Have you heard about the "disposition effect" aka the tendency of investors to sell assets that have increased in value?
As momentum roll-over, can this #behavioralfinance bias trigger a sell-off of the "Magnificent 7" (Apple, Nvidia, etc.) in teh US and the GRANOLAS (LVMH, L'Oréal, etc,) in Europe?
The Kobeissi Letter - Financial Events in 2023 So Far:
1. Mortgage rates pass 2008 highs at 7.2% 2. Credit card debt set to hit $1 trillion for first time ever 3. Regional bank crisis leads to 2nd and 3rd largest bank collapses in history 4. Fed raises interest rates to highest level since 2001 5. Debt ceiling crisis nearly leads to US default 6. US sees most bankruptcies since 2020 lockdown 7. Interest expense on US debt set to cross $1 trillion annually 8. Fitch downgrades US credit rating for first time since 2011 Yet, the S&P 500 is up an incredible 700 points this year. Is this the most resilient stock market in history? Source: The Kobeissi Letter
Why fees matter, visually:
Source: Brian Feroldi
July was a painful month for the bears
Source: Investing.com
Investors are currently quite bearish on oil and commodities
The risk of higher energy and higher commodities prices in H2 doesn't seem to be priced by the market. Meanwhile, Crude Oil futures are pushing up against new 3-month highs. Could this be the big surprise of the second part of 2023? Source: All Star Charts
Terry Smith investment principles:
1. Buy good companies 2. Don't overpay 3. Do Nothing Source: Compounding Quality
According to the latest BofA survey, fund managers are now UNDERWEIGHT commodities
The last time fund managers were this bearish on #commodities, #crudeoil futures were literally trading below zero. Source: BofA
Become a Millionaire with $300 per month
A visual guide of how compound interest works over time by Mark Wlosinski. It doesn’t take investing a lot of money to build wealth. You just need patience. NB: the S&P 500 has averaged +11% annual returns over the last 40 years.