Technology Stocks' Competitive Advantage

Dear Reader, 

Technology stocks have been on a tear in 2020 with the Nasdaq Composite Index of predominantly technology stocks rising 43 % since the beginning of the current calendar year.

Why? Because of technology stocks' competitive advantage. Technology saves people money, time and effort. We are living in the fourth industrial revolution driven by artificial intelligence. Firms are using computers to do manual tasks and cutting human labor. Yes, new jobs will be created, but many of the old ones will be lost. People have to constantly change and learn new skills to thrive.

Yes, technology stocks are overvalued if based on Price/Earnings ratios, which is nearing the historic highs for technology stocks reached in the 2000 dot-com bubble. However, corporations will continue saving on costs, so in the next 7-10 years the future of technology companies is bright.

Especially good are the prospects of companies that extensively apply artificial intelligence. Basically, all technology companies use artificial intelligence in one way or another, so this makes technology stocks winner as a group. What is more, computers are getting ever more powerful and they can do tasks which were considered beyond their reach only 5 years ago. Thus artificial intelligence advances healthcare, data analysis, and industrial automation to unsuspected heights.

Yes, the technology bubble will soon pop, may be by the end of 2022 and the Nasdaq Composite Index could fall by more than 50 %. But from the ashes new technology leaders will rise. Capitalism's creative destruction at its best.

If I have to put a number on it, in the current environment I would say that technology stocks that trade at a Price/Earnings ratio of less than 25 are not overvalued. This does not mean that money losing technology companies' stock prices and technology stocks in general cannot go higher for 2,3 or even 5 years more. Human greed, irrationality and irrational exuberance can reach ever new highs.

So great risk management is essential. If one invests in high flying money losing technology stocks one has to be able to move quickly and close positions so as not to realize destructive losses. If the investments are in technology value stocks like Oracle, Intel, even Apple and Amazon a slower, more patient approach may prove more efficient.

Technology firms' competitive advantage lies in their low cost base, rapid iteration and ability to constantly change by applying limited resources to enhance people's productivity. None of these underlying factors will soon change so  technology's future looks bright in the next 20 years, even though we can suffer a stock market crash, with emphasis on technology stocks in the mean time.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Apple's Competitive Advantage

Dear Reader,

Apple Inc., the iPhone, Mac, iPad and other consumer electronics producer, is consistently top 3 most valuable publicly listed company in the world based on its market capitalization, which currently stands at 2.24 trillion USD.

What is Apple's competitive advantage? Simply put, Apple makes the best hardware. Apple designs, although it outsources manufacturing, its hardware products like iPhone, Mac, iPad and at the same time produces the software that runs these devices in-house. Due to the seamless integration of its hardware and software Apple's products are arguably the best hardware computers, phones and tablets on the market. I use both an iPhone and an iPad, having previously used Android devices, and can vouch for that.

Yes, innovation and the cult towards Steven Jobs' personality and Steve Jobs' marketing genius have certainly helped Apple Inc, but Apple manufactures the best hardware devices on the market. Jony Ive contributed greatly to the stellar design of especially the Macs, which imbued Apple with great marketing and great customer experience. Great content came in a great packaging. 

Yes, Apples' closed system is its biggest disadvantage. The main reason Apple's computers are not ubiquitous is the lack of perfect Microsoft Office, especially Microsoft Excel, integration. Another factor is the high price. But the vertical integration, especially in the production of Macs, has contributed to Apple's capturing approximately 90 % of the personal computers market's profit. The PC market is basically an oligopoly shared between Microsoft's and Apple's operation systems. The smartphone market is well on its way to becoming an oligopoly.

Now Apple produces its own chips, which makes its hardware, Macs especially, even more productive and seamlessly working. Apple's hardware products are the vehicle for its future services revenue growth, which the company plans to drive the future development of the company.

