Stock Market FOMO Gives Way to FEAR of Buying the Dip
Stock-Markets / Stock Market 2022 Apr 18, 2022 - 06:01 PM GMTBy: Nadeem_Walayat
Stock Market Investor FOMO of barely a month ago on expectation of a blow off top that most clinged onto during the first few weeks of this sell off is now increasingly giving way to FEAR of an inexplicable never ending slide into the depths of a 2000 style bear market. We'll the Cathy Wood style stocks have been on that path for approaching a year now so perhaps not much downside in those, then again they still are what they were a year ago, NO EARNINGS GARBAGE!
However FEAR is infectious especially for the weak hands, those who where once eager to buy now FEAR perpetual falling prices that results in a state of paralysis. THIS IS WHAT IT ACTUALLY FEELS LIKE TO INVEST IN A FALLING MARKET! Something that is not apparent when looking at the price charts at tops and bottoms where one could easily have bought and sold with the be benefit of hindsight, yeah we'll maybe if one switched OFF the information flow that generates the GREED and FEAR that encourages buying at the top and inaction at the bottom!
Instead all that is happening is what II was iterating through much of 2021, that the market WILL PUNISH all those who forget the primary long-term driver of stock prices which is EARNINGS GROWTH!
The market gave a pandemic pass for the whole of 2020 and much of 2021 but since Mid year has increasingly sought to punish those stocks that are based on BS, you know the likes of that which populate Cathy Wood's funds.
THEY HAVE NO EARNINGS SO ALL OF THE FOCUS IS ON PURE BS METRICS CONJURED OUT OF THIN AIR!
The relentless mantra of DISRUPTIVE INNOVATION! Throwing fancy words around to justify investing in garbage!
And here I thought my of AI Tech stocks that were typically trading on multiples of 30-40 had become over valued and were ripe for downwards revaluation of about 1/3rd.
Listen folks the CORNER STONE OF INVESTING IS EARNINGS! IF A COMPANY HAS NO EARNINGS THEN NO MATTER THE SALES PITCH IT CAN GO BUST! THUS HAS VERY LITTLE MARGIN FOR ERROR WHEN INVESTING IN SUCH STOCKS that are literally floating on thin air. So it does not matter that a stock such as Roku has fallen by 80% of it's high, NO THAT DOES NOT NOW MAKE IT A POTENTIAL BUY as some patrons keep asking of r such stocks! It's just as big a pile of poop as it was when it was trading at it's all time high!
Whilst one has oodles of margin of error in investing in the likes of Intel, Facebook even Nvidia, because THEY ARE NOT GOING TO GO BUST! i.e. one can get timing very badly wrong and STILL COME OUT A WINNER, cos when a company is growing earnings then over time the valuations will moderate to the point it will lift stock prices higher. Take Facebook currently trading at $206, it's earnings multiple is 16, and it's EGF is 6%, so no matter how far the pendulum swings against it, earnings growth ensures ultimate upwards price pressure.
Instead Cathy Wood is a loony toons insane fund manager who literally point blank DOES NOT KNOW HOW TO INVEST! SERIOUSLY! SHE DOES NOT KNOW HOW TO INVEST! And hence has gambled away her investors monies in to black holes that will NEVER generate EARNNGS! So there is no coming back!
Yes by all means take a gamble, take a punt, but not with the WHOLE OF ONES CAPITAL!
This is why I repeatedly state that FUNDS are HIGHER risk than individual stocks and why funds form such a small part of my portfolio because the fund managers can be INSANE! Just watch this video and tell me Cathie Wood is not destined for a straight jacket!
They are not shorting innovation Cathie they are SHORTING YOU!
This article was an except for my recent analysis on continuing to capitalise on the downward spiral in stock prices in response to first Inflation Panic and now plus Ukraine War Panic. With the primary focus on identifying 5 small cap tech growth stocks to add to my High Risk stocks portfolio out of a short list of 50 stocks.
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%
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.
Whilst my most recent just posted analysis is - UK House Prices Three Trend Forecast 2022 to 2025, where I pealed away every layer of the UK housing market I could think of to arrive at a high probability of trend forecast, no following of the consensus herd here!
UK House Prices Trend Forecast 2022 to 2025
THE INFLATION MEGA-TREND
WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING
High Inflation Forecast for Whole of this Decade Due to Rampant Money Printing
Fed Inflation Strategy Revealed
Russian Sanctions Stagflation Driver
RECESSION RISKS 2023
UK Debt Inflation Smoking Gun
Britains' Hyper Housing Market
UK Population Growth Forecast 2010 to 2030
UK House Building and Population Growth Analysis
UK Over Crowding Ratio
Overcrowding Implications for UK House Prices
UK Housing Market Affordability
UK House Prices Real Terms Sustainable Trend
UK House Prices Relative to GDP Growth
UK House Prices Momentum Forecast
UK House Prices and the Inflation Mega-trend
Lets Get Jiggy With UK INTEREST RATES
Is the US Yield Curve Inversion Broken?
UK house Prices and Yield Curve Inversions
Interest Rates How High WIll they Go?
Work From Home Inflationary BOOM?
Formulating a UK House Prices Forecast
UK House Prices 2022 to 2025 Trend Forecast Conclusion
Peering into the Mists of TIme
Risks to the Forecasts
US House Prices Trend Forecast 2022-2024
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Your analyst BUYING the panic selling falling knives.
By Nadeem Walayat
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Nadeem Walayat has over 30 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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