This Week on Trends with Friends (July 7, 2024)
Welcome Friends,
Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…
WHEN DID THE ‘DEGENERATE ECONOMY’ BEGIN?
Howard Lindzon shared a historical overview as to the genesis of the “Degenerate Economy.”
He writes,
I spend a lot of time reading and thinking about, now investing in the ‘degenerate economy’.
To be clear for people new to this newsletter, I use the term ‘degenerate’ a little differently than the ‘degens’ themselves do.
If I were to pinpoint the beginning of the ‘Degenerate Economy’, I would go way back to 2008 during the GFC (Great Financial Crisis), and $FAZ. The ticker $FAZ represents a 3x leveraged bearish financial ETF.
The chart below tells the story as the ETF was introduced in 2008 and peaked in 2009 as the markets found a bottom. It trended all day every day on Stocktwits.
Do not shoot the messenger…but the ‘degeneracy’ cannot and will not be turned off.”
Read Lindzon’s full write up here.
WHAT’S THE MOST BULLISH THING THAT CAN HAPPEN?
JC Parets provides his take,
With the S&P500 and Nasdaq closing at new all-time highs this week, the questions remain:
Is this sustainable?
Does the rally have legs?
Can this bull market continue?
This chart of High Beta vs Low Volatility looks a lot like the Equally-weighted S&P500 and Nasdaq100, which has served as a better representation of the typical stock than some of the popular Tech-heavy market-cap weighted Indexes.
An upside resolution here would be the most bullish thing for this market that I can think of.
And I believe the higher probability outcome is, in fact, an upside resolution.
This is a bull market.
USA! USA! USA!
Here’s Charlie Bilello’s chart of the day,
Over the last 16 years, US stocks have gained 502% vs. 104% for International stocks and 65% for Emerging Markets. This is by far the longest cycle of US outperformance that we’ve ever seen.
THIS WEEK IN AI
Michael Parekh walks through his AI Weekly Summary. This week, Parekh previews Big Cap Tech’s “Aqui-Hire” Strategy, Open to Closed AI, Nuclear Power, AI Healthcare via the Apple Watch, Masa Son’s AI investment and more.
THE LUMIDA LEDGER
In this week’s Lumida Ledger, Ram Ahulwalia reviews How AI Will Transform Investing, Brazil, Inflation and How to Bet on Nuclear.
Here’s the money quote,
“Data centers need energy. Nuclear power is the key.”
Review Ram’s full letter here.
FRIDAY LINKFEST
Tadas Viskanta looks at Luck’s Influence in his Friday Linkfest. Here’s a sneak peak.
HAMILTON’S BUST
Ted Merz shares a historical story about Italian sculptor Giuseppe Ceracchi’s impact on the American Revolution.
Merz mentions,
“He spent 18 months persuading scores of Founding Fathers to sit for portraits, including Alexander Hamilton, John Adams, John Jay, Thomas Jefferson, James Madison and George Washington.
By 1792, Ceracchi had returned to Italy where he used terra-cotta molds to sculpt marble busts of Hamilton, Washington, and Jefferson.
He returned to America in 1794 and sent the busts to the men as gifts.
Hamilton and Jefferson accepted. Washington declined, believing it inappropriate.”
TRENDS WITH NO FRIENDS
Trends With No Friends sifts through the noise and discovers stocks above $1B market cap with high relative strength and low social following.
The publication shares 52-Week Highs and Lows sorted by followers on Stocktwits.
Why is high relative strength and low social following important?
Stocks that are outperforming tend to continue to outperform. Stocks that have a low social following are, by definition, undiscovered by the crowd. Stocks that have both Relative Strength and Low Social Following can really outperform as more investors discover them.
This week, Trends with No Friends featured…
Intercontinental Exchange ($ICE), Waste Connections ($WCN), Warrior Met Coal ($HCC), RXO Inc ($RXO), and more.
THIS WEEK’S EPISODE
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And in case you missed it… Howard Lindzon, Phil Pearlman and JC Parets are joined by Michael Parekh. This week, the team reviews India’s Market Boom, Amazon’s Innovation, AI’s Impact on Common Knowledge and more in the latest episode of Trends with Friends.
GET IN TOUCH
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