Cryptocurrency. Future Opportunities

Dear Reader, 

Cryptocurrencies are shaping up to be an emerging leading asset class. Bitcoin in USD has outperformed spot gold quoted in USD and the major global stock market indices since the beginning of 2020.

Cryptocurrencies, though, are much more volatile than commodities and stocks, especially. When investing in cryptocurrencies a stellar and rigorous risk management has to be applied. The investing in most cryptocurrencies issued by companies is akin to investing in stocks. One has to analyze carefully and correctly the underlying business of the company to determine if the attached cryptocurrency is undervalued. When investing in cryptocurrencies financial statements analysis is equally important when investing in stocks.

Since their more leveraged nature, cryptocurrencies are not entitled to a part of the estate of the company in case of a bankruptcy, cryptocurrencies tend to rise much more and fall more abruptly than common listed company stocks.

But the future belongs well and truly at least partly to cryptocurrencies. Global central banks are becoming more and more lenient toward cryptocurrencies investing. The threat of regulation was and still is the last hindrance to the mass adoption of cryptocurrencies as a means of exchange, store of value and a unit of account. Or with other words - money. Cryptocurrencies, however, have one great advantage - they can, if picked wisely, increase wealth much like common stocks.

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

Nikola Corporation Valuation

Dear Reader,

Nikola Corporation, the company planning to produce zero-emissions automotive vehicles is currently valued at 7.38 billion USD. And Nikola Corporation used to be valued at more than 20 billion USD until recently.

As far as I am concerned, Nikola is not worth more than 1 billion USD currently. Nikola Corporation is currently just a story stock. All it has behind it is the promise it will start producing electric trucks in 2023 under a General Motors partnership. But designing and ultimately producing electric vehicles profitable is an extremely hard task, as Tesla has shown.

Nikola Corporation's stock price is apparently mainly driven by retail investors like Tesla's. Retail investors, especially people with technology background, are infatuated with electric vehicles and the future. There are of course car enthusiasts, as well. Electric mobility may well be the future, but the valuation multiples of Tesla are crazy. Nikola Corporation's valuation metrics are absurd. Nikola will make something like 100 000 USD in revenue in 2020 and it trades at 7.38 billion market capitalization. Only losses are recorded up till now.

We are most definitely in a bubble. Every stock that has a good story attached to it like electric mobility, plant meat, cryptocurrencies etc. basically explodes in value. Apparently too much money is chasing too few listed companies. I believe even after the recent fall the Nasdaq Composite is overvalued by 45%, while the S&P 500 and the Dow Jones Industrial Average are overvalued by 30%. However, the free liquidity coming from global central banks can prop up this virtually all assets, stocks, bonds, real estate bubble just a little bit longer.

Nikola Corporation is a glaring example of a bubble. You invest in future earnings, without having almost anything in the recent past to lean on. Only a promise. A pure speculation. Yes, if miraculously all works out perfectly and Nikola Corporation makes many multiples of the initial investment for its shareholders everything is fine. But I estimate the chances of such an event are no more than 6 %.

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

Cryptocurrency Investments. A Detailed View

Dear Reader,

Cryptocurrencies have become a legitimate investment vehicle. Due to their high volatility, though, one has to proceed with extreme caution when investing in cryptocurrencies. However, long-term investing still works. If one has invested in Bitcoin in 2015 when cryptocurrencies started off, he or she would have made 30 times multiple on his or her investment. Investment in other fringe cryptocurrencies would have brought even greater riches.

The future promise of cryptocurrencies displacing at least partly paper money is huge and is bound to bring more interest and progress for cryptocurrencies. The price of cryptocurrencies has to go up, though, in order for the investment interest to really explode. Cryptocurrencies, if left to the invisible hand of the market, are sure to seriously disrupt a stale and elite sector like finance and financial intermediation.

Initial Coin Offerings have already partially disrupted Initial Public Offerings of stocks. Bitcoin will remain the flagship product of the cryptocurrencies revolution. However, cryptocurrencies issued by particular companies will quickly become mainstream and augment stocks as an investment vehicle. Cryptocurrencies investing is not a threat to common stocks investing. On the contrary, cryptocurrencies investing will bring about newbie investors who will dabble into common stocks investing later. 

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

Unity Software IPO Valuation. Gaming

Dear Reader,

Here I am going to attempt to value Unity Software Inc., the cross-platform game engine developer that went public through an Initial Public Offering last Friday, 18th of September 2020.

Public markets currently value Unity Software at 18 billion USD. Unity made a net loss of 163.2 million USD on revenue of 541.8 million USD last year which makes for a Price/Sales ratio of 33. Unity Software revenue grew 42 % in full year 2019 compared to 2018 full year revenue. For the last two reported quarters up until June 2020 Unity software grew revenue with circa 40% year on year at a 720 million USD yearly run rate. The negative net profit margin of Unity at approximately - 15% is not that bad actually.

