Time or Price? Stock Market (and Sentiment Results)...
On Tuesday morning I joined Kristen Scholer at the NYSE to discuss Market Outlook, Fed, Inflation, Earnings and a new long-term position we have initiated.? Thanks to Kristen, Cheddar, Kayla Hawkins and Rachel Pire for having me on:
Here were some of my notes ahead of the segment:
Inflation Report
The numbers:
When you look at specific items, Car Insurance stands out in terms of both jump in price and weighting in index :
You will also note that the cost of repairing vehicles has jumped - which should bode well for DIY sales at our Advance Auto Parts position and new car sales - which helps Cooper Standard.
Here is the "fed whisperer's" (Nick Timiraos) commentary about it:
On the one hand , cuts look like they have been pushed out to at least July (for the time being) - which is restrictive:
On the other hand , the Fed is planning to cut Quantitative Tightening in half - according to the Fed Minutes released on Wednesday.? This is accomodative - especially because M2 Money Supply is still well above trend:
The chart we posted with a warning last week :
Has now morphed into this version of breakdown this week:
Will our hedges work out as we anticipated a 3-8% pullback, or will the market continue to correct in TIME (flat last 5-6 weeks) versus price?? We don't know - which is why we are positioned for all eventualities.? Small leveraged hedges/shorts plus long equities:
GXO Logistics
This is a new position across portfolios with space.? It is one of Brad Jacobs' companies.? For those of you who don't know Brad Jacobs, he has the Midas touch.? He successfully executed 5 public company - multi-billion dollar rollups - and then wrote a book on how he did it "How to Make a Few Billion Dollars ."? I am halfway through the audiobook (it's what I do at my daughters' swim meets)!
Here's how he made $4B for himself and tens of billions for his shareholders:
领英推荐
And now we have the opportunity to get in on one of the spinoffs from XPO (at a >50% markdown from highs) that we believe is "just getting started."
GXO gets paid per client units, so as the economy seesawed from "goods" consumption to "services" consumption post-pandemic, the perception of the stock fell - even though the performance of the underlying business held together:
Conditions are now normalizing back to a balanced demand for goods and services.? I posted a summary of my notes at the top of this article for this new position - along with my interview from the NYSE.? We have a nice sized starter position and intend to buy more over time if the prices weaken on market pullbacks.? As always, opinion, not advice - see terms above.
More granular explanation of the business from Investor Day Presentation around time of Spin: Presentation Transcript
Most recent earnings call transcript: click here
Now onto the shorter term view for the General Market:
The CNN “Fear and Greed” declined from 62 last week to 54 this week.? You can learn how this indicator is calculated and how it works here: (Video Explanation )
The NAAIM (National Association of Active Investment Managers Index) (Video Explanation ) dropped to 84.24% this week from 103.88% equity exposure last week.
Our podcast |videocast will be out later today. Each week, we have a segment called “Ask Me Anything (AMA)” where we answer questions sent in by our audience. If you have a question for this week’s episode, please send it in at the contact form here .
Congratulations to all of the new clients that came in during our early Q1 raise.? We are now re-opening to smaller accounts $1M+ again starting today and will remain open for the next two weeks.? To see if you qualify and to take advantage of this opening click here .? Larger accounts $5-10M+ can access bespoke service at their preference here .
*Opinion, Not Advice. See Terms
Not a solicitation.