NDX has fallen below the 50 Day Moving Average. The lack of support zones, plethora of gaps, high valuations and heavy selling volume can cause Nasdaq to see a longer correction of -10% to 25%. Nasdaq can fall back down to the September highs or the September lows. If the Nasdaq ETF falls by this much, individual stocks will fall by a lot more. Especially those, that have floated up like "bubble".... I believe shorting these type of stocks will provide better entries and a higher risk to reward than shorting indices or longing Volatility (UVXY,VIXY - these are based on VIX futures in contango)
The US Ten Year Yield is now at 1.5%; the same yield as SPY's Dividend. This leads to the question: What asset is safer to guarantee the 1.5% yield? US Treasuries obviously. The Market rally we have seen since April was mainly based on the artificially low rates present. Lower rates justified the purchase of growth assets with high valuations. High Yields pose corporate credit problems and undercut the present value of future earnings of Growth stocks. Higher rates erode the value of future cash flows, for growth companies more than mature "value" businesses because growth companies expect to see a large share of their profits come farther down the line. Smaller, less profitable growth names are most sensitive because they are largely less profitable at present. The formula for Calculating Net Present Value = ( ()/(1+)^t). The bigger the r (yield) is for every future time period the larger the decrease in Cash Flow will be for that time period. A lot of the SPAC's we have seen come up the last couple of months will get hurt imo. Further weakness in Bonds could drive rates higher, potentially to 2%. www.treasurydirect.g...021/R_20210225_3.pdf - the results for the 7 year Bond Auction were horrendous with a record low bid to cover.
Fiverr, Lemonade, Square, Wayfair, Cleveland Cliffs, Roku, Enphase, Penn Gaming are all high flying stocks with extreme valuations. Most of their value comes from optimistic financial projections. Higher rates cuts into their estimated revenue and makes operating expenses more expensive reducing profitability. I will be watching these stocks for further downside confirmation. I expect there to be some sort of relief rally presenting an opportunity to enter these shorts. I urge everyone to look at the financial data for these companies to fully understand how much of their value comes from future earnings, revenue and growth.
Assuming Nasdaq goes down to the September lows/highs a drop of roughly 15%. If Growth stocks were to drop to their September High/Lows this would equate to a drop of 30-50%. When "bubbles" fly too high they pop.
The US Ten Year Yield is now at 1.5%; the same yield as SPY's Dividend. This leads to the question: What asset is safer to guarantee the 1.5% yield? US Treasuries obviously. The Market rally we have seen since April was mainly based on the artificially low rates present. Lower rates justified the purchase of growth assets with high valuations. High Yields pose corporate credit problems and undercut the present value of future earnings of Growth stocks. Higher rates erode the value of future cash flows, for growth companies more than mature "value" businesses because growth companies expect to see a large share of their profits come farther down the line. Smaller, less profitable growth names are most sensitive because they are largely less profitable at present. The formula for Calculating Net Present Value = ( ()/(1+)^t). The bigger the r (yield) is for every future time period the larger the decrease in Cash Flow will be for that time period. A lot of the SPAC's we have seen come up the last couple of months will get hurt imo. Further weakness in Bonds could drive rates higher, potentially to 2%. www.treasurydirect.g...021/R_20210225_3.pdf - the results for the 7 year Bond Auction were horrendous with a record low bid to cover.
Fiverr, Lemonade, Square, Wayfair, Cleveland Cliffs, Roku, Enphase, Penn Gaming are all high flying stocks with extreme valuations. Most of their value comes from optimistic financial projections. Higher rates cuts into their estimated revenue and makes operating expenses more expensive reducing profitability. I will be watching these stocks for further downside confirmation. I expect there to be some sort of relief rally presenting an opportunity to enter these shorts. I urge everyone to look at the financial data for these companies to fully understand how much of their value comes from future earnings, revenue and growth.
Assuming Nasdaq goes down to the September lows/highs a drop of roughly 15%. If Growth stocks were to drop to their September High/Lows this would equate to a drop of 30-50%. When "bubbles" fly too high they pop.
تعليق:
ZEN,LULU,AVYA,INOD,LAZR,CAT,CROX,CVNA,PLUG,MSI,TEAM,PLAN,M,BBBY,PYPL,TSLA,MARA,MVIS,NIO,OKTA,TWLO,ICLN,DASH,GDDY,CRSP,ARKK
تعليق:
*Edit* The Formula for Calculating Net Present Value = ( ()/(1+)^t). It is the aggregate of the future years' cash flow divided by the discount rate. A higher rate means it would be more expensive to borrow money/more risky.
تعليق:
* ( (CashFlow,t)/(1+r,t)^t)
تعليق:
I had chart analysis on the all of the charts but, it only showed up on the top two.:(
LMND - LMND ipo'd in July, they have a very high valuation 70 times forward revenue lolololol
FIVERR - 8 billion mkt. cap yikes!!!
SQ - 300x P/E
Wayfair - $3 loss per share
Roku - EV to EBITDA ratio of over 150
CLF - PB Ratio (7.1x) compared to the US Metals and Mining industry average (2.5x).
ENPH - up 1000%
PENN - up 3000% not profitable
LMND - LMND ipo'd in July, they have a very high valuation 70 times forward revenue lolololol
FIVERR - 8 billion mkt. cap yikes!!!
SQ - 300x P/E
Wayfair - $3 loss per share
Roku - EV to EBITDA ratio of over 150
CLF - PB Ratio (7.1x) compared to the US Metals and Mining industry average (2.5x).
ENPH - up 1000%
PENN - up 3000% not profitable