I estimate the current intrinsic worth of Unity Software is around 12 billion USD. If the company continues to grow so fast it may well grow into its current 18 billion USD market valuation in 4 years and even surpass it by a wide margin.

The negative net profit margin of approximately -15 % for the last two available quarterly results actually speaks that Unity is not very far from profitability, especially in comparison with the negative net profit margins of other high growth technology companies of - 40% or even lower. The - 15 % negative net profit margin is a marked improvement on the circa - 30% negative net profit margin in the 2019 calendar year realized by Unity software.

And gaming is now hot during the coronavirus pandemic. Lockdowns seem to be coming again. And its game engine is used in other industries which require augmented reality technology, as well, like automobile manufacturing, which requires complex graphics.

All in all, I believe Unity Software is 33% overvalued currently That said, Unity Software has bright prospects in the next 2-3 years driven by the gaming boom caused by people staying at home due to the coronavirus disease.

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 Are the Ultimate Financial Technology. Fintech

Dear Reader,

What is finance actually? Finance is about the movement of money. And cryptocurrencies are the ultimate financial technology. 

Money is a store of value, means of exchange and a unit of account. Cryptocurrencies have proven relatively effective  as means of exchange and a unit of account, but they are lacking in terms of store of value due to their high volatility.

The high volatility is a direct consequence of the relatively still low liquidity of cryptocurrencies. With the larger adoption of cryptocurrencies the liquidity of the crypto market will improve and people will be able to count on cryptocurrencies to store their wealth. Due to their decentralized nature, cryptocurrencies could finally become more secure than fiat money, due to the wisdom of the crowd.

If the price of bitcoin and other cryptocurrencies in terms of USD shoots up, for whatever reason, this would create a great buzz around cryptocurrencies anew and will speed up the adoption and the liquidity creation of the cryptocurrencies market.

Now even the largest central banks like the Federal Reserve and the European Central Bank are seriously thinking of minting their own cryptocurrencies. What actually commercial banks have been doing for centuries with the reserve multiplicator. Due to the easier, less burdensome and cheaper process initial coin offerings could become prolific again since they grant access to funds for very immature, but promising start ups. 

So, as far as I am concerned, if the market is left alone it will only be a matter of time before cryptocurrencies become mainstream.

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

Snowflake IPO Valuation

Dear Reader,

Snowflake Inc., ticker SNOW, the cloud-based data-warehousing company priced an IPO this week and Snowflake's stock price more than doubled on its first day of trading.

What is the intrinsic worth of Snowflake? Snowflake is grossly overvalued.

Based on 2019 revenue of 265 million USD at market capitalization of 67 billion USD Snowflake is trading at 253 Price/Sales ratio currently. This is basically crazy. Even if Snowflake grows revenue at 120 % year on year as it has done it for the last reported quarter it will take 7 to 10 years for the company to grow into its current valuation.

The real intrinsic value of Snowflake, according to my opinion, is around 15 billion USD. Why? Even fundamentally Snowflake's business model is not very sound. It is a cloud-based data-warehousing company that wants to compete with Amazon, Microsoft and Alphabet on cloud services. At the same times Snowflake relies on Amazon, Microsoft and Alphabet for its cloud infrastructure. Which is basically ridiculous.

I know Warren Buffett invested more than 500 million USD in Snowflake's IPO, but Berkshire Hathaway did that mainly for fear of missing out. I think Warren Buffett has watched too many technology companies shoot up in market capitalization and is tempted to participate in the party.

We are in a technology bubble. Yes, technology companies are good investments but not at these prices. The market is overpaying heavily for growth, much like in the dot-com boom and subsequent bust in 2000. Yes, technology is the future, but these values of  both the largest capitalization technology companies and some mid-cap technology companies is totally unfounded. The Nasdaq is overvalued by 60% to 70%. However, in order the bubble to be popped there has to be some liquidity problem, mainly at the banking sector level. Either the Federal Reserve has to start raising rates or for example banks can start making losses on their technology stocks investments which would both lead to a credit crunch.

When the hot capital stops chasing the hot technology companies, the Nasdaq composite will fall by 70%. Technology, however, will continue to be the future. After the dust from the next crash settles, new technology leaders will emerge.

Capitalism's creative destruction will create its winners and losers. As always.

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 as an Alternative to Stocks

 

Dear Reader,

Cryptocurrencies are the first major new asset class to appear in decades.

