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- Weekend Investor: The Week That Was
I hope you had a wonderful week!
This was the final week of the second quarter of 2023, which means earnings season will start soon. It’s also a holiday weekend, so I am taking some time away early in the week and I will publish one free article and one premium article late in the week along with the weekend article next week.
This time of year is also slow in the market, so I’ll keep this short and sweet!
In case you missed it
Here’s some of the content I put out this week. Enjoy!
Virgin Galactic Spotlight: Virgin Galactic is a high-risk stock, but it’s also a rare company that could transform how we think about an entire product category. In this case, it could change how we think about space. Companies that have that kind of impact on the world are the kind of companies I want to own. The risk/reward profile is attrative enough to take a swing.
The Value Trap: Why have icons of the 1980s and 1990s underperformed the market over the last decade? This is the start of unpacking that answer over the next few weeks.
HBO To Netflix: HBO is reportedly discussing licensing content to Netflix. This seems crazy, but it’s probably the right strategic move, which I covered in this video.
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What a Weird Time
If you only followed the media and economic data, it would seem that the economy both in the U.S. and globally is in trouble right now.
The Fed funds rate is up over 5% over the past 18 months.
Mortgage rates have increased from under 3% to over 7%.
Auto loans have spiked from nearly 0% to over 8% and deals are hard to come by. Many banks are even exiting the auto loan business for the moment.
Home sales have dropped at a faster rate than they did in 2006 and 2007.
Personal debt and debt payments as a percentage of income have exploded to levels not seen since 2009.
Auto inventory is building and demand is dropping, causing price wars in specific segments of the market.
Inflation is coming down, but still well above what the Fed would like.
This means a recession is coming and the market will drop, right?
Wrong! The S&P 500 has returned 16.9% this year and there’s no sign of a recession beginning. This headline from October 2022 was…wrong, wrong, wrong.
This is why we don’t try to time the market. This is why we invest new money consistently in our best ideas, whether stocks seem overvalued or not. This is why we don’t sell because stocks seem overvalued.
We are putting the market’s long-term trends at our backs and riding the wave. As David Gardner said:
Stocks always go down faster than they go up, but they always go up more than they go down.
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Disclaimer: Asymmetric Investing provides analysis and research but DOES NOT provide individual financial advice. Travis Hoium may have a position in some of the stocks mentioned. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.
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