Alpha Letter

Share this post
Tech Stocks Get Slammed
www.alphaletter.co

Tech Stocks Get Slammed

Alpha Letter
Jan 14
Comment8
Share

Good morning investors,

Tech stocks got slammed in yesterdays trading session. The Nasdaq was down -2.51%. Bitcoin followed, down 2.38% along with the S&P 500 which was down 1.42%. Year-to-date, tech stocks are the worst performing sector with the Nasdaq down 2.64%. Investors have begun to rotate out of tech and into value stocks, with the iShares Core S&P U.S. Value Index (IUSV) up 1.49%.

If inflation continues to increase, I expect tech stocks to continue to feel pain. Tech valuations are at nosebleed levels. Earnings multiples are off the charts and most high flying tech stocks have failed to generate any cash flows since their inception. Even the once great “SPAC King” has had quiet the difficult year with his mostly non-revenue, zero free cash flow companies.

Twitter avatar for @PunchableFaceIIChadford Whitmore II @PunchableFaceII
The Next Warren Buffet How it started vs. How it went
Image
Image

January 10th 2022

112 Retweets1,294 Likes

Despite the increased volatility in the market, I continue to position my portfolio in the same exact way that I have for the past decade. I own cheap stocks that should generate their current valuation in free cash flow over the next two to four years. I own companies trading for less than their liquidation value. And I am not chasing any hyped up growth sectors.

I am doing what I have done for the past decade and will continue to do it going forward. Buying stocks that no one else wants to own and patiently waiting for the market to revalue their assets.

Where to Invest $100,000 Right Now According to Experts

Today, investors face a dilemma. Inflation is at 7.1%. Volatility is rising. And, the pandemic is still disrupting markets. Finding promising investments is harder than ever. 

Recently, Bloomberg asked investment experts where they’d personally invest $100,000 right now. Their response? They overwhelmingly advocated for alternatives including art.

Who am I to argue? So I went ahead and added some art to my portfolio. I don’t mean NFTs either. I invested in six real multimillion-dollar paintings. 

This is why I’m bullish on art:

  • UBS reports that two-thirds of high-net-worth collectors buy art for an expected ROI

  • Real assets like art appreciate well on average when inflation is high

  • Blue-chip Art prices outpaced the S&P 500 by 164% from 1995 to 2021

But I didn’t have to buy entire paintings myself. That would’ve cost me tens, or even hundreds of millions.

I used Masterworks.io—the only alternative investing platform that lets you invest in iconic art without needing millions. By securitizing works by artists like Warhol, Banksy, and Picasso, everyone can be a bona fide art investor. 

They even raised $110M at over a $1B valuation, so their future looks bright, to say the least. 

Want to join me and 300,000 members? Alpha Letter readers get priority access*

*See important disclosures

News Flow

  • Hedge fund manager Kyle Bass: Buckle your seatbelts on oil prices: Closely watched hedge fund manager Kyle Bass said Thursday that oil prices could rise "well north of $100" in 2022 as a lack of investment in the hydrocarbon industry meets a surge in demand as the global economy emerges from COVID restrictions. "I think you should buckle your seatbelts," the founder and chief investment officer of Hayman Capital Management said. "We're going to see really high prices very soon." Read More.

  • Fed's Daly says hiking interest rates in March is 'quite reasonable': In the wake of surging inflation and a "booming" labor market, San Francisco Federal Reserve Bank President Mary Daly says it may be appropriate to hike interest rates in March, she told Reuters in an interview. "Lifting off in March when you have an unemployment rate of 3.9%, and an inflation rate that's north of our price stability goal of average 2% inflation, to me seems a quite reasonable thing," Daly explains to Reuters. Read More.

  • Lithium stocks led by SQM rally as supply squeeze risks lift prices: Lithium stocks are surging today, as prices for the battery metal have spiked to start the year with supplies facing a series of near-term risks that threaten deeper shortages just as demand for electric vehicles continues to grow. "The lithium market is extremely tight at present, so spot prices are very sensitive to any supply disruptions," S&P Global Market Intelligence analyst Alice Yu tells Bloomberg. Read More.

  • Global Economy Heading For "Mother Of All" Supply Chain Shocks As China Locks Down Ports: But what until recently was a minority view confined to our modest website, has since expanded and as Bloomberg writes overnight, the effects of restrictions in China as the country maintains its Covid-zero policy "are starting to hit supply chains in the region." As a result of the slow movement of goods through some of the country’s busiest and most important ports means shippers are now diverting to Shanghai, causing the types of knock-on delays at the world’s biggest container port that led to massive congestion bottlnecks last summer that eventually translated into a record number of container ships waiting off the coast of California, a glut that hasn't been cleared to this day. Read More.

Meme Corner

Twitter avatar for @daddoescryptoMark (Responsible Crypto Investor) @daddoescrypto
My son will just have to go to a college that accepts Elon Ass Coin as payment for tuition. End of discussion.

January 13th 2022

2 Retweets41 Likes
Twitter avatar for @CaptainNasdaqCaptain Nasdaq (Based) @CaptainNasdaq
Okaaaayyyyyy let me juuuuuuuust shaaaaaaaaare my screeeeeeen… okaycanyouseeit?

January 13th 2022

321 Retweets3,405 Likes
Twitter avatar for @tumtonksthomas the divorced trader @tumtonks
Filipino workers: "Can we make a living wage?" Nick Huber:
Image

January 11th 2022

1 Retweet98 Likes
Comment8
ShareShare

Create your profile

0 subscriptions will be displayed on your profile (edit)

Skip for now

Only paid subscribers can comment on this post

Already a paid subscriber? Sign in

Check your email

For your security, we need to re-authenticate you.

Click the link we sent to , or click here to sign in.

Nick A
Jan 14

Do you ever / have you ever been tempted to allocate a portion of your portfolio to following the trades of the Stock Market Queen? You know who I mean…

Expand full comment
Reply
2 replies by Alpha Letter and others
John Sabia
Jan 14

IIROC trading halt on Dorel Industries "Pending News"

Expand full comment
Reply
4 replies by Alpha Letter and others
6 more comments…
TopNewCommunity

No posts

Ready for more?

© 2022 Alpha Letter
Privacy ∙ Terms ∙ Collection notice
Publish on Substack Get the app
Substack is the home for great writing