Some odd spikes among the most speculative stocks I follow; Doug Kass is taking a 'Short Voyage'; Top 15 stocks in the S&P 500 Index over the past 20 years; Wage growth outpacing inflation; The New York Times' '36 Questions That Lead to Love'
1) There were some odd spikes yesterday – on no news – among the more than 200 stocks I've entered into a Yahoo Finance tracker and glance at daily...
Twenty-nine – or roughly 15% – of them jumped 5% or more:
These are almost all of the most speculative stocks I follow.
So... what does this mean?
For now, by itself, almost nothing. There are often days in which investors' "animal spirits" run wild (though yesterday was unusual enough to catch my eye).
Maybe it's a "dead-cat bounce" among beaten-down stocks on their way to zero. Or maybe it's an early indicator that another crazy bubble like the meme stocks in 2021 is in the offing.
I'll continue to follow this... And if I think it's something meaningful, I'll let you know!
2) Meanwhile, I'm not the only one who noticed speculative juices flowing freely in the markets yesterday...
Below is what my friend Doug Kass of Seabreeze Partners wrote in a missive yesterday. I'll also note that I strongly recommend that average investors not engage in short selling – as Doug and I can tell you (and show you the scars on our backs), even experienced pros can get killed doing it!
Here's what Doug had to say:
Taking a 'Short Voyage'
Given the extended nature of the move (and the elevated RSIs) I have shorted a small package of high-octane market leaders:
- AMD: $174.99
- AMZN: $174.59
- CRM: $289.56
- GOOGL: $148.62
- META: $476.51
- NVDA: $731.71
Emphasis on small package.
Please don't follow me into this trade, as short selling is not a voyage that retail investors and traders should journey into!
It is also important to recognize that I am very disciplined in these sort of "short trips" and I am quick to take a small loss. (It can always happen momentarily!)
Then earlier this morning, Doug followed up with this missive:
Short City
I am staying with my short package from Monday...
Yesterday, for the first time, I shorted a package of mega tech.
I did so based on several extreme reading and technical conditions:
- The S&P [500] Index was at an extraordinary wide vs. the 200-day moving average
- The price action in Beamr Imaging (BMR) – at one point it was 1,000% on the day! – reflected an extreme in euphoria:
- The intraday move up in Arm Holdings' (ARM) shares were also at a speculative extreme:
Thank you, Doug!
3) Rather than speculating among the garbage stocks out there, your time is much better spent doing what my team and I do here at Stansberry Research: looking for high-quality, long-term compounders.
(In fact, in the latest issue of our Stansberry's Investment Advisory newsletter earlier this month, we just recommend another one – if you aren't already a subscriber, you can find out how to gain instant access to it right here.)
On that note of long-term winners, Visual Capitalist recently listed the top 15 stocks in the S&P 500 over the past 20 years (as of the end of 2023):
In the same post, Visual Capitalist also included this chart with more details about these stocks:
Finding even one of them – and having the good sense to hang on – can transform your financial future.
I owned three of them at various times over the years – Apple (AAPL), Netflix (NFLX), and Amazon (AMZN) – but sold way too soon.
My cousin was one of the early employees at Intuitive Surgical (ISRG) and my business-school classmate was CEO of Booking Holdings (BKNG), but I stupidly never owned them.
And I'm embarrassed to say I've never even heard of five of those stocks in the list (as I eat more humble pie)!
4) This wage-growth data – in a post on X from Charles Schwab Chief Investment Strategist Liz Ann Sonders – is very positive for workers and our economy:
You can see that wages have, not surprisingly, closely tracked the spike and then the pullback in inflation. But the key is that they remain strong at 5% – well above the 3.1% inflation rate the government just reported this morning.
That means workers' real (inflation adjusted) earnings are rising, which is great news for average folks – and the economy, given that consumer spending accounts for roughly 70% of GDP.
5) I recently came across a repost of this classic New York Times article from 2015: The 36 Questions That Lead to Love. It's a great read! Here's an excerpt:
In Mandy Len Catron's Modern Love essay, "To Fall in Love With Anyone, Do This," she refers to a study by the psychologist Arthur Aron (and others) that explores whether intimacy between two strangers can be accelerated by having them ask each other a specific series of personal questions. The 36 questions in the study are broken up into three sets, with each set intended to be more probing than the previous one.
The idea is that mutual vulnerability fosters closeness. To quote the study's authors, "One key pattern associated with the development of a close relationship among peers is sustained, escalating, reciprocal, personal self-disclosure." Allowing oneself to be vulnerable with another person can be exceedingly difficult, so this exercise forces the issue.
The final task Ms. Catron and her friend try – staring into each other's eyes for four minutes – is less well documented, with the suggested duration ranging from two minutes to four. But Ms. Catron was unequivocal in her recommendation. "Two minutes is just enough to be terrified," she told me. "Four really goes somewhere."
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.