Speaking of bong hits, here's a public service message from the Crack-smoker-in-Chief. We'll ignore the spelling errors, since it was 4:30 in the morning, and he hasn't slept for two years straight...
One thing all Ponzi schemes have in common is momentum. This rally has been led by the least profitable piles of junk on the planet. Leading some well known hedge fund managers to question whether valuation is even a consideration in investing anymore...
Which is what we call "capitulation":
"The market remains very challenging for value investing strategies, as growth stocks have continued to outperform value stocks. The persistence of this dynamic leads to questions regarding whether value investing is a viable strategy,"
we wonder if the market has adopted an alternative paradigm for calculating equity value"
Yes, there is a new paradigm called "follow the idiot". It's very popular and the only strategy that "works" right now.
Last week I wrote that a momentum blow-off top was taking place. One week later and momentum is rolling over hard. Granted, not everyone got the memo:
"Despite some hints that value-based strategies could be poised for a rebound—following roughly 10 years of underperformance—so-called momentum stocks have continued to lead the overall market of late"
Yes, even Amazon is rolling over. Having kissed the $1 trillion mark earlier this week.
Deja vu of 2016:
Now in what I call "vertical mode":
U.S.-listed Chinese large caps are at an important "juncture"
But really, what could go wrong?
"[Today] marks the end of a consultation period on the imposition of a new round of US tariffs on China."
The tariffs could be set as high as 25% on as much as $200 billion worth of Chinese goods...Beijing has already threatened to retaliate, which would almost certainly lead to another escalation from Washington."
Gamblers are still a tad complacent but that should end shortly:
The Jedi Mind Trick for stunned dunces aka. "Tax cut" is finally wearing off
Recession stocks are the new "momentum" trade. Which is another way of saying that the shift to value is well underway:
"Last month, Trump said Facebook, Twitter and Google were "treading on very, very troubled territory and they have to be careful." He's also said the companies could be engaging in antitrust behaviors"
These stocks can't be owned now
Nor can these...
"Memory markets have worsened in recent weeks. For DRAM [memory chip], demand is weakening, inventory and pricing pressures are building, and vendors are struggling to move bits," analyst Shawn Kim said in a note to clients Thursday. "In NAND [flash memory], there is just too much supply. Earnings risks are emerging from 3Q"
Which leaves insolvent pot stocks:
Warren Buffett loves the Dumbphone even though he's never used one himself and admits he knows absolutely nothing about technology.
May 2018:
"While neither uses the products, both men said they are optimistic about the company, thanks to Apple's management style and consumer reach."
Apple's shares opened at a record high Monday, after Buffett said he wished he could own 100 percent of the company's stock:
The age of the over-confident geezer - who knows everything by knowing nothing - is over. In any honest society it would have ended ten years ago. This month.