Technology stocks in general seem to be a bubble. When the bubble bursts Apple's market capitalization could fall by 30 % to 40 %, but in 3 to 4 years Apple most probably will again regain its current market capitalization of 2.24 trillion USD and even surpass it by 30 % in 7 years from now. Because, as Warren Buffet, one of the largest investors in Apple's stocks would say, Apple has a durable competitive advantage, the quality of its hardware products.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Technology Stocks in 2021. A Forecast

Dear Reader,

Technology stocks in the US measured by the Nasdaq Composite index are up more than 40 % up until now in 2020. This is a huge gain for any index in historical perspective.

If the Nasdaq Composite notches a small gain or even a loss in 2021 things may calm down and the obvious technology bubble that has formed may not crash abruptly.

I forecast technology stocks will be buoyant again in most of  2021 and could rise by 20 % in the first half of 2021. Then by end of 2022 a huge stock market sell off could ensue lead by a fall in the prices of technology shares.

Technology stocks are simply overvalued. Many of the technology stocks listed in the US have to become leaders in their respective industries, notch up consistent yearly revenue growth rates of above 20 % and achieve net profit margins of above 20 % to substantiate their current valuations. Yes, as far as revenue growth is concerned, many listed technology companies meet the 20 % yearly revenue growth criteria, but most of them have negative net profit margins of more than - 20 %. Many mini bubbles like GoPro, Groupon, Fitbit, Blackberry, DDD have already pricked.

Basically, we are witnessing the greatest financial bubble in history helped on by central banks money printing. Yes, information technology is the future, but technology stocks' market capitalizations are discounting growth that can come to fruition in 30 years in total. And the assumption is that it will happen with something like 90 % certainty. Many things can go wrong. Artificial intelligence may not live up to the current expectations, a war or virus may come which could slow down the fourth industrial revolution we are witnessing. Even if everything turns alright, not all technology companies trading at high valuations today will achieve the huge revenue and profit growth discounted today in most listed technology companies' valuations.

All in all, I think the strong bull run in technology stocks will go until the third quarter of 2021 and a stock market crash could come before end of 2022. The reasons for the crash can be many - erroneous monetary policy, higher bonds yields, coronavirus mutations, wars or just plain old human fear could trigger a huge sell of in equities markets.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Bitcoin and Cryptocurrencies in 2021. A Forecast

Dear Reader,

Bitcoin is currently trading at 23 316.20 USD.

I forecast Bitcoin will continue to rise at least through the first half of 2021 along with US and global stock markets and could reach 40 000 USD in 2021. Bitcoin and stocks, technology stocks especially, however, are a bubble. They are overvalued. The Bitcoin and technology stocks bubble will soon burst and both Bitcoin and the Nasdaq Composite could fall more than 50 % from all time highs.

Out of the ashes of the pricked Bitcoin and technology stocks bubble the new Amazons, Google's etc. will rise like it happened in the 2000 dot-com mania aftermath. Bitcoin and cryptocurrencies will emerge more and more as real money, as new stable coins are introduced. Cryptocurrency is here to stay. Cryptocurrency and information technology, artificial intelligence which underpin cryptocurrencies are the future, because they save money, time and effort for people and companies.

We are in the midst of the fourth industrial revolution. Technology, as in every industrial revolution in humanity's history, will destroy many jobs and trades, but will create even more new ones and humanity will be ultimately better off.

What could prick the current cryptocurrencies and technology bubble? The most obvious suspect are interest rate levels rise of government bonds. Yes, central banks are committed to holding interest rates levels lower for longer, but ultimately someone has to finance governments, the private sector, so it is not always only central banks' decision. A new coronavirus strain and failure of vaccines could cause another deep economic slump, which could trigger stock and bitcoin, cryptocurrencies sell off.

I forecast the cryptocurrencies and technology stocks bubble will burst in 20201 or 2022 at the latest with 60 % falls in the price of Bitcoin and the Nasdaq Composite all time high level. 

