Author: Konstantin Fominykh

Raising rates

Konstantin FominykhLeave a comment

It is totally cool for the Fed Chairman Powell still not “think about thinking” about raising rates…

Nero is taking out his fiddle…
But, the market would not only knock on the Fed’s door, it would knock down the door and the walls off when the inflation would be surging…

Raising rates

When we hear about companies “beating” earnings expectations

Konstantin FominykhLeave a comment

When we hear about companies “beating” earnings expectations, pls keep in mind that these expectations do NOT represent true market expectations. 

 
These are intentionally low-balled numbers from the Sell-Side analysts which were trained for decades to accommodate their covered companies with easy target.
This hypocritical game of Wall Street flattery still goes on.
And, yes, that practise,  reflecting conflicted objectives of Sell Side brokers, is a misservice to both retail and institutional investors …
 
 

 

 

When we hear about companies “beating” earnings expectations

This is VERY important: Janet Yellen saying that rates may have to rise somewhat to keep economy from overheating

Konstantin FominykhLeave a comment
This is VERY important:  Janet Yellen saying that rates may have to rise somewhat to keep economy from overheating

Inbox.

Again, that means that both the FED and the Treasury are actively thinking about normalizing rates.
Or, at least the market is forcing them to do that.
Again, this is a BIG DEAL

This is VERY important: Janet Yellen saying that rates may have to rise somewhat to keep economy from overheating

Technology stocks dynamics starts deviating from the moves in Interest Rates.

Konstantin FominykhLeave a comment

Technology stocks dynamics starts deviating from the moves in Interest Rates.

Yes, Technology stocks being long duration proxies benefit when rates decline (long MaCaulay duration).
Last 2 months, Tech stocks started breaking away from that pattern, essentially that their fundamentals are peaking (yes, very tough sales comparisons in Q2:2021)

 

Technology stocks dynamics starts deviating from the moves in Interest Rates.

The reopening trade reads very loudly from  the earnings commentary, and it is loudly screaming INFLATION

Konstantin FominykhLeave a comment

The reopening trade reads very loudly from  the earnings commentary, and it is loudly screaming INFLATION:

– heavy demand for metal commodities
– surging demand for shipping (cargo rates, containers, etc.)
– double-digit sales growth for residential commodities – pains, lumber, appliances
– surging demand for grains and other soft commodities

The reopening trade reads very loudly from  the earnings commentary, and it is loudly screaming INFLATION

What makes this cycle distinctly different from other cycles?

Konstantin FominykhLeave a comment

What makes this cycle distinctly different from other cycles is that we are starting off with such a high valuation across most industries and sectors…

Would be hard to observe the tug of war on valuation on the cyclical recovery plays  vs. how much the circular growther (Big Tech) which arguably had in 2021 the best year ever.
Well, if anything this cycle looks eerily similar to the 2001-2003 after the post dot.com bubble reallocation of capital

What makes this cycle distinctly different from other cycles?

An uneven economic recovery vs. the very synced economic has many benefits

Konstantin FominykhLeave a comment

I am still puzzled would global economists argue for the benefits of synchronized global recovery…

An uneven economic recovery vs. the very synced economic has many benefits:
1. it allows investors to rotate money globally
2. it doesn’t overburden global sectors with high peaks of productions and steep drops when the whole world goes into a deep “synchronized” recession. Think commodities. Nobody needs crude oil oscillating between $20 and $200 but a healthy and relatively stable $80 or so, would be welcomed by consumers, corporations and politicians….

An uneven economic recovery vs. the very synced economic has many benefits

Don’t miss the high-confidence calls from TenViz

Konstantin FominykhLeave a comment

Too many signals can be overwhelming and not easy to implement into the process, even the well-timed signals. 

So, some of our clients asked us to add a confidence/upside indicator to help them focus on the most favorable setups.

We recently enhanced our tools with this new feature – the Signal Strength. 

Now, clients can sort signals for stocks by the degree of confidence: top 20%, 40%, 80%.

Have you checked your Signal Strength Meter?

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Don’t miss the high-confidence calls from TenViz

Famous growth investor Cathie Wood

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Regarding the famous growth investor Cathie Wood – some people admire her, some think she was just lucky in 2020.

Who knows, but one thing Cathie clearly displays is a remarkable persistence and faith in her views.
Here is her short story of multiple tries and fails (forgive my loose interpretation of her bio from Wikipedia):
– 1977 worked without much glory at Capital Group
– 1980 tried her luck with Jennison Associates
– 1998 she launched a hedge fund Tupelo Capital and failed…
– 2001 she was a CIO at Alliance Bernstein on their Global Thematic strategies and failed to outperform…
– 2014 started the Ark Invest and now at the age of 65 the world knows her name…
What a remarkable story of relentless perseverance in pursuing her dreams and great lesson to us all from Cathie!

Famous growth investor Cathie Wood

What is a difference between a CEO of an established company vs. a CEO of a startup?

Konstantin FominykhLeave a comment
A CEO of an established corporation has to say the right things (to appease politicians and stakeholders) and do very little new (staying the course is, usually, the best strategy).

A CEO of a startup can say many unconventional things (remember Tweets from Musk?), yet he has to do the right things (by constant trial and error) figuring out the right product/market/marketing…
 

What is a difference between a CEO of an established company vs. a CEO of a startup?