Thoughts on short term market direction
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Yup…a very nice jacket
Things ARE going fast….one of the things we used to speak about (5 years ago, when I was paid employment!) was that if people thought things had changed quickly in the previous 5+ years, hold on to your hat - everything tech is massively accelerating.
Part of the reason I don’t envisage another “hard crash” ahead, but a series of bumps and dips and new all time highs sliding in too….but he does make a good point about circular money….Microsoft pouring a bit more into OpenAI mentioned on another thread. Funny money, as my old mum would have called it
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Recent speed is simply a function of the market being asleep at the wheel for some time in regards to big names like GOOG and NVDA. The stock market can often serve up opportunities. When there is fear the unlikely becomes likely. It's been that way 'forever'. The price is rarely a true reflection of real worth on any one day or week
Not only had they distilled OpenAIs work they also used 10k of the most powerful GPUs(claiming they did it with a ZX81 and few solar panels). The irony being even if what they claimed was true it just made AI more accessible.
At the end of the day Nvidia is the greatest company in existence with an iron grip on many industries and sectors.Not only do they dominate they create new industries. In my opinion they are still just getting warmed up. The naysayers can shout at the clouds all they want ;).
Volatility will remain a constant.
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Morning O,
Days like yesterday are much more common. Kicked off by a lacklustre Palantir earnings. They were good in isolation but not anything spectacular and when you are priced into the stratosphere you need a lot more. 115X revenue! That's all I can say.
Coupled with Big Shorts Michael Burry stating he has loaded up on Puts (a way of shorting) Nvidia and Palantir. Good luck with that, he's shorted Nvidia before and got bruised.
So in summary what has happened? Not a lot really. And with Nvidia earnings on the 19th(?) I doubt it will stray too much in the interim.
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it's a slight delay as rebalancing in progress.
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Volatility indeed. It's looking sticky out there today; is this the start of the much-talked-about 'correction'?
@2BToo I've just moved my PHT profits into a safer (I hope) place, and done the same with NVDA and TSLA shares. I'm willing to lose the capital, as that's always the deal with betting on shares, but I don't see the point of losing the profit as well.
If the good times keep on rolling, I've just lost out on compounding. If it's bad times a-coming, I won't lose as much before the growth starts again.
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I can see the logic in that. However the compounding is where the big gains are made ('eighth wonder of the world', according Bertie Einstein.) There are occasional VERY good days which produce big gains on some shares, and missing out on those days would dent performance quite significantly.
Some time ago I concluded that I would stay invested through the bad times, mainly because I am almost certainly not clever enough to do anything else that would produce better results.
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We all have different ideas, driven by a number of factors:
Years to retirement
short term vs long term cash needs
volatility appetite
Total invested assets
The usual psychological effectsSir Alex isn't saying 'do this'. His decision is based on a number of factors which in all likelihood don't apply to 'you'.
Put it this way, when a portfolio gains 8% in a month and the following month adds another 12% , exceeding prior highs by some margin, odds are it will have a pullback. In isolation that is no reason to sell it. See the factors above. If one is trying to simply time the market and nothing else, that imo should be a habit to lose because human nature being what it is -being on the right side of that decision once will only persuade you to do it again and you will get caught out, imo :).
Also discussed before, never take a 'what would you do' poll. The person you are asking has no idea due to the above and the market moves irrationally most days, as shown from the Micron example earlier.
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We all have different ideas, driven by a number of factors:
Years to retirement
short term vs long term cash needs
volatility appetite
Total invested assets
The usual psychological effectsSir Alex isn't saying 'do this'. His decision is based on a number of factors which in all likelihood don't apply to 'you'.
Put it this way, when a portfolio gains 8% in a month and the following month adds another 12% , exceeding prior highs by some margin, odds are it will have a pullback. In isolation that is no reason to sell it. See the factors above. If one is trying to simply time the market and nothing else, that imo should be a habit to lose because human nature being what it is -being on the right side of that decision once will only persuade you to do it again and you will get caught out, imo :).
Also discussed before, never take a 'what would you do' poll. The person you are asking has no idea due to the above and the market moves irrationally most days, as shown from the Micron example earlier.
@Adam-Kay said in Thoughts on short term market direction:
Sir Alex .....
Gosh - @SiriAlexaAl has been ennobled!
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he slipped that passed me- ok here goes
In the name of God, Saint Michael, and Saint George, I dub thee knight. Arise, Sir Alex.
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It may be short lived. The King being, mercurial
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he slipped that passed me- ok here goes
In the name of God, Saint Michael, and Saint George, I dub thee knight. Arise, Sir Alex.
@Adam-Kay Careful with that sword, my Lord
I've made a little graph that shows my current risk, and I wasn't happy with it.
NVDA and TSLA were big numbers compared to the rest. Too much money in volatile stocks. I just reduced the risk by reducing the exposure.
Your risk list above is a good one. My volatility appetite is high for 10% of investment, medium for 80%, and low for 10%.
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Your age and your risk appetite are no doubt closely linked.
I sometimes feel I buck the trend by accepting a reasonable amount of risk (wrong side of 60, unwaged for 4½ years….love how autocarrot changed that to ‘unwashed’).
‘Low risk’ here for 10% of our ‘wealth’….enough for us to live on for perhaps 3-4 years if needed; ‘med-high’ for the rest
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That said, we feel fortunate with our lifestyle, & don’t have massively extravagant tastes, so perhaps can afford to take more risks
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I would say age and risk, other thinks being equal, are linked. But let's not confuse/conflate risk. A real world example. Bob and his wife are 80, they have gilt edged DB pensions index linked paying £6k per month. All their ISA investments(7 figs) are equity and growth. The check list/factors still apply it's just that Bobs situation is he is net in a low risk situation.
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I would say age and risk, other thinks being equal, are linked. But let's not confuse/conflate risk. A real world example. Bob and his wife are 80, they have gilt edged DB pensions index linked paying £6k per month. All their ISA investments(7 figs) are equity and growth. The check list/factors still apply it's just that Bobs situation is he is net in a low risk situation.
