High Beta Trash Bloodbath

Market starts to differentiate! Good!

ARKK high beta trash down 9%. Do not get me wrong there are good companies in the fund, but they are bad stocks because they are simply too expensive! Have a look at SNOW, friends from my work with them on projects and it’s a great software, but they still have Price / Sales of 79 and should have a Price / Sales of 5! So still a ton of room to go down!

Small Caps Value monster relative strength. —>

Mega Cap Growth compounders stronger (lets wait and see how they do when the Nasdaq pulls back harder!). But it is a very good sign that the market starts to differentiate! —>

Energy up, commodities up.

Ladies and Gentlemen, this looks more and more like 2000-2007, value momentum is doing great and growth at reasonable price is doing kind of o.k. But meme high beta trash is tanking (like in 2000!).

Retail traders that have been sucked into them and the diamond hands (high beta trash) approach gets punished and will be punished until those stocks have Price / Earnings (e.g., they need to have earnings!!!) in the low 20s or even lower (that will be a great bottom by the way!). That is very often 90% (down!) from here!

Same with crypto, highly leveraged markets, MSTR (they bought Bitcoin with dept!) will bust big time. I made a 500% trade on bitcoin in 2017, so I am not a crypto bear per sé, but this market is simply not a high beta, no earnings market!

Think new, think value, think quality, think growth at reasonable price. Have some cash.

FB has a P/E of 23! Google has a P/E of 26! Look for stuff like that. Not stuff like SNOW with no earnings, a market cap of 82 Billion and Sales TTM of roughly a billion.

Think new. We have a new market theme, a new tape theme: Value and Earnings!