Key Tactical Takeaways:
> After growth showed reflexive leadership vs. value in late November, it appears that the deterioration in growth leadership that accelerated in early November appears poised to ...
> Although Wednesday's sell-off in many of the market's riskier areas like HYG, EEM, and IWM was a welcome response to recent top-heavy conditions, as of Wednesday's close the short-term trends remain higher in those ETFs.
> USO, which has been highly correlated to the S&P of late, held in well during Wednesday's equity selling. Pending a close < ..., the trend will favor a move toward ..., where some profits should be taken.
> This letter will take a small loss on INO at the open today and move on to a new long in ..., with an initial stop at ....
Some Quick Thoughts:
For those of us old enough to remember, names like Flowers.com and Pets.com bring back memories of bubble-popping IPOs at the top of the tech mania in 2000. During that time, I was a Portfolio Assistant on a small cap mutual fund at JP Morgan Asset Management, and I still remember the prospectus train that would make it through our office each week. The fund's manager, a brilliant and tough woman that gave me my first shot in this business, loved to point out some of the yellow flags that could be found hidden deep within the abyss of these booklets. The most memorable had to do with the fact that the CEO of one company made admissions that the proceeds of his deal would go to fund his divorce settlement. However, most examples had to do with the "back of the napkin" valuations of these offerings at the time.
On Wednesday, in another example of a flawed process that usually only benefits a small group of institutional investors, DoorDash came to market with one of the biggest initial public offerings of a busy year. After an increase of 85.8% from the IPO price of $102, the company raised at least $3.4B. At the same time, the Nasdaq dropped 2% in its largest 1-day drop since 10/27. Will DoorDash be the new Flowers.com or Pets.com that sends equities into a multi-year bear market? Well, with...
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