Updated: Nov 19, 2020
Did I sell my NET, BL, ZBRA, LMND today in the Growth Fund? Absolutely not. I did not add either. Mostly cause I do not have much cash left to spend. What we are witnessing is simply a sector rotation, we get good vaccine data, and all of a sudden investors (who I think are traders) liquidate and move into what they think will benefit next (Industrials, Cyclicals, and companies that are basically bankrupt.........). I agree and disagree, if you are a trader sure, I get it, there is money to be made in every nook of the market. I prefer investing, I can gut my volatility and add when I think it is necessary. I have a trading account that I have fun in, but I dont like to post about that one because I want people to be investors, not traders. Short-term the Nasdaq looks like it may bleed slowly, my view is we end up rallying end of November into December the more information we get on the administration switch, Georgia run-offs (market is pricing Gridlock I believe, so we want the republicans to control the Senate, Democrats house, and Democratic President). I don't care about your politics, I am here to make money, and I will do it under whoever serves as President.
*****UPDATE AS OF 11/19/2020*****
I have to say, pretty ugly candle. Just because the index is down short-term doesnt mean some of the names we own will go down too. For instance, I was up .02% today (BlackLine too a smack!), BlackLine may be the first I add with a fresh round of cash. But I have maxed my Roth IRA out in 2020 so have to wait until 2021. I am short-term bearish on the QQQ, possibly back to $272.47, then we rally back to new highs latter half of November into December.
What do I think of a Biden Presidency? Bias aside (I believe investment analysts have the ability to put aside their personal political beliefs and focus). I think a Biden Presidency will be somewhat better for uncertainty in the markets, not necessarily the economics, but sentiment is really important and markets like it when we understand what is going on. Not erratic tweets on China, foreign policy probably should not be done over Twitter. Im not sure I'm not a politician. Gridlock will be very important, I believe Gridlock (and Biden being a long-term boring politician) will force both sides to come up with stimulus and infrastructure for the American people. No, I do not believe the increased taxes will really happen. If they do, the indexes may re-adjust. I am not playing a "Biden" or "Trump" Presidency portfolio, I think that is a waste of time personally. I like buying good businesses that are performing well.
Look, we cannot forget what the Central Banks are doing, low rates, (bears will point out all the debt, yeah okay how has that worked the last 100 years), go ahead and short the market. Obviously we cannot keep using this as the go to, so, the most recent earnings from companies I own, and monitor, did a very good job on my side. I think this recent quarters earnings bolster the thesis for buying stocks, and being allocated heavier there. Lets look at the Factset Earnings Insight. https://www.factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_110620A.pdf
To be honest, I do not think we can really use the "above 5-year average" and "above 10-year average" because of how hard the virus hit the bottom line (+CB policy). Yes, I understand earnings were revised lower so they are beating lower expectations, but a lot of companies did very very well. Facebook, Amazon, Google, (all 4 of my names), big tech in a whole did well. I really don't follow energy or real estate, maybe consumer discretionary and a few industrials.
Great visual on the change in FWD 12-month EPS vs Change in Price: 10 years. (Factset). I highly suggest reading these Factset reports!
https://www.yardeni.com/pub/performnormalpe.pdf --> Forward P/E ratios on sectors
https://www.yardeni.com/pub/if-ges.pdf --> Semi Equipment
https://www.yardeni.com/pub/if-gas.pdf --> application software
https://www.yardeni.com/pub/usinterestrate.pdf --> US Bond Yields
Honestly, I have to admit, I have no idea why people buy the things they do. I am going to build out an article on revenue segments of my companies and the possible risks associated with it. We must always understand that as well..
P.S. if anyone gets down to reading this far... (you know who you are...) my hot watchlist addition is $DOCU (might be very enticing around $155.92.......). I thank @trader_marky for that watchlist addition. DD time over the next few weeks.