To quote newly arrived Al B, “I nearly added to a name today, then realised that every stock chart looked v similar. People back congratulating themselves, when its been a case of "rising tide lifts all boats". Look at how well gold has bounced and you might ask why ?” Al makes a great point...
At the same time Cathy Wood, (as bad as SoftBank) breathing doubtless huge sighs of relief and hoovering inflows from retail lemmings really needs to learn that buying many terrible companies which may never turn a profit does not equate to being "100% invested in innovation."
The irony here is that the outlook for many of these terrible not-ever profits has never been worse. Case in point a company like WAYFAIR / W US has such horrendous negative cash flows that they may not make it through the coming recession.
Consensus thinking seems to be coming out as: earnings season is now out of the way, we’ve got 2 months of soft headline CPI reports coming up, the labor market is holding up, oil can’t hold a bid, and professional/active investors are underweight stocks.
Nutstuff says: “Heed the Wisdom of Stan!” “Inflation has come down from above 5% without Fed funds rising above CPI”, which is @9% right now. (Yes, falling for sure but needs to fast to support mkts recent moves!)
By all means punt some cr@p but thats just not really Nutstuffs game. For me a good diversity of alpha with the right “bar bell”.
Think Maslow! Think “needs” and “wants”. Much better to focus on outsized bets & to add “needs” here.... I still think we are going to see the biggest U.S. Uranium push since the
1970's when Uranium prices hit $218. CCJ & UEC (just doubled production for 14% dilution!) =the highest quality names.
Another observation: Gold miners are now almost paying more dividends than utility stocks for the first time in the history of the data.
As many want to chase “squeezing hope and silly valuations” Nutstuff would look more at the likes of VAL, WFRD and XOP US and very happy with OXY US as Warren buys more.
All these where there is valuation, FCF and under-appreciated secular growth. Also as UAN US still a key thematic play on fertiliser, interesting to see the growing list of fertiliser and chemical plants shutting down or rationing in the EU. Markets get tighter!
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