Wall Street’s Emotional Damage, Silver Stock Pickups & Nio’s Nosedive
Friday Feedback: The “Lost In Emotion” Edition
♫Hit the beat now… ♫
Great Ones, some guys will promise you an investment made in heaven, but I’m gonna stick to my guns.
Like waiting for that stock pick that I might be getting, my dreams have just begun…
Oh, baby … Mr. Great Stuff, am I a fool ‘cause I don’t know just how you feel?
I see. I see.
That said, I think “lost” is a bit too kind. Y’all are freaking buried in emotion, judging from the overflowing Great Stuff inbox.
So, of course, in today’s edition of Friday Feedback, we’re talking about the investor sentiment cycle and where we appear to be right now.
Never heard of Friday Feedback? For shame. It’s the day we answer your market rants, dive into your salacious stock soliloquies and generally let you Great Ones run the show.
Wanna get in on the fun next week? Just drop us a line at GreatStuffToday@BanyanHill.com.
Let’s kick things off with this email from Gary A.:
My money is on this as being where we are at this point in time:
Thanks — Gary A.
No, thank you, Gary!
Thank you for reading and thank you for writing in. I mean, you even made me a nice little chart and saved me the trouble of breaking out MS Paint again.
Gary, you’ll be happy — or not so happy, I guess — that your opinion jives with about 99% of everyone who wrote to us in the past week.
I mean, there’s:
Definitely a bull trap. — Ted B.
We are in a bull’s trap cycle. — Rajesh S.
And, my personal favorite:
I think we are on the rising part of the curve between the “Bull trap” and “Return to normal”.
If I am right, and your chart is correct, we are in for “One Hell of a mess”
One other thing that could also bring everything to a halt is if our young friend Putin starts playing with tactical atomic weapons.
We shall have to wait and see. — Bob H.
“One hell of a mess” … Bob, you have a way with words, my man.
Great Ones, I’m not typically a broad market prognosticator. I prefer to stick to the rivers and the lakes that I’m used to. But I just can’t shake the feeling that there’s something happening here, and what it is ain’t exactly clear.
If I had to pick a side here, I’m siding with Gary, Bob, Ted, Rajesh and the plethora of other “bull trap” readers who wrote in.
I mean, we literally just came out of a massive decade-plus bull rally off the 2009 market bottom. Y’all Great Ones who have been around for a while know that I was calling for a correction back in 2019 before the pandemic hit.
I believe that the pandemic, the economic stimulus and the Federal Reserve’s quick reversal on tightening monetary policy put that correction on hold. But that hold has to end sooner or later, and that correction still needs to happen to blow off all the easy money still flooding the system.
Are we about to see that correction? Well … “about to” is a weird thing on Wall Street. “About to” can mean tomorrow, next week, next month or even in the next couple of years.
What’s more, just because something should happen or needs to happen, doesn’t mean it will when you expect it to. Remember, the market can remain irrational longer than you can remain solvent.
So while I am greatly inclined to believe that we are, in fact, in a “bull trap” phase, the length of that phase remains a very big question.
In fact, the market can be so crazy at times that Great One Earl G. is just as likely to be right:
You ask, I answer. Right now, we are right at the bear trap phase. The market takes off in late spring of this year and forgets to stop until the spring of 2027. THEN all hell breaks loose, and the big crash all the pundits are talking about now will actually happen.
The grinding rise is asset prices will be due more to money printing than economic expansion, but hey, when bread is a hundred dollars a loaf, it will feel good to sell those Boeing shares for ten grand apiece.
The above is not just whistling Dixie. It is based on a very careful look at the 240-year economic cycle, (plus other cycles too numerous to mention) which not a lot of folks pay attention to. More’s the pity.
You can remember you heard it here first.
I really enjoy your work. — Earl G.
Admit it, Earl. You read WallStreetBets on Reddit, don’t you?
I love your short-term optimism and I wish I shared it.
But at least you acknowledge that should this insane bull market continue after the pandemic pause, we are looking at a potentially very, very ugly 2027 when everything finally comes to a head.
And if Earl here is right, trading Boeing stock for bread will be the least of our worries.
Personally, I think we can get too caught up in investor sentiment and market cycles. No one is going to predict the broad market’s whims.
Therefore, keep watch, because you do not know the day or the hour when the master of the house will return.
Did you just get Biblical? Dude, don’t bring the wrath of God down on the market, please!
Me? Wrath of God? Never.
Anywho, I’m going to end this topic with an email from Great One Dan G.:
The market is like a sailor on shore leave. He blew his cash, woke up with a hangover and the realization that he will not get paid for a while. So now he is in deep despair just like the DOW. The upside is that the smart money or the bar owner is sweeping up the floor and knows his money is on the way to the bank.
Personally I subscribe to Charles M.s method / philosophy of investing. Buy it right, hold on tight and do not panic if it drops one night. With good research comes peace of mind that the Markets Manic behavior will have little to do with my long term investing success. (except to remember to buy when everyone is jumping ship on solid companies.)
Best wishes — Dan G.
Dan, my man, I like your plan.
Regardless of where you think the market is in terms of the investment cycle, you can’t go wrong by following Charles Mizrahi’s investment philosophy. That philosophy revolves around doing your research, buying the right stock from a solid, outperforming company and holding on to it for dear life … even if the market $#!ts the bed.
I have said this multiple times myself here in these Great digital pages. Buy stock in a solid company with a solid business plan in a growing market, and you’ll never go wrong.
Now, Charles and I may differ in opinion over what constitutes a “solid company” — he tends to be a lot more conservative than I am when it comes to investing — but maybe we all need that right now, given how lost in emotion Wall Street is.
Am I a fool? At least my friends think so. Que será, que será.
Speaking Of Charles Mizrahi … And Solid Companies:
We’ve told you before that the No. 1 problem preventing the mass adoption of electric vehicles (EVs) is cost. But for EVs, the tipping point — affordability — may finally be arriving, thanks to a brand-new battery technology.
According to Charles, this stunning new technology is about to cut the cost of EV batteries IN HALF … meaning by next year, an EV is expected to cost the same as a gas-powered car.
Now let’s see what else is left in the tank — the Great Stuff inbox!
Remember to email in if you have more to share about today’s topics … or if you just want to rant into the void. We get a lot of that too.
Silver Dollar Pancake Gains
I’m invested in silver coins as well since its cheaper to buy in, now is it better to buy a company before I buy the exchange fund on silver like the index. Which company is best around?
Is China safe to buy yet?
— Mike S.
Hi ho, silver investor!
So you wanna add a little metal magic to your portfolio, eh? Note: I said metal magic, not “magic metal” because … well, we’re not getting into that sorcery today.
Anyway, silver ain’t sexy … but it’s solid.
And it’s shiny. Don’t forget the shiny.
Uhh … sure. You have your reasons for investing in silver, I have mine. If we get a recession or market downturn, silver should do well. It might even fare better than gold, since gold prices are already looking toppy.
If we don’t get a recession or market downturn, then silver still has rising demand from the tech sector and EV makers. So reserving a portion of your portfolio for silver ETFs isn’t a bad idea to take advantage of silver prices.
Now, I wanna make it crystal clear: We’re talking about metal indexes here … not mining companies.
Unless you’re 100% confident in a specific miner and its prospects (lol), sticking with metal ETFs will give you the silver market exposure you seek without leaving you open to the risks of, you know, a miner going under.
I thought all miners do is go underground?
I … I’m not touching that one. As for your question on getting into Chinese stocks?
I’m not biting on Chinese stocks until I see some concrete agreement with the U.S. on reporting requirements to keep the stocks from delisting. If that makes me “late to the game” regarding certain stocks, so be it.
I’m not doing the FOMO on this one, plain and simple. But don’t worry, Mike. You’re not the only Great One looking wide-eyed at Chinese stocks right now…
Do Great Ones Dream Of Electric Vehicles?
Why are you ignoring Nio, is it that bad? It also jumped big time yesterday so what’s the score? Enjoy your ramblings.
— Bert K.
Thanks for writing in, Bert!
But if anything, it’s because my thoughts on Nio haven’t changed since the end of last year.
I still like Nio stock. I still think EVs — whether they’re fully electric or hydrogen fuel-cell powered — are the future of the auto market.
And I still believe Nio’s swappable batteries give it a competitive edge over Tesla’s (Nasdaq: TSLA) current charging capabilities.
Heck, despite falling short of its deliveries forecast, Nio still managed to beat Wall Street’s fourth-quarter sales estimate in its latest earnings report. (For what it’s worth, deliveries were also up 109% year over year.)
The problem isn’t Nio, Bert. It’s China.
See, even though the Middle Kingdom’s master, Xi Jinping, expressed a willingness to keep U.S.-listed Chinese companies on American stock exchanges … both countries still have different opinions when it comes to information-sharing.
That’s the reason we sold Nio out of the Great Stuff Picks Portfolio — not because of stiff EV competition, a disbelief in the company’s EVs or any other problem with Nio as a whole.
And while I find Xi’s recent comments encouraging … I’m still not buying into any Chinese stocks until I see some concrete agreement between the U.S. and China on reporting requirements, just like I told Mike up there.
But you do you, Bert. If you’re a risk-taker and don’t mind gambling on a potential delisting, Nio’s still a phenomenal stock despite its recent drop in share price.
As for me? The China situation’s just too speculative right now … and for that reason, I’m out.
Pssst: Gather ‘Round, Great Ones
Don’t want to leave the EV race completely? We have you covered!
Ian King believes this tiny company could send EV sales surging 1,400% over the next decade … and make early investors massive gains.
Better yet: As a Nevada-based company, this stock isn’t facing any delisting dilemmas like Nio … so you know, bonus points.
Once you’re done checking that out, catch up on all the Great Stuff you might’ve missed online at GreatStuffToday.com!
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