Light Fridays Reads

Just did some light reading today. There is a common theme amongst investors and traders that I am seeing. From my experience, a company can be firing on all cylinders and go down 70%. When a stock goes down on a report, my first thought is "ah guidance", so I usually take a look at guidance, then I check to see if they beat current quarter on each metric. No, a miss does not make me sell the name. But a fundamental shift in the business (like I saw with FSLY, and their poor management skills) that is a sell indicator for me. I do not own that company, but from the moment they pre-announced that news, management got put into the penalty box for a while per my investment strategy. I will stick with CloudFlare, I believe their management to be superior in many ways based on what I have seen and read. I weigh my strategy pretty highly on management, if I had to put a percentage on it, it would probably be 45%. I am not sure why I did not short it, technicals were ugly and it was there. Maybe it was the fact that in the back of my head, that stock is a MOMO stock and one turn on a day could go up 20%. I continue to stay fully invested into NET, BL, LMND, ZBRA. I think this is a well-balance approach headed into an election and the next 5 years given each industry and their prospects. I hope everyone has a great weekend. I will be changing poopy diapers.



https://www.wsj.com/articles/consumer-spending-personal-income-coronavirus-september-2020-11604012444?mod=hp_lead_pos2

  • Consumers increased spending since the summer

  • Consumers boosted outlays on autos, clothing, healthcare, and entertainment services

  • Mostly among households that saw limited job and income losses…

https://www.wsj.com/articles/fed-again-eases-terms-for-main-street-lending-program-11604070083?mod=markets_lead_pos3

  • Loan amount lowered to $100k from $250k to help small, midsize businesses, good.

  • The Fed will purchase 95% of eligible loans made by banks

  • Fed officials warned that the economy will face a more uneven and difficult recovery without additional direct aid.

https://www.wsj.com/articles/gold-bonds-failed-to-protect-investors-amid-stock-market-swoon-11604056455?mod=markets_lead_pos7

  • Lockdowns in Europe and rising COVID cases, no agreement on a second round of stimulus, shake the markets

  • Government debt and gold, have not acted like the safety net investors are accustomed too

  • Cash was the only thing protecting you, and you aren't getting a return on that

  • Some investors say that yields cannnot fall much further after a yearlong slide, driven by low inflation, loose monetary policy and an aging population.

  • Government bonds are not sufficient enough to protect a portfolio.

I love to utilize Ed Yardeni's website, very good data. https://www.yardeni.com

https://www.wsj.com/articles/ecb-signals-further-stimulus-ahead-11603976353

https://www.wsj.com/articles/us-gdp-third-quarter-2020-11603908566?mod=hp_lead_pos2

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