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

How High Can Bitcoin Go?

Dear Reader

Bicoin already broke the price level of 23 000 USD per Bitcoin.

I think Bitcoin could go on and rise above 40 000 USD for Bitcoin. As long as central banks keep printing money that liquidity will find itself into various asset classes, Bitcoin including.

However, when the crash comes, Bitcoin's price could fall more than 60 % from its future peak. Bitcoin and cryptocurrencies in general are attracting more and more interest from institutional money managers which increases the liquidity of Bitcoin and helps it on the way to become real money.

Bitcoin, based on both artificial and human intelligence is here to stay into the future, barring governments banning cryptocurrencies. But governments seem to have grasped the utility of cryptocurrencies and both government and central banks want to participate in the cryptocurrency revolution.

We are not far away from the time a major company, Facebook being a major contender, issues a stable coin, a cryptocurrency with stabilized price coupled to some major currencies or gold. Once that happens, cryptocurrencies' popularity could explode.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Tesla about to be Included in the S&P 500. A Valuation

Dear Reader,

Tesla Inc., the electric vehicle manufacturer, is about to be included in the Standard and Poor's 500(S&P 500) index, the main stock market index in the USA and even globally. Tesla's current public market capitalization stands at 658.8 billion USD.

Is Tesla fairly valued? I believe Tesla is the biggest single stock bubble in history in terms of market overvaluation in USD terms. I estimate that Tesla's intrinsic value is around 90 billion USD. Green technology hype, retail investors' Tesla stock purchases and the cult towards Elon Musk's personality have blown the Tesla stock bubble out of all proportion.

Producing electric vehicles is simply too expensive with the current state of technology. Electric cars consume a lot of ferrous metals which are expensive and Tesla barely turns a profit, with some questionable accounting, by booking in advance future sales. Even established producers like Volkswagen, Toyota have profit margins of around 3-4 %, while luxury car brands as BMW and Mercedes hardly achieve net profit margins of more than 6-7%. If it wasn't for the government subsidies for electric vehicles, Tesla would have never turned a quarterly profit with the current state of technology.

What Tesla needs is a breakthrough in technology, which would allow it to produce electric vehicles profitably at scale. All the capital Tesla has raised from venture capital funds, stocks and bonds markets has only one goal - prolonging Tesla as a going concern until Tesla achieves a leap in technology which would allow it to become a profitable, viable business.

Yes, now the inclusion of Tesla in the S&P 500 would most likely increase Tesla's market capitalization and stock price even more as index trackers buy up the stock. But Tesla is grossly overvalued, as far as I am concerned.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Wish Valuation

Dear Reader,

ContextLogic Inc., the ecommerce shopping site trading under the name of Wish, recently staged an IPO on the Nasdaq stock exchange.

The company trades under the ticker WISH. Wish is trading at 13.81 bln. USD market capitalization currently. I believe Wish is fairly valued trading at 7 times Price/Sales based on 2019 revenue. Wish is loss making, but the negative profit margin is not that high at circa 10% for the last few calendar reporting years. Wish made 1.9 billion of revenue in 2020 and lost 136 mln. USD in the same year

Yes, Wish currently trades at a similar Price/Sales multiple to Amazon. Wish delivers products mainly of Chinese origin to Western customers that are price sensitive and of middle and lower income background. Basically, Wish gives a Western stamp of approval to Chinese merchandise delivery. Actually this is not a bad niche, since money is always hard to find for most people.

As long as central banks keep printing money and buying up governments' debts, Wish's stock price will continue rising and it definitely can outperform Amazon's stock price. What is more, if more and more investors get convinced Wish is a technology company its probable trading multiples could get rerated and Wish's stock price could rise multiple times.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Are Cryptocurrencies a Bubble?

Dear Reader,

Cryptocurrencies are the best performing asset class in 2020 up till now.