Actually, cryptocurrencies are alternative to common stocks investing. As Philip Fisher wrote "Common Stocks and Uncommon Profits", but the profits from cryptocurrencies investing are potentially much larger. For the simple reason that cryptocurrencies are not part of the capital structure of the firm and do not participate in the bankruptcy estate of the firm. So if you hold a company's cryptocurrency and the company goes bankrupt you are essentially left with nothing. While if you hold common stocks, you could still salvage some of your initial investment after bondholders and preference shareholders take their dues.

Cryptocurrencies are, essentially, much more leveraged play on a company's future than common stocks. If the company's project on which the cryptocurrency is based turns out to be successful, the investor in the particular cryptocurrency could make ten times his investment or more. And there are not more than a couple of dozen US listed stocks that have achieved ten times profit on the initial investment since 2000, for example.

Cryptocurrencies investment is, of course, fraught with risks. Due to the implicit leverage one can lose 100 % of the initial investment very quickly. One cannot, however, lose more than 100 % of one's initial investment.

Digital currencies, or cryptocurrencies, however, are the future. Cryptocurrencies are more efficient, more secure, decentralized and with higher profit potential than fiat currencies or stocks. Cryptocurrencies are essentially the democratization of currencies and finance. And the regulators, central banks and securities and exchange commissions, sooner or later, will be forced to realize that and allow more leeway for cryptocurrencies.

In short, cryptocurrencies could well turn out in the future, with more liquidity coming to the cryptocurrency market, a niche, risky but partially viable alternative to common stocks investing.

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 Valuation. A September 2020 Update.

Dear Reader,

Apple Inc., the producer of iPhone, Mac, iPad, Appstore, Apple Music etc. is currently valued at 1.92 billion by the public stock market.

I estimate the mid-term intrinsic worth of Apple is around 1.2 trillion USD or more than 34% below the current market capitalization.

Why? Because US technology stocks, especially the biggest five Apple, Amazon, Alphabet, Microsoft and Facebook are in a bubble, akin to the dot-com bubble. 

In fact, in my opinion, the current technology and other stocks bubble is the biggest bubble in history, in market capitalization to be lost, at least!

The market simply implies that everything will be rosy, the economy and technology stocks' revenue and earnings will grow forever at a rapid clip. As the coronavirus showed positivity's value is limited, to say the least.

Nasdaq composite's recent fall could actually extend beyond 40% from the recent peak. However, that is not what I think will happen. The real fall in the main global stock market indices will happen after the November 3 US presidential elections. Then the Federal Reserve will take its foot off the money printing gas pedal and the economy and the banking sector will be allowed to fall. So the current stock market decline will stop at around 20 % - 22 % from the recent peaks.

Apple has staked its future on services, according to Wall Street research analysts. Actually, that is a misleading conception. Apple uses its services to lock in services into its walled off garden of iPhones and iPads. Even if Apple mildly increases its market share in smartphones and tablets that will increase its revenue and earnings quite a bit.

So Apple's future is firmly connected to its hardware devices. That said, revenue from services has been growing much faster than hardware and is now formidable both in terms of percentage of Apple's revenue and an absolute sum.

However, at a Price/Earnings ratio of 34 the market simply overvalues Apple and its prospects. Apple is already huge in market capitalization size, revenue and profits to grow like a small or mid-size technology start up. The smartphone market is already in a decline. Television sets, in my opinion, could be an interesting avenue for future growth for Apple. In order to justify its current valuation Apple simply has to enter, win and dominate new markets, which is easier said than done.

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 Far Will the Nasdaq Composite Fall?

Dear Reader,

The Nasdaq Composite briefly entered into correction territory on Friday, or a decrease of more than 10 % from its recent peak.

How more has the Nasdaq Composite to fall?

I forecast the Nasdaq Composite will fall more than 22 % from its recent peak. Then, technology stocks, especially the one with larger market capitalization will start to look slightly undervalued.

Mind you, if the Nasdaq Composite falls by 25 %, single technology stocks, especially the hot mid capitalization ones could fall 30 % or 40 %.

It seems that technology stocks options investing by large funds, Softbank, and retail investors drove banks to buy technology stocks to hedge the technology stocks options they have written. This frantic buying, of course, fueled the recent technology stocks rally to crazy levels. So it is now time for a bear market in technology.

Value stocks will lose less value than technology stocks, this time around. And banks will realize large mark to market losses on their technology stocks holdings. If the coronavirus epidemic continues unabated, the fall in the main indices may not end up arrested at 20 % - 30 % and DJIA, S&P 500 and the Nasdaq Composite could crash more than 40%.

However, my bet is that the Nasdaq Composite will decline 25 % from its recent peak, while DJIA and S&P 500 could lose around 15 % -17 % of their value in the space of 1-2 months. Then the US stock market indices will slowly start to recover.

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

Google's Future. Alphabet

Dear Reader,

Alphabet, the company behind the ubiquitous search engine google, has lately trailed significantly both in market capitalization and stock price appreciation the other giant technology companies Apple, Amazon and Microsoft.

Why? The main reason is that the main growth engine for Alphabet's revenue and profits, namely the internet advertising market, is 3-4 years away from saturation. With other words, the growth rate of the internet advertising market is slowing down, so Alphabet is not expected to grow its revenue and profits as fast as in the past and this is reflected in its stock price, which appreciated less than that of Apple, Amazon and Microsoft year to date.

The next growth frontier seems to be the cloud services market or infrastructure as a service market. Alphabet, Google, is the third largest competitor in the cloud services market behind Amazon and Microsoft. But Alphabet's cloud infrastructure as a service market share is only 4.0% compared with 47.8% and 15.5% for Amazon and Microsoft respectively in 2018.

Alphabet has to diversify its revenue away from its google search advertising which makes approximately 61% of its most recent reported 2020 quarter revenue. Yes, YouTube ads revenue are growing fast since video watching is a mega trend.

So basically Alphabet has staked its future on cloud services and videos. The market for video advertisements, television ads including, is much bigger but the market for cloud services is growing at a rapid clip. Alphabet needs to increase its market share in cloud services fast, if it wants to add value to shareholders and ultimately reach much higher market capitalization.

That said, I believe that Alphabet, Apple, Amazon, Microsoft and Facebook are currently overvalued by more than 30 %. The overvaluation at Alphabet is comparatively smaller, due to the not so high Alphabet's, Google, stock price appreciation as of late.

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 Technology Stocks Investing Observations

Dear Reader,

Cryptocurrencies and technology stocks investing have many things in common. Cryptocurrencies are essentially an information technology that allows you to invest in the projects of the company that has issued the cryptocurrency. Bitcoin is the grandmother and a bit different, though.

Both in cryptocurrencies and technology stocks investing the most important thing is risk management. Just look at Zoom Video Communications(ZM)'s stock. It went up more than 50 % in two trading days, just to fall approximately 20 % from its most recent peak again in the space of two trading days.

Cryptocurrencies exhibit even greater volatility than technology stocks due to both  lack of participation in the bankruptcy estate of the company and the still limited liquidity of cryptocurrencies. It is very difficult to apply Warren Buffett and Benjamin Graham's concept of long-term investing to technology stocks and cryptocurrencies. Yes, Netflix, Amazon, Microsoft, Apple, Google, Facebook, Nvidia and other technology stocks have proved great investments if you held them for more than 2-3 years. But the Nasdaq Composite and technology stocks look now like dangerous bubbles. One can enter at the top and quickly, in the space of 3-4 months, lose more than 40% of his or her investment.

The 'problem' with Warren Buffett and Benjamin Graham's concept of long-term investing mantra is that the market has always recovered in the last 70 years. However, if we enter  an economic depression, which the coronavirus could easily trigger, holding your stocks and cryptocurrencies for the long-term might not prove a great idea since prices could simply not recover or exceed previous levels.

Cryptocurrencies are an interesting case. Some people believe cryptocurrencies are United States Dollar 2.0 or the next global currency. If cryptocurrencies really turn out the next global currency and the next revolution in money and finance, cryptocurrency investments could prove a fabulous opportunity.

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

Is This the End of the Technology Stocks Rally?

Dear Reader,

The main indices in USA fell a lot in the past two days. The Nasdaq Composite and technology stocks, especially, lost a lot of value.

The Nasdaq Composite has been on a tear in the last rolling year making constantly all time highs even after the coronavirus pandemic shutdown's most acute phase.

Is this the end of the recent technology stocks bull market? Yes, I think the Nasdaq Composite will fall more than 20% from its recent all time highs. Why? Simply because technology stocks are overvalued by a wide margin. Overvaluation is the reason for stock markets correcting currently. Just people who have made large gains from the recent market rally are using every wobble in the market to realize their paper profits and this turns into a vicious circle of falling stocks prices.

If there is another trigger, apart from overvaluation, like a large flare up of the coronavirus the Nasdaq Composite and most technology stocks could fall even 50 % from their recent peaks.

I do not like Septembers. Septembers are bad for the stock market historically. Just remember Lehman Brothers and AIG in September in 2008. September is a precursor for the colder months of autumn and winter when there could be a second wave of the coronavirus.

So I think the Nasdaq Composite will fall 20% or more from its recent all time high. If there is another trigger it could lose even more in value. Otherwise, after the Nasdaq Composite falls 20% technology stocks could become undervalued again.

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