Even after reading "SnowCrash", I still struggle to see the business model for the metaverse. I am also not sure I am rooting for it as I think too much stay at home and too much computer time has been unhealthy for many people. In this framework, I would guess Google would be the outperformer. With the focus on AI and machine learning, it seems best positioned. Apple, Amazon and Microsoft can plug along.