2020 will forever be remembered for both the pandemic that was unleashed upon the world as well as the policy responses to it. Investors will also remember it for the tremendous market volatility (in both directions) and more importantly, investor’s reactions to that volatility (again, in both directions!).
Is your financial advisor a fiduciary? Maybe you assume he/she is but it's important to educate yourself on the differences between a fiduciary vs. salesperson.
Roku (ROKU) is a company that J2 Capital Management has continued to have conviction in. The shift from traditional TV to streaming has continued to accelerate and sitting in the middle of this competition for eyeballs is Roku.
As we continue experiencing a year of financial uncertainty, here’s where J2 stands when it comes to cryptocurrency.
The mass herding into those FANNMG names and software stocks keeps rocketing higher unabated while the rest of the market languishes behind. How exactly does this end? Will the rest of the market catch up to the select few that are powering the S&P 500 higher or will the tech stocks tank to catch down to everything else?
Chegg is a holding in our J2 Dynamic MidCap Growth stock strategy. In early March as the market was selling off we reviewed Chegg's 4Q 2019 earnings report and came away very impressed with their organic growth and brand recognition amongst college students.
Risk across the market, specifically in the momentum names is increasing and is not sustainable, at least in the short term.
With the major run-up in stock prices, this has expanded companies' valuations off relatively flat earnings. 2020 will be a year of either living up to these high expectations or falling short, forcing investors to rethink their bullish mood despite an accommodative Fed.
How much uncertainty you can live with? Do you prefer to sit back & watch the stock ticker? Ask yourself these questions to help determine your risk tolerance.
Trade Wars, Fed Rate Cuts, Negative Interest Rates, Yield Curve Inversion, Trump Impeachment, Brexit, and Recession! Did I cover all the monsters in the room? Both advisors and clients all know the same information due to the internet and easier access to information. This has made sentiment poor and both advisors and clients have reacted by lowering equity allocations. Is this the fuel that keeps the market afloat?
From this Christmas Eve miracle, the U.S. Fed embarked on a series of interest rate and quantitative tightening walk backs. Not to be outdone, the European Central Bank, which just ended its credit infusions to its banking system, started walking back its plans to tighten monetary conditions by discussing more easing. To complete the coordination, China stepped in with massive liquidity credit injections to its state-owned corporations.
We believe that for the market to be back in an up- trend and out of a high-risk environment, we need to see a couple strong days in the market that put the RCI Indicator above 80. That would suggest to us that institutions feel comfortable enough with the market to be engaged again. Good earnings guidance will give cover to the risk-on trade being back in style. I believe we will find out by the end of October what kind of market we are in. For now, J2 Capital is holding higher-than-normal levels of cash across our models, waiting to see what the market’s next move is.
The market is currently confusing, messy, and not optimal for risk-taking. Intuitional program trading is beating up those trying to play the wiggles. We have done well managing the recent volatility by being early to sell down to cash. We want to be careful to not overthink things and get caught up in chasing markets up and down daily. A better investment environment will present itself but it’s not now.
We believe that given the euphoric rise with no pullback along with exuberant enthusiasm raises risks in the short term higher than we have seen in years. A pause would be healthy. Straight line advances in a 30-degree upward angle almost never stick no matter how good things are. Should stocks not pause, we would expect to see many months of gains given back very quickly.
A New Growth Stock Super-cycle Upon Us?
Markets move higher but momentum is stalling.
3rd qtr Quarter 2017 Market Update from portfolio manager John Benedict of J2 Capital Management Troy, MI. We discuss what happened in the quarter and what we see happening next.