Seeing a lot of comparisons being made to the drawdown in the markets to December 2018.
While there are some similarities in reasoning, the backdrop today is quite different and brings us to look into a lot more variables.
Lets dive in 🧵👇... $SPX $QQQ
While there are some similarities in reasoning, the backdrop today is quite different and brings us to look into a lot more variables.
Lets dive in 🧵👇... $SPX $QQQ
1/ Inflation: t̶r̶a̶n̶s̶i̶t̶o̶r̶y̶ 📈
🚗 - Used cars pricing > 25%
🏠 - Home prices ~20% increase
⛽️ - Oil up >50%
🍲 - Food prices >5%
CPI Index increased 6.2 percent from October 2020 to October 2021, the largest 12-month increase since Nov 1990.
🚗 - Used cars pricing > 25%
🏠 - Home prices ~20% increase
⛽️ - Oil up >50%
🍲 - Food prices >5%
CPI Index increased 6.2 percent from October 2020 to October 2021, the largest 12-month increase since Nov 1990.
2/ Rising rates 🏦
While the Fed had 4 rate hikes in 2018, we had international trade uncertainty, Brexit, an attempt to front run economic growth and more.
Today the story and narratives are different.
While the Fed had 4 rate hikes in 2018, we had international trade uncertainty, Brexit, an attempt to front run economic growth and more.
Today the story and narratives are different.
2/a Tapering 💲
What we deal with today are unprecedented times.
- Global pandemic
- Rapid inflation
- Economy that has snapped out of a crash faster than ever
Fed's latest hawkish comments are one of the few options they have to try and curb inflation.
What we deal with today are unprecedented times.
- Global pandemic
- Rapid inflation
- Economy that has snapped out of a crash faster than ever
Fed's latest hawkish comments are one of the few options they have to try and curb inflation.
3/ Multiples contraction 🔢
When the cost of capital goes 🆙, multiples come ⬇️.
The past month we have seen 30-50% drawdowns as in many growth / tech names.
Snapshot of sales multiples over the years $QQQ
When the cost of capital goes 🆙, multiples come ⬇️.
The past month we have seen 30-50% drawdowns as in many growth / tech names.
Snapshot of sales multiples over the years $QQQ
https://twitter.com/TaviCosta/status/1466602541546758145?s=20
4/ Record selling among executives / insiders 💰
"CEOs and corporate insiders have sold a record $69 billion in stock in 2021"
@chamath sums this up perfectly, when some of the best capital allocators are selling...
"CEOs and corporate insiders have sold a record $69 billion in stock in 2021"
@chamath sums this up perfectly, when some of the best capital allocators are selling...
https://twitter.com/chamath/status/1461453308623659010?s=20
5/ Crypto and Web3 ⛓️ rise
In 2017/2018 crypto was far from being widely accepted and adopted.
Today, we are seeing it being backed by several institutions and some innovative use cases of the blockchain and web3. #Bitcoin
In 2017/2018 crypto was far from being widely accepted and adopted.
Today, we are seeing it being backed by several institutions and some innovative use cases of the blockchain and web3. #Bitcoin
https://twitter.com/rhemrajani9/status/1449903603678957573?s=21
6/ Climate change / EV growth ⚡️
In 2018 - @elonmusk thought about taking $TSLA private, today $TSLA is at the forefront of EV adoption.
In 2018 - @elonmusk thought about taking $TSLA private, today $TSLA is at the forefront of EV adoption.
https://twitter.com/rhemrajani9/status/1464327838862032901?s=21
7/ Conclusion 💭
I have no crystal ball on where we head from here. What I do know is, you have to MANAGE your risk, and focus on doing your own DD.
Do you look at the below before purchasing a stock ?
I have no crystal ball on where we head from here. What I do know is, you have to MANAGE your risk, and focus on doing your own DD.
Do you look at the below before purchasing a stock ?
https://twitter.com/rhemrajani9/status/1466620519948554242?s=21
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If you enjoyed this 🧵 please retweet for others! I write about the markets, EV's, growth stocks and crypto✍️
If you enjoyed this 🧵 please retweet for others! I write about the markets, EV's, growth stocks and crypto✍️
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