Today’s another downward profit revision from Target confirms what quants know really well but fundamental investors prefer to ignore:

profit revisions tend to recur!It is a cockroach theory… The rule of thumb – you need to see at least 3-4 negative profit revisions before the negative wave peters out, and, occasionally, it might take a couple of fiscal years!Fortunately, since Target is such an old business – we have data since 1992 on their earnings.Have a look at ...

This is a BIG deal:

the mighty Microsoft just issued weak forward guidance.Have a look how much MSFT benefitted from the Covid lockdowns and stimulus. Microsoft’s earnings have doubled in 2 years!Insane!For all economic and fundamental reasons we should expect its earnings to drop at least 25-30% now to get back in trend. We will have a lot of these earnings guide ...

Among the dearth of positive news in the Technology space, Salesforce stood out!

They beat and raised! – Sweet but, at the same time they cautioned about “more measured pace of hiring going forward”. That stands in strong contrast to the pattern of the behavior of their outgoing celebrity CEO, who is always “pedal to the metal”. Again, our simple take is consistent with the broad trend in Technology ...

Why recession and a bear market would be painful….

The incomplete list of major drags on stock market is extraordinary heavy: huge slowdown in demand on Covid-related and demand pull forward reversal in Covid fiscal stimulus  higher taxes (on a margin) higher inflation higher regulation (of Technology, Crypto, Energy, Infrastructure) higher interest rates China slowdown Besides these, you have nothing to worry about! ...

The market wouldn’t find a bottom until it starts going down on bad news.

Just the fact that a relatively small SNAP was able to knock off 1.5% from Technology and 2.6% from Discretionary stocks tells us how early we are in the market selling process. Remember, that the market never makes bottom on good news, it makes a bottom, when the last seller is gone. Unfortunately, we are ...

How low can Bitcoin plunge?

I.e. what would be a bet-a-farm kinda bargain?Two ways to frame this – fundamentally and technically: 1) FUNDAMENTALLY: The dominant player among cryptocurrencies would have to a dominant blockchain protocol.Yet, we’ve seen the dominant player in crypto yet.Today’s landgrab is highly reminiscent of the dotcom bubble and the subsequent collapse of the early 2000s.We can simplistically compare investing in ...