Are cryptocurrencies a bubble? Yes, cryptocurrencies are overvalued, but they are here to stay. Cryptocurrencies are USD 2.0, a means of exchange, unit of account and store of value, which are the characteristics of money. Since cryptocurrencies are volatile they do not fulfill all these criteria perfectly, but they go far enough.

As more liquidity flows into the cryptocurrency market, cryptocurrencies will get nearer to real money. But sooner or later, the current stocks, bonds and real estate bubble will burst. Stocks measured by the main global indices will fall  more than 30 %, while the Nasdaq Composite could fall more than 60%. Cryptocurrencies fall will closely follow that of the Nasdaq composite.

But for now the everything bubble seems to be in full swing.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

DoorDash Valuation

Dear Reader,

DoorDash Inc., the food delivery business, listed yesterday on the New York Stock Exchange at 55.59 billion USD valuation.

According to DoorDash's IPO prospectus, in the 2019 calendar year the company achieved 885 million USD in revenue and 1.9 billion USD revenue up until September 30, 2020. 

In my humble opinion, the real intrinsic value of DoorDash is around 25 billion USD. The company incurred a net loss of 668 million in 2019. DoorDash seems to be a discounter business which will find it very difficult to turn a net profit.

Yes, during the coronavirus pandemic lockdown, DoorDash's business seems prosperous, but the coronavirus pandemic will someday be over and the growth prospects of DoorDash will not be so bright then. What is more, DoorDash's sector of business is very competitive and basically the only way to compete is on price, which limits future profit possibilities.

Hot money is chasing a small number of listed stocks and even a smaller number of listed technology stocks, which has created a bubble. We are living amidst the greatest financial bubble in terms of USD amount in history. Technology stocks, bonds, real estate are all overvalued. When the bubble bursts, it will be triggered by a crash in technology stocks, which will bring problems in real estate, corporate bankruptcies, banks will record huge bad credit losses. Then banks will turn off the monetary liquidity spigots and we will have a crisis similar to the Great Recession in 2008-2009, but it will be deeper.

And it has all to do with money printing of central banks driven by politicians' desires to stay in power. Human nature rarely changes.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Airbnb valuation

Dear Reader

Airbnb, the shared lodging company, is about to list its common stock on public stock exchanges.

What is Airbnb worth? Airbnb recorded revenue of 4.8 bln. USD in 2019, up 32 % on 3.7 bln. USD of revenue in 2018.

I think Airbnb is worth around 18 bln. USD in the current market environment. Even at 18 bln. USD market capitalization Airbnb will trade at higher multiples compared to Expedia, Hilton and other comparable companies. Yes, Airbnb is a technology company which could potentially trade at potentially 20 times Price/Sales or even more, but not in the current coronavirus pandemic.

Even if Airbnb grows revenue at 20% percent in the next 5 years it will find it difficult to justify a valuation of more than 18 bln. USD. Airbnb is a lodging discounter, so reaching high profitability will be difficult. What is more, due to the coronavirus shock, I believe travel and tourism will suffer in the next 5 years and it may take 7 years before the travel and tourism industry reaches its recent peaks again.

According to media reports, Airbnb can reach a market capitalization of 35 billion USD upon its listing. According my estimate, Airbnb is worth around 18 billion USD intrinsically or around half its expected market capitalization when the shares become public soon. In other words, Airbnb is grossly overvalued as things stand.

Even in its IPO Prospectus Airbnb states that it "may not be able to reach profitability".

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Tesla Intrinsic Valuation. A 5 December 2020 Update

Dear Reader,

Currently Tesla's market capitalization stands at approximately 568 bln. USD. Tesla, the electric vehicle manufacturer, is valued more than Volkswagen or Toyota based on future expectations of brisk revenue growth and in the end reaching profitability.

