This Week on Trends with Friends (November 10, 2024)
Welcome Friends,
Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…
SILLY MODE UP
Markets ripped following the US Presidential election and Howard Lindzon is enjoying the market’s silly mode up. Here’s the money quote,
Bear markets are rare but so are melt ups. Bear markets are miserable and melt ups should be fun.
In late September, back on this site and on our weekly show Trends With Friends we put forward the case that it was and would continue to be a ‘shitstorm for the bears’. You can rewatch here. JC, Phil, Michael and I do a lot of work each day and in very different ways reading the ‘tape’, the sentiment, the money flows, the sectors, the fundamentals and the prices. We take the Tuesday ‘live’ show very seriously. Of course we are having fun, but the show is our own homework to try and figure out trends and momentum and direction in the markets of sectors and stocks. Back in September we did not care to predict the election, but what caught our attention was that the markets did not seem to care who was going to win the election. Stocks wanted to go higher.
So here we are post election with a Republican romp and the markets were right not to have been scared. In fact, for whatever reasons – the podcasters will give you 100’s of them now – the markets are in silly mode up.
THIS WEEK IN AI
Michael Parekh reviews election implications for AI, shifting enterprise capex, AI infrastructure and more in this week’s AI Summary.
DANGEROUS WEEK FOR INVESTORS
Larry Thompson is cautiously optimistic following the market’s monster week. Thompson writes,
The markets ripped this week. Everything, Everywhere, All at once, Was up.
That’s what makes this week dangerous.
If you’re a value investor, it’s “Ha, I was right.” If you’re into crypto, the same. Growth? Same thing.
All it does is feed the ego and create false confidence in our abilities.
It’s easy to forget about risk management and lose sight of our plan, falling into the trap of chasing shiny objects—constantly seeking stocks that are soaring, even if they don’t align with our strategy or conviction.
BACK TO BASICS
The election is over and Phil Pearlman is getting back to basics. Phil shares,
It has been a contentious year with the nation divided and the two sides at each other’s throat.
But now the election is over and it is critical to our wellbeing that we get back to doing the things that help us thrive over the long term.
For me there are four things, nutrition, body movement, rest, and family. These are constant. These are the basics.
The Basics are the things that simplify the world, the things that energize, the things that let me let go of poisons like anger and ego.
THIS WEEK IN CHARTS
Charlie Bilello’s weekly chart review highlights how investing based on political beliefs leads to detrimental underperformance. Charlie comments,
Historically, has mixing politics and your portfolio been a good idea?
No. The stock market tends to go up during most presidencies and over long periods of time buy-and-hold has trounced a strategy of investing in only republican/democratic administrations.
As we approach year-end, make sure you have a portfolio and a plan that will meet your goals and needs for the future, regardless of which political party is in power.
ALUMNI NETWORKS
Ted Merz shares how alumni networks differ at Bloomberg compared to Wall Street’s largest institutions. Merz mentions,
Goldman Sachs has an interesting tab on the “people” section of the website that clients and employees can login to: a link featuring its alumni network.
It seems strange for an investment bank with a cut-throat reputation to celebrate people who left. It doesn’t seem like vampire squid behavior.
And the bank puts editorial muscle into the feature, providing links to press articles about former employees and a place to search for jobs that are posted at Goldman and elsewhere. There are more than 110,000 members of the group.
Goldman isn’t alone. JPMorgan and Morgan Stanley host similar pages.
The strategy isn’t crazy when you realize that Goldman has a history of employees leaving for jobs in government and other industries and returning the wiser for the experience.
Bloomberg, where I worked for three decades, has a different philosophy.
The original policy articulated by Mike Bloomberg in the 1980s and 1990s was that employees who quit could not return. It was viewed as a deterrent to leaving.
In the 1990s, I heard Mike say that he wouldn’t attend any going away party for people who left. He said anyone who left for a competitor was taking food out of the mouths of the employees who remained.
It seemed a bit harsh. But the 1990s were like that. Lots of things were said and done on Wall Street that would never fly today.
WHY WE LOVE SPORTS
Tadas Viskanta’s Saturday linkfest’s theme is Why We Love Sports. Here’s a sneak peek…
TRENDS WITH NO FRIENDS
Trends With No Friends sifts through the noise and discovers stocks above $1B market cap with high relative strength and low social following.
The publication shares 52-Week Highs and Lows sorted by followers on Stocktwits.
Why is high relative strength and low social following important?
Stocks that are outperforming tend to continue to outperform. Stocks that have a low social following are, by definition, undiscovered by the crowd. Stocks that have both Relative Strength and Low Social Following can really outperform as more investors discover them.
This week, Trends with No Friends featured…
Clearwater Analytics ($CWAN), Vertex ($VERX), Ingredion ($INGR), Frontdoor ($FTDR), Interface ($TILE) and more.
THIS WEEK’S EPISODE
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And in case you missed it… Howard Lindzon, Michael Parekh, JC Parets and Phil Pearlman are joined by Zach Pandl to discuss election outcomes and their impact on Bitcoin, Palantir, $9T in AI investments and more on the latest episode of Trends with Friends.
GET IN TOUCH
If you share insight on the market and would like to contribute to Trends with Friends, send us an email.
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