Quantum AI Tech Stocks Current State of Drawdowns and Buying Levels
Companies / Investing 2022 Mar 09, 2022 - 09:20 PM GMTBy: Nadeem_Walayat
50% DRAWDOWNS ARE THE NORM!
The indices tend to smooth out what is actually taking place in the stock market, as we have had a taste of these past few weeks where some stocks have stuck near their highs, even risen in price, the likes of LMT and GPN, whilst others have crashed and burned all whilst the Dow is currently down barely 5.5% off it's all time high! Try telling that to holders of MOST stocks that are typically down by 50% or more off their highs! And now being joined by FAANGBOOK,
Investors HAVE to expect the potential for 50% draw downs, THAT IS WHAT HAPPENS TO MOST STOCKS MOST YEARS!
That is the cost of investing in the stock market, does not matter that the stock is Google, Apple, Amazon, FACEBOOK!, 50% DRAWDOWNS, IF YOU CANNOT DEAL WITH THIS FACT THEN DO NOT INVEST IN THE STOCK MARKET because it is normal! And why I often say just invest and forget and you'll save yourselves a lot of grief staring at the draw downs that WILL HAPPEN REGARDLESS OF STOCK!
Yes one can diminish the potential for draw downs by distributing into over valued FOMO highs as I and many Patrons were doing during Q3 and Q4 last year, coupled with then BUYING the DEVIATIONS from the highs and thus one can manage to smooth things out somewhat. For instance by selling most of my Facebook and buying it back at first around $301 and then sub $240, brings my average NEW exposure price down to $273, which is a a 30% deviation from the high, so my potential draw down risk to say $200 (about half Facebook high) is for about a 25% draw down. Which is about the best investors can hope to achieve without having the benefit of HINDSIGHT!
Current State of Draw downs
My analysis of 12th Jan laid out how low I expected stocks to trade down to for potential buying opportunities (HOW TO SUCCESSFULLY INVEST IN STOCKS During 2022 and Beyond)
To date those once distant draw downs have been achieved for Nvidia, AMD. Facebook, Amazon, ASML, Microsoft and Intel. Which was further refined into buying levels in my brief buying levels message of 24th Jan expanded in my last analysis of 31st Jan as an indication of how low stocks could go by referring to my 3rd buying levels. One has to realise that for one to buy for instance Facebook at Buying Level 3 of $232 then Facebook has to actually FALL to $232 to enable one to do so! And for that to take place then there has to be a reason to generate the selling to attain the buying level, a reason that one will only become apparent in hindsight!
In respect of which so far only Facebook has won the award for achieving MAX DRAWDOWN of $233, and with it executing my final Buy limit order at $232 so that my portfolio is now stuffed to the eyeballs with Facebook stock, no more!
So I am basically mostly investing on autopilot as I have my buying levels around which I have tweaked limit orders as I continue to build up my exposure to Quantum AI tech stocks after having sold 80% of my holdings during the second half of last year. bringing my exposure down to barely 20% of portfolio (AI stocks+ high risk stocks + Portfolio cash = 100%). that I am now in the process of building to a target at least 55% invested so that coupled with high risk stocks at 24% I will be back to being about 75% invested,
This article is an excerpt from my recent in-depth analysis that mapped out how low AI tech stocks could trade during the stock market panic of 2022.
Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels
Content:
m = f - Everything is Waving!
How to Invest in Stocks 20202 and Beyond
Stock Market Calm In the Eye of the Storm
Stock Market Forward Guidance
50% DRAWDOWNS ARE THE NORM!
Current State of Draw downs
Quantum AI Stocks Portfolio Current
AI Tech Stocks Buying Levels
Earnings Growth Factor
GOOGLE TO BE SLICIED INTO 20 PIECES!
FACBOOK MISSION ACCOMPLISHED Whilst CNBC Clowns Buy the TOP and SELL the BOTTOM!
MICROSOFT Short and Sharp
Still Waiting to Take a BITE out of APPLE
NVIDIA is ARMless - To Buy or Not to Buy, that is the question.
AMD - The Chip Master
TSMC - The World's Supreme Chip Fabricator
AMAZON the Dark Horse!
ARKK SARK SHORT FUND
That was first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.
Also access to my most recent analysis focused on continuing to capitalise on the downward spiral in stock price in response to first Inflation Panic and now added to by War Panic.
World War 3 Phase 1 - Putin WINS Ukraine War!
What Putin Plans for Ukraine
JRS.L Capitalising on Russia's War CRASHED Stocks
THE 2020's INFLATION MONSTER!
Stock Market Trend Forecast Current State
Stock Market FOMO Gives Way to FEAR of Buying the Dip
AI Stocks Portfolio Current State With Updated Buying Levels
FACEBOOK Stock 45% CRASH - Game Over for META?
FACEBOOK RINSE AND REPEAT
INVESTING LESSON - HAVE A PLAN AND THEN EXECUTE IT!
HIGH RISK STOCKS - INVEST AND FORGET
High Risk Stocks Portfolio Revised Buying Levels
GROWTH STOCKS TO CAPITALISE ON THE PANIC OF 2022
1. XXXX - RANK 1 - $121.8, PE 7.8, EGF 38%
2. XXXX - RANK 1 - $58.5, PE 9.9, EGF 30%
3. XXXX- RANK 2 - $16.7, PE 8.7, EGF 33%
4. XXXX - RANK 2 - $89.5, PE 17.2, EGF 23%
5. XXXX - RANK 2 - $49.7 - PE 196, EGF 188%
And gain access to my recent timely analysis lays out how to invest in during the panic of 2022, to be soon followed by scheduled analysis that continues my trend forecast into the end of 2022.
HOW TO SUCCESSFULLY INVEST IN STOCKS During 2022 and Beyond
CONTENTS:
1. UNDERSTAND WHAT INVESTING IS
2. INVEST IN GOOD COMPANIES
3. UNDERSTAND THAT WHICH ONE IS INVESTING IN
4. STOCK PRICES
5. EARNINGS CATCHUP TRADING RANGE TREND PATTERN
6. EMOTIONAL INVESTING
7. MONITORING AND LIMITING EXPOSURE IS MOST IMPORTANT
8. BUY AND SELL on the Basis of VALUATIONS
9. INVESTORS BIGGEST MISTAKE
10. BEST TIME TO BUY STOCKS
11. WORST TIME TO BUY STOCKS
12. BUY VOLATILITY
13. INVESTING TIME
14. FUND MANAGERS
15. OPTIONS
16 . INFLATION
17. INVEST AND FOREGET
AI Tech Stocks Draw down and End of Year 2022 Price Targets
CATHY WOOD ARK GARBAGE
So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.
My analysis schedule includes:
- Opportunities in CRASHED Small Cap Tech Growth Stocks
- Stock Market Trend Forecast Mid Feb to End 2022
- UK House Prices Trend Analysis, including an update for the US and a quick look at Canada and China - 65% done
- How to Get Rich! - 90% done - This is a good 6 month work in progress nearing completion.
- US Dollar and British Pound analysis
- Gold Price Trend Analysis - 10%
Again for immediate access to all my work do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.
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Your analyst capitalising on stock market panic selling
Nadeem Walayat
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Nadeem Walayat has over 35 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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