Basically, Tesla's stock is a bubble like the rest of the current market environment, technology stocks especially. I estimate Tesla's long-term intrinsic value is no more than 90 billion USD. The market seems to price that Tesla would turn the automobile manufacturing market in a near monopoly with Tesla achieving net profit margins of something like 30 % - 40 %. This is an unrealistic assumption to say the least. Ferrari is also valued very richly by the markets based on both Price/Earnings and Price/Sales multiples. People seem to buy into their dreams. This is one of the main reasons for Tesla's record price run. Ferrari, RACE ticker, also. Millennials, or young people born between 1981 and 1996, buy Tesla's stock because they dream of owning Tesla and they buy into the technology hype.

What we are witnessing now is another dot-com bubble like the one in 2000. This time, however, it is the everything bubble driven by money printing by global central banks which supports profligate government spending. The excess money finds its way into real assets also like real estate and common stocks of companies which produce the goods and services we as humanity consume. In search of ever greater profit people buy into highly speculative stocks like Tesla, Nikola, Virgin Galactic which promise clean energy, space exploration and so on. These very dreams may well come true, but Tesla's stock seems to be pricing 10 years of above 25 % revenue growth and net profit margin of around 30 %, which is hard to achieve. 

If Tesla achieves a technological breakthrough and manages to consistently produce electric vehicles profitably, Tesla's market capitalization could even reach 200 billion USD in the long-term. But since most consumers are not very well off, charging high prices for automobiles is very difficult. That is why the major automobile manufacturers have net profit margins of around 3-7%. 

In my opinion, Tesla's intrinsic value is around 90 billion USD as of today.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Cryptocurrencies and Stocks Correlation

Dear Reader,

Cryptocurrencies and stocks have recently exhibited 80% correlation or relation between price moves. I think if stocks fall by let's say 20% measured by the main global stock market indices, cryptocurrencies will fall by more than 40 % due to their more leveraged nature.

Since cryptocurrencies, differently to stocks, do not participate in the capital structure of the company and are not entitled to bankruptcy leftover proceeds, cryptocurrencies' prices are much more volatile that the average stocks' prices. What is more, cryptocurrencies are much less liquid than the US stock market and thus much more volatile.

However, as long as the prices going up party for stocks is going on, cryptocurrencies will continue rising and outperforming stocks. I will not be surprised if Bitcoin's price surpasses 30 000 USD in 2021.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Cryptocurrencies, Millennials and Stocks

Dear Reader,

Bitcoin and cryptocurrencies' boom in general started toward the end on 2015. Millennials, or people born between 1981 to 1996 embraced cryptocurrencies and started trading cryptocurrencies and helped cryptocurrencies rise to record highs in 2017 and are now one of the main driving forces behind the recent run up in Bitcoin and other cryptocurrencies' prices.

After the cryptocurrencies' prices crashed in 2018 many millennials used their recently acquired knowledge on cryptocurrencies and went on to start investing in common stocks of listed companies.

The similarities between cryptocurrencies and stocks are stark. Most cryptocurrencies issued by companies depend on the success of projects of the underlying companies or the companies themselves. One basically has to analyze the financial statements of the companies, much the same way one analyses companies in order to successfully invest in their stocks.

The recent run up in the prices of cryptocurrencies and stocks is due to a large extent to millennials investing. Millennials continue to invest even more money in cryptocurrencies and stocks, so the run up in prices of stocks and cryptocurrencies could continue for several more months.

But, basically, we are in a bubble of stocks and cryptocurrencies driven by technology. However, out of the soon to come crash and chaos new technologies and technology leaders will emerge much like Amazon and Google after the dot-com boom and subsequent crash.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Palantir Prospects. A 22 October Update

Dear Reader,

Palantir Technologies Inc, the artificial intelligence product and service company, recently doubled its market price since its recent IPO.

I forecast Palantir could easily further double its market capitalization within two years. Artificial intelligence is the most promising future technology. We are in in the midst of the fourth industrial revolution where algorithms guided by artificial intelligence are replacing more and more manual labor.

