Jason & Luke break down the Archegos Capital Management liquidation situation. It actually brought back memories from their trading days during the Global Financial Crisis.
They recap a few liquidations they handled back in the day. It made a big impact on them.
Finally, they circle the wagon on a mega-outlier stock, Mastercard Incorporated (MA).
In this video:
- Outlier Event: Archegos Capital Management (forced liquidation)
- Memories of the Global Financial Crisis (GFC)
- Data update: Big Money Index keeps falling
- Outlier stock: Mastercard Incorporated (MA)
Enjoy and leave us some feedback!
Deja Vu All Over Again
Hello Lucas and Jason
Thanks for this fun event that refreshingly cuts through the BS surrounding last week’s hedge fund meltdown. May I ask which of the four Chinese stocks that got hit have fundamentals that attract the Big money and become noteworthy in the BMI please? From their charts they are all still trading at substantial discount, even though the news is out there.
Kind regards
Udayan
Udayan! Thanks for writing in.
Some of the names caught in the selloff are high-quality for sure. We would expect a bounce once the selling is over.
As for specific tickers, you’ll need to subscribe for that.
Gentleman,
Totally appreciate Your insights. As an old broker who baled out to lower stress, really appreciate Your youth and experience. Now just an impoverished investor, noticing old data models suggesting stocks overall valuations over-played second only to the 2000 dot.com debacle.
Even MasterCard with nice revenue and decent dividends at 57+ PE ratio!
That is way beyond an historical safe average, by at least 50%!
Taking short term gains always makes sense. You were right getting MasterCard gains. If we could see the future, we’d all be wealthy on other people’s money. I blew Apple owned in early 90s at $19. If Bill Gates had not loaned them $250MM to avoid monopoly status, we would not know the company name today.
The broader market is way overbought. Praying for serious correction soon. And all boats will fall into a well deserved PE and much lower dividends closer to real borrowing rates.
Hey James –
P/E can be deceiving. Comparisons for this year are skewed due to the pandemic slowdown.
Once the world fully reopens, you gotta think that E is gonna climb, thus making the P/E contract.
As far as short-term gains, it definitely makes sense for a lot of people. But, Peter Lynch said it best, “The real key to making money in stocks is not to get scared out of them.”
Gents,
Really appreciate Your answer on E. However, market wide P/Es along with other classical data showed markets were hedged above a traditional Mean well before the “pandemic.”
Suppose a fairer measure of market P/E today should consider perhaps non-cyclicals.
Even if earnings double near term, does that take the cyclical market below 25 P/E?
Thank You for hard work and insights.
Only leveraging industrial bond shares sales now. Still happy with 5% regular returns on higher share purchases.
Markets have been trending expensive for sure. But, the reset button was hit last March. We see growth for the next few years.
If that’s the case, many stocks will benefit. Earnings will increase. That tends to be the biggest driver of stock valuations…future profits.
Gents,
Just picked these numbers from csimarkets:
“Consumer Non Cyclical Sector
Price to Earning ratio is at 34.21 in the 1. Quarter 2021 for Consumer Non Cyclical Sector, Price to Sales ratio is at 2.14, Price to Cash flow ratio is at 11.32, and Price to Book ratio is 3.95”
Still pretty high numbers…
The great news is that no matter what the valuations as a whole are, great companies will keep climbing regardless…with enough time.
Put it this way, I wouldn’t be able to sleep at night if I wasn’t invested…that’s risky business.
Short-term, investing is risky. Long-term, not investing is risky.
Shoulda been, Gentlemen Not …man!
Gotta love Bill Gates auto spell correction. Pretty sure plenty of stress out there from it along with his market manipulation…