Skip to main content

Let the Games Begin.....

As mentioned in previous blog, Sept started with its reputation and markets did had some volatility with Nasdaq near correction territory (10% down from peak). In a way its healthy so that some froth is out from market and newbie day-traders can get the lesson that markets do go down also! Apple is back below historic 2 trillion market cap and Tesla is back to pre-split "reasonable" valuation. More on this later...

Sept also means start of football (American football...not to confuse with Soccer) season. Normally fall weekends are filled with college football on Saturday and NFL on Sunday. Unfortunately most of the college football is shut down (for legit reasons... no in-person classes..so it doesn't make sense to have in-person games). NFL is taking lessons from NBA bubble season and starting games with almost no crowd. Let's see how it plays out. At least there would be something to watch on Sunday afternoons and Monday/Thursday nights and follow the teams. This year Fall also brings delayed season of Cricket's most watched franchise (maybe world's most watched franchise of any sports) Indian Premier League (IPL). Normally it happens in Spring but due to COVID-19 pandemic, it got moved to Fall and is being hosted outside India (in UAE). While same enthusiasm will be missing, it's always fun to watch IPL games. Personally I am rooting for Mumbai Indians to continue their winning streak.

But the biggest game in the world for next 8 weeks would be American Presidential Election. It has entered in penultimate phase after nearly 2 years of primaries and usual election drama. This election is  going to be one of the most important election in recent history and will decide the fate of America for next decade. The candidates could not be more diametrically opposite (other than their age and race) in terms of policies. Recent polls give clear advantage to Joe Biden but in battleground states, race is narrowing. Is absence of any October surprise, US will have change of guard in Jan 2021. But polls have been completely wrong in 2016. So one can never know till all the votes are counted. This time declaration of winner could take weeks due to higher than normal voting by mail. In 2000, results were declared after US Supreme court decision in mid-Dec. During that time, S&P went down by 5%

So how would markets behave till end of year? Sept/Oct would be choppy as we have many unknowns like Q3 earnings, economy opening, vaccine progress,  holiday season spending, uncertain elections and frothy markets. On top of that, everyone from big players like Softbank to Robinhood day-traders are playing options. All of these are going to add extreme volatility and potential of big gains or losses. So my advice would be to be disciplined and buy stocks of quality companies which have real products people love (e.g. if you have to buy EV player, buy Tesla and don't even touch Nikola which does not even have a single vehicle on road and shorts are circling the company stock). How times have changed....Warren Buffet who likes to buy only stocks of companies which make real products which he can touch or experience is buying stock of Snowflake (symbol: SNOW) in IPO. The Oracle of Omaha had finally acknowledged that software and cloud are real businesses and its time to participate in companies which are building 21st American Century.

Congratulations to Citibank for appointment of first woman CEO of major American Bank. Hopefully 2020 would set the course for first woman President of USA before the decade is over.

/Shyam

Comments

Post a Comment

Popular posts from this blog

Clicks to Tokens: Will 2026 Echo 1998's Boom or 2000's Bust?

My "blogging" was in hibernation last 8 months due to my self-imposed restraint given the environment as well as built-in inertia to get started despite so many interesting events and markets reaching all time highs after taking a big dump around "Liberation Day" in Apr...Around that time I had the blog ready that it would be repeat of Mar/Apr 2020 panic and recovery during onset of Covid Pandemic. The hunch happened to be correct and I was glad that I could keep and take some positions which I am still holding especially around AI theme. But that was then...as 2025 is about to wrap up in 10+ weeks, let's look at what's in store for rest of 2025 and 2026. And what's better time than to start writing again just before one of the most important week on the calendar with multiple key events coming up next week... Fed meeting to decide the course of interest rates - it's almost guaranteed that Fed will cut rates by 25 basis points (2nd time in 2025) and...
Post a Comment
Read more

2026: The Year of Convergence – Melt-up, Moonshots, or Mid-cycle Correction?

Happy New Year! After another period of self-imposed hibernation from the blog—partly due to the festivals, travel, intertia and partly to watch the dust settle on a chaotic 2025—I decided to use the quiet of this New Year’s morning to finally reboot.  Looking back at my October post,  “Clicks to Tokens,”  the hunch about the AI theme held firm. We spent much of 2025 debating whether we were in 1998 or 2000. As we enter 2026, the answer seems to be "neither and both." We have the roaring optimism of the 1920s fueled by "Silicon Spirits," but with the high-speed volatility of the 2020s. So, as the calendar flips, what is in store for 2026? Markets may experience melt-up (S&P touching 8000),  with some moonshots (like SpaceX and OpenAI) IPOs or even see mid-cycle correction bringing down S&P to 6000. That's a wide range and will be decided by Four R's... Here are my thoughts on the " Four R’s ":  Rates, Robots, Rotations, and Real Assets. 1. ...
Post a Comment
Read more

And the Oscar goes to...

It's Oscar Sunday and time for predictions for few categories - before I digress into talking about drama in DC or markets.  First of all, I want to recognize the damage LA fires have done to the beloved areas of Los Angeles and impacted families across all spectrums. My heart goes out to them and wish them recovery and rebuilding of their lives... This year's Oscar nominees and post nomination period had been interesting to say the least. Due to this, the field is wide open in almost all categories and that's what makes prediction game so interesting. Just to set expectations, I would consider a win if I get even 50% predictions correct given the dynamics of nominees this year. So here are my predictions - "And the Oscar goes to..." Best Picture - Anora (surprise could be "The Brutalist") Best Director - Sean Baker for "Anora" (Surprise could be Brady Corbet for "The Brutalist") Best Actor - Adrien Brody for "The Brutalist"...
Post a Comment
Read more