Palantir is at the crest of this new technology wave offering both scalable artificial intelligence products and tailor made services. The company has many contracts with the US government and other corporations. Its revenue is growing with approximately 50 % year on year. Other technology companies like Zoom Video are trading at much higher Price/Sales multiples than Palantir, which means Palantir could further grow into a higher valuation.

Yes, Palantir is heavily loss making, but if the company goes on increasing its revenue by more than 40 % profitability will soon come.

All in all I regard Palantir as 50 % undervalued within the next 1 year, barring a stock market crash lead by the Nasdaq Composite and mainly technology companies.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Cryptocurrencies and the Coronavirus

Dear Reader,

Bitcoin has staged a remarkable rally year to date up 156.7% in 2020 making Bitcoin the best performing major asset class year to date

I think the main reason behind the price increase is that because of social distancing people are using more Bitcoins as means of payment, store of value or unit of account or with other words - money. Yes, there are of course the speculators who in anticipation of this increased Bitcoin usage wave bought in and drove and continue to drive up the price of Bitcoins.

What is more, other cryptocurrencies are doing well influenced by the significant rise of Bitcoin. Cryptocurrencies are here to stay. One of the factors contributing to the rise of Bitcoin and other cryptocurrencies is that governments and central banks are becoming more and more light touch in regulating cryptocurrencies.

The future belongs to automation, algorithms and computing power. The fourth industrial revolution driven by artificial intelligence is upon us. Cryptocurrencies are riding this wave by easing payments, money transfer and ultimately investing. 

Bitcoin could easily go to 30 000 USD in 2021. It will be interesting whether the end of the coronavirus would crash Bitcoin's and other cryptocurrencies' prices. My forecast is that the correction of Bitcoin when the coronavirus ends will not be that deep, not more than 30 % - 40 % .

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Moderna Valuation

Dear Reader,

Currently the pharmaceutical company Moderna Inc is valued at 38.56 billion USD.

Moderna is the famous maker of coronavirus vaccine that also received a large sum of money from the US government to help it develop the vaccine. So far, Moderna's vaccine has shown the highest success rate of 95% and is already in late stage testing.

The USA and Europe have preliminary contracts with Moderna for the vaccine.

I think Moderna is worth 120 billion USD given the potential of its coronavirus vaccine. Yes, there are around 8 major other vaccines in late stage development or even in use, but Moderna's seems the most promising along with Pfizer's.

Actually the coronavirus could further mutate which can make Moderna's mRNA technology even more valuable in future vaccine development. Actually, the messenger RNA  has huge potential for future development of medications for the major diseases of our time.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Does the Coronavirus Vaccine News Change the Stock Market Environment?

Dear Reader,

This week a news on coronavirus vaccine developed by Pfizer and BioNTech seemed to change the near term stock market environment .

Investors sold stay-at-home winners stocks like Zoom Video, Peloton Interactive, Docusign Inc etc. and bought into value stocks like oil production and exploration stocks, commodities producers, industrials and financials.

Is the change in the stock market temporary or permanent? 

I think it is permanent, if the virus does not mutate or the vaccine fails. Yes, Zoom Video, Peloton and Docusign will be worth much less soon. However, if the coronavirus mutates or the vaccine proves ineffective the aforementioned stocks will experience a resurgence.

For the moment, the digital transformation is still going. However, the coronavirus vaccine news definitely slowed the pace of digital transformation. I still see Facebook challengers as Snap, Snapchat application maker, and Pinterest benefiting. The new social interaction is now done in front of the personal computer, the tablet or the smartphone. So social applications like Facebook, Snapchat, produced by Snap Inc, and Pinterest and the stocks of their parent companies will continue to benefit.

