Enrique Abeyta's emergency briefing; Buy the invasion dip; The two-year anniversary of the pre-pandemic market peak and the one-year anniversary of ARKK's peak; DWAC's blow-off top; Last day in Canada
1) The markets have turned choppy, with volatility and uncertainty everywhere. During times like these, there's nobody I'd rather listen to than my colleague Enrique Abeyta, who has successfully navigated turmoil in the markets for more than two decades.
This Thursday, February 24 at 8 p.m. Eastern time, Enrique is hosting a free emergency briefing where he'll reveal how you can take advantage of market volatility to earn substantial returns, no matter which way the market goes. And he'll also share, just for tuning in, his favorite trade recommendation.
I urge you to attend... Missing this event would be a huge mistake, so register right away by clicking here.
2) Enrique tweeted this interesting series of stock charts of the S&P 500 Index during previous invasions that suggest it might be profitable to buy the dip:
3) There are two noteworthy anniversaries this week...
Two years ago, on February 19, 2020, the S&P 500 hit what was then an all-time high... and then plunged more than 35% in less than five weeks – its sharpest sell-off ever.
And one year ago, Cathie Woods' ARK Innovation Fund (ARKK), which embodied the growth stock mania that followed the crash, peaked on February 12, 2021, up a staggering 559% from its pandemic crash lows less than a year prior.
Since then, as my colleague Berna Barshay and I warned again and again, ARKK has collapsed, falling nearly 60% versus a 10% gain for the S&P 500 and a slight decline for the Nasdaq, as you can see in this chart:
In fact, updating the chart I included in my January 13 e-mail, ARKK now trails Warren Buffett's Berkshire Hathaway (BRK-B) since the February 19, 2020 peak:
This raises the question nearly every investor is asking: When will the total carnage among high-growth stocks end?
I'm not ready to call a bottom, but here are two good signs that we might be getting near one...
First, ARKK hit a 52-week low on Friday, thanks to the 22% decline of the fund's third-largest holding, Roku (ROKU), which is now down 77% from its high only eight months ago.
Second, "Fund managers are now more thoroughly underweight in technology stocks than at any time since 2006" (hat tip to my friend Marcelo Lima for flagging this):
4) My No. 1 stock to avoid in 2022, Digital World Acquisition (DWAC), is spiking this morning after former President Trump's new social media venture, Truth Social, became the top free app on Apple's (AAPL) App Store shortly after it launched late on Sunday (and still is, according to this tracking site).
I was certainly early in predicting the collapse of this stock... but my view hasn't changed that this will be the ultimate outcome, for various reasons I've outlined in prior e-mails (archive here).
This is a classic "buy the rumor, sell the news" situation, so this morning's spike to $99 per share smells like a blow-off top to me...
5) We're flying home this evening from our ski trip to Mont-Tremblant in Canada, the 11th country I've visited in the past year (the first 10, in order, were: Kenya, South Africa, the Bahamas, Turkey, Uzbekistan, Switzerland, Greece, Spain, France, and Ecuador).
Then, when I land at LaGuardia, I have 90 minutes to get my skis and race to the next terminal to catch a flight up to Burlington, Vermont to spend the next week with my parents, who are at our extended family's place on Lake Sunapee, New Hampshire.
Tremblant is a first-class ski area, but it was a mistake coming here in February – the weather is just too unpredictable. It was bitterly cold, windy, and overcast the first three days before we finally got one beautiful day yesterday – here's a picture of us at the summit (I also posted three video clips of us tree skiing here):
Today there's an 80% chance of frozen mix, so we're not going to ski and are instead going to spend a few hours walking around and having lunch in Old Montreal.
I'm not complaining – though the skiing wasn't what we hoped for, we still had a great time. But if you live on the East coast, there are equally nice resorts that are much closer and likely to have warmer temperatures like Killington (where I'm skiing tomorrow), Stowe, Mount Snow, Stratton, Okemo, and Sugarbush. And if you're going to get on a plane (as we did), go west – my favorites are Jackson Hole, Deer Valley, and Snowbird.
Best regards,
Whitney
P.S. I welcome your feedback at WTDfeedback@empirefinancialresearch.com.