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Puru Saxena

@saxena_puru

8 Dec

Indices still near ATHs but big drawdowns in growth stocks!

$AFRM -45% $CRWD-32% $DLO -60% $FVRR - 65% $GLBE -43% $LILM -60% $LSPD -65% $MELI -49% $MQ -60% $OKTA -34% $PATH -54% $ROKU -60%
$S -45% $SE -37% $TWLO -48% $UPST -60%

Buying over next 6-8 weeks = decent 5-yr IRR?

If the CPI print stays elevated and the Fed tightens rapidly, stocks likely to come under pressure over the next 2-3 months.

However, with massive drawdowns in growth stocks already behind us, weekly buying over next 2-3 months should reduce anxiety and deliver decent 5-yr IRR.

The indices not telling the story but November was a brutal month for high growth stocks!

ARK ETFs declined ~30% and many growth names tanked 40-60% in ONE MONTH!!

Markets are becoming super fast; the discounting machine is becoming more efficient.

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Puru Saxena

@saxena_puru

7 Dec

After recent carnage, forward EV/revenue multiples for some high-growth ecommerce, fintech and software companies have almost reverted to their pre-COVID highs.

These stocks likely to remain volatile over near term, but should hand out decent returns over the next 4-5 years.

Gradual scaling into these stocks over the following couple of months likely to deliver good long-term IRR.

Those companies which are still richly valued remain vulnerable to multiple compression (due to tight Fed), so the risk/reward in those stocks is still unfavourable.

Bear-markets don't go down in a straight line, they are interrupted by sharp relief rallies.

In Nov, ARK ETFs declined by ~30% and after Monday's panic open, I covered my short positions. After relief rally, will short again.

Still feel risk assets will deflate for few weeks.

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Puru Saxena

@saxena_puru

5 Dec

Update on the "open offer" -

The wager ($1m-$5m) to get my returns verified has now been available for ~24 hours and so far, none of the haters have come forward and put their money on the table.

These cowards can only hide behind anonymous accounts + slander others. Pathetic!

The haters were criticising me when I was holding some of the strongest stocks during QE.

Now, they are moaning because I've sold out of all my stocks during the post-QE deflation.

My hedges weren't functioning properly so in order to protect my capital, I raised cash...

What else was I supposed to do? Remain invested like a sitting duck and get killed?

Remember, stocks do not triple/quadruple in 12-18 months and here my entire portfolio went up by ~500% since March '20.

These returns are NOT normal, so with the QE-bust underway, I cashed out.

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Puru Saxena

@saxena_puru

3 Dec

No crystal ball here but am familiar with the monetary cycle and stock market history.

Suspect the selling in high growth stocks likely to continue until multiples revert to around pre-COVID levels and when $NDX $SPX have completed their flush, it'll probably be the time to buy.

As long as the Fed is draining liquidity and reducing asset purchases, risk assets are likely to stay under pressure.

At some point in Q1/Q2, we'll probably get a deflationary event/slowdown/crack in inflation and that should prompt the Fed to reverse course + ignite rally.

For the next few weeks/months, safe havens are likely to be US$ cash and 30-Year USTs.

During asset liquidation/post-bubble contractions, capital usually flows to the safety of the senior currency and sovereign debt market, but obviously anything can happen. Time will tell.

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Puru Saxena

@saxena_puru

1 Dec

1)Portfolio Nov-end -

$ADYEY $AFRM $CRWD $DLO $GLBE $LILM $LSPD $MELI $MNDY $MQ $OKTA $PATH $SE $SHOP $SNOW $TOST $TWLO $U $UPST $ZI #DXY

Short - ARK, $NET

Return since 1 Sept '16 -

Portfolio +714.41% (49.11%pa)
$ACWI +74.08% (11.14%pa)
$SPX +110.40% (15.22%pa)

Contd..

2) YTD return -

Portfolio +28.05%
$ACWI +12.42%
$SPX +21.59%

Biggest positions -

1) $SE 2) $GLBE 3) $MELI 4) $SNOW 5) $TWLO

Contd....

3) Commentary -

November was a brutal month for growth stocks; once the strong CPI print was announced and the Fed began tapering its QE program, ARK ETFs declined by ~20% within 3 weeks!

Fortunately, due to my hedges and shorts in $ARKG and $RIVN, my drawdown...

Read 11 tweets

Puru Saxena

@saxena_puru

26 Nov

The COVID variant getting the blame for the sell-off in risk assets.

Pundits seem to be forgetting that risk assets peaked in early November (after strong CPI print) and the selling has intensified since Fed's taper announcement.

Market has been deteriorating for weeks.

Thanks to unprecedented QE, ecommerce + payments + software + video games and streaming stocks benefited tremendously during the pandemic (their valuations were a lot lower then).

Conditions are very different now - Fed is tightening and valuations are also a lot higher.

Important to ignore the hype + think critically.

Over past year, we learnt about a few COVID-variants but the financial markets largely ignored them because of the Fed's QE program ($120b/month).

Now, a new COVID-variant is rocking risk assets. Why? The Fed is now tapering.

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