Usually, investing in biotechnology stocks is a binary event. You either win a lot or you loose a lot, depending on the approval by the United States Food and Drug Administration agency and later success of the medication. The current stock market situation is vey similar to a binary event. If a coronavirus vaccine is developed and the coronavirus does not mutate, oil and other commodities producers, industrials and financial stocks will rise a lot along with improvement in the economy. Technology stocks will benefit in both situations actually. Technology stocks are a leveraged play on the economy since they require very little capital to be operational, to start off. A coronavirus mutation along with a new economic recession will speed up digital transformation and technology stocks like Zoom Video, Peloton, Docusign etc. in particular, will again benefit. Most other technology stocks will also benefit. If the coronavirus vaccine proves effective, the economy will burst into fast, be it temporary, growth and technology stocks will again benefit.

All said, we are in the fourth industrial revolution of artificial intelligence and technology stocks seem to be winners in almost all possible situations. However, if artificial intelligence does not rise to the occasion and disappoints the very high expectations the world has for it the Nasdaq composite and most technology stocks can fall more than 60 %.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Cryptocurrencies Stocks Investment Opportunites

Dear Reader,

Cryptocurrencies are the best performing major asset class year to date.

The problem with cryptocurrencies is that they are not very liquid, so the major cryptocurrency investors are individuals. This makes cryptocurrencies much more volatile than stocks.

One way to both diminish the volatility of cryptocurrencies and benefit from the huge future promise of cryptocurrencies is to invest in common stocks of listed technology companies that stand to benefit from the cryptocurrencies boom.

Such stocks are AMD, Microsoft, Intel, Apple and many microprocessor chips producers. To produce or mine bitcoins one needs huge computing power. That is why computer and graphic chip producers like AMD are seeing huge demand for their products. AMD much more than Intel, since AMD is a low cost microprocessors producers. Since its recent low in 2015 AMD's stock is up more than 50 times driven by the cryptocurrencies boom. Microsoft sells Microsoft Windows, which is the operating system powering most computers and also large part of its stock appreciation is due to cryptocurrencies. Apple designs personal computers and now even designs its own microprocessor chips, so Apple also benefits a lot from the boom in computer power demand.  Intel designs the chips in most computers and, but since its chips are more expensive it has benefited less from cryptocurrencies.

Actually, the cryptocurrencies boom has much more to run in the future. Cryptocurrencies will profoundly change finance and will make it more accessible.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich

Scenarios Under Which Tesla Could Justify Its Current Market Capitalization

Dear Reader,

Tesla, the electric vehicle automaker, has currently a market capitalization of 407.550 billion USD.

Basically, the single scenario in which Tesla can grow sales and possibly profits into such a valuation is that Tesla becomes the dominant by far automobile manufacturer in the world.

The market seems to be pricing such expectations for Tesla. The route to car production dominance for Tesla goes through electric car future. Currently electric cars are a very small portion of the overall market. As even Elon Musk admitted recently Tesla was on one month away from bankruptcy not long ago. 

Yes, Tesla has a competitive advantage in electric car manufacturing. It is quite ahead in electric vehicle technology from its main competitors like Volkswagen and Toyota. But to grow into its current market capitalization Tesla has to win something like 30-50% of the global automobile market. The problem with electric cars is that they are currently too expensive to produce, because they contain a lot of ferrous metals, which currently makes electric vehicle production loss making. Even conventional combustion engine automobiles are produced with very thin net profit margins. Tesla has to achieve a technological breakthrough to live up to the current promises built into its stock price. If Tesla makes a quantum leap in electric vehicle production technology the company will achieve a healthy net profit margin.

The high market capitalization of Tesla has certainly bought the company some time. Will Tesla achieve its high goals? I think Tesla will be worth around 70 billion USD in the long-term. With other words, Tesla's stock currently is a bubble. Many bubbles like Fitbit, Groupon, DDD, GoPro have already burst.

Tesla's current technology is valuable, though. That is why I think Tesla is still worth 70 billion USD in the long term, 5-10 years on, which is still a lot of money.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich