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Personally, I think Michael Burry was right to say sell.
The Federal Reserve just started again creating monetary reserves in the past two weeks.
Such a move in the current situation of bubbles almost everywhere still, especially in technology stocks, will not solve the problem.
Sooner or later, the market must and will be allowed to clear, as far as I am concerned.
Strangely enough, Apple, Microsoft, Alphabet, Amazon, Meta are not too overvalued anymore, I think.
Yes.
I think Europe will continue to be an investment banking stronghold.
Despite the issues with Credit Suisse.
In the last years Deutsche Bank had problems, also
Even if the old world order disappears, from the ashes others will come.
And there are even now large number of small and midsized investment banks, both in Europe and in the United States.
What investment banks essentially provide is risk distribution.
Founded on good analysis, that is many people in investment banks think. And thinking is indispensable.
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GitLab Inc., the a bit under the radar open-core, open-source Infrastructure as a Service code writing collaboration, IaaS software depository is undervalued by circa 57 %.
According to Wolfteam Ltd. www.wolfteamedge.com, where I am the sole proprietor, GitLab's intrinsic worth is 12 billion USD in the next 5-7 years, compared to the current circa 5 billion USD GitLab's market capitalization. In more than 12 years from now, Wolfteam Ltd.'s view is that GitLab Inc., if managed properly and with above average speed of execution, could be worth between 20 billion USD to 37 billion USD.
GitLab and GitHub which was acquired for 7.5 billion USD by Microsoft are the by far the largest firms, according to market share, in the Infrastructure as a Service market, which is by far the largest part of the cloud computing market. Cloud computing as a market, according to various estimates could report revenue of 700 billion USD in the next 5-7 years.
However, as with most young technology firms, as GitLab's revenue grows quickly, GitLab will most probably start getting closer to and eventually break even and start making profit.
So the current valuation of the cloud firm GitLab of Wolfteam Ltd. is based mostly on assumed, probabilistic net profit cash flows, which are going to possibly occur in the future. That said, Wolfteam Ltd. stands by its analysis, given the current both industry and macroeconomic circumstances.
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Bank of America is valued at circa 229 billion USD currently on public stock markets.
In my personal opinion, Bank of America's intrinsic worth is 300 billion USD, which is a long-term estimate
Main positive factors coming into my Bank of America valuation are a low Price/Earnings Ratio of 9, a low Price/Sales ratio, high net profit margin and moat, durable competitive advantage in banking for corporate, financial and retail customers.
A risk before my forecast is the fact that Bank of America's bond portfolio is of comparatively long duration, according to various sources, which could spark an asset/liability mismatch.
However, I trust Bank of America's risk professional should be able to weather such a crisis, if it occurs.
Bank of America has proved a stable franchise, up till now.
In my personal opinion, Bitcoin and cryptocurrencies in general are undervalued.
Crypto is the future, no matter there are efforts by regulators to bring it under control.
Dictatorship, be it official or unofficial by bribing politicians, media and regulators is a thing of the past.
Both in the East and the West.
And it will be seen.
Distribution of power and distributed decision making systems, entities are what is required.
Distributed, independent, mobile, fast decision making, incisive, agile, adaptable.
Everything that is now #Bitcoin, #BTC and #crypto
In my view, technology stocks, US especially are overvalued.
The technology sector must be supported sooner or later by the government, Ministry of Finance, Central Bank, as almost all other industries need very rarely temporary liquidity support -> banks, insurance, automotive companies in the US and Germany during the 2008-2009 Great Recession.
The stock market must be allowed to clear.
Otherwise, we will have no markets and we will have communism.
In communism, people waited for a car more than a year.
Not that in capitalism now, this strange phenomenon does not occur, which is hugely surprising.
Basically, almost all social systems like banks, medical care, police, the army etc. are fractional reserve systems, which means that analysis, planning is key. Good planning, however!
As 7 years plus as a risk manager, I can say everyone is a risk manager, everyone is playing the odds.
There is usually no right answer in complicated dynamic systems.
Apple investors are clearly underestimating a China Taiwan conflict.
70 % of the computer chips in Apple Macintosh computers and large percentage of the chips used in iPhones and iPads are manufactured in Taiwan.
Apple's market capitalization stands at 2.50 trillion USD currently.
If a China Taiwan conflict erupts, I predict and am of the opinion that Apple's market capitalization could go below 1 trillion USD.
Morgan Stanley is valued at 141.2 billion USD on capital markets currently.
According to my humble view and estimates, Morgan Stanley's intrinsic worth is 89 billion USD.
Since Morgan Stanley has staked its future on more than 50 % on wealth management, private banking in a sense, Morgan Stanley's franchise is heavily dependent on US and global stock markets.
Simply because wealthy individuals prefer to invest in publicly listed stocks, because they have more financial acumen and stocks can bring you 8 % - 11 % a year, measured by the leading US stock market indices on a historical basis for various historic periods.
In addition to that, Morgan Stanley receives much higher percentage of fee revenues as a percentage from its clients investing in equities, than its clients investing in bonds.
I personally believe the Standard and Poor's 500 Index can fall more than 30 % from its current level, while the Nasdaq Composite can fall 40 % from here. I have expressed this view numerous times on its blog.
That is why, I think Morgan Stanley's intrinsic worth is 89 billion USD, roughly 40 % less than its current market capitalisation.
No.
As far as I am concerned, Bitcoin cannot replace gold as an investment alternative.
Bitcoin and gold should be able to coexist as investment opportunities.
Gold has thousands of years of history on its side. Bitcoin is the current future of finance, fintech especially.
That said, people still enjoy holding and wearing gold. Gold, as a metal also, is very durable.
Intuitive Machines Inc. , the space exploration company based in Houston, Texas is valued at circa 148 mln. USD on the Nasdaq bourse.
As Intuitive Machines informs on its website Intuitive Machines is the most NASA-awarded commercial lunar program. The company has three missions that will deliver NASA and commercial payloads into orbit.
Valuing a space exploration company is a hugely difficult task.
In my personal view and back of the napkin estimates, I think Intuitive Machines Inc. is worth 4 billion USD in the short-term.
Path dependent on the future appetite of humanity or NASA for Moon, space exploration, Intuitive Machines can become a mega capitalisation company with market capitalisation of 20 billion USD or more.
Provided that Intuitive Machines Inc. keeps its experienced, capable management, stores and develops its current extremely advanced and valuable technological know-how, which gives it a 'cutting' edge, not only in space exploration technology, but for humanity's future, as well.
Netflix's stock price is up by circa 10 % in the last 3 trading days.
Ever since there is serious talk that the USA can ban TikTok in America there are expectations that Netflix, the video streaming platform's value can go up. TikTok's CEO was grilled on Thursday in the US senate, out of government security concerns
In addition, the European Commission, EC has in the past few days prohibited its employees to install TikTok on their work EC mobiles.
Netflix seems to be a natural contender to take TikTok's place both in terms of revenue, time spent by people on their Netflix's app and the information gathered, of course.
Netflix's current market capitalisation is 146.28 billion USD at a Price/Earnings ratio of 32.99.
I estimate Netflix's intrinsic value is around 250 billion USD, because videos are the future.
I think Bitcoin's price will fall in the short-term, together with other financial stocks, due to the current turmoil we are experiencing.
Banks are finance companies. Financial technology, also.
Bitcoin epitomizes financial technology or fintech, for short.
Bitcoin will reemerge stronger, after he the current fallout.
Bitcoin is the future, as far as I am concerned, since Bitcoin saves time, money, and effort.
Bitcoin's production or mining is energy intensive, but that is a soluble problem. Bitcoin's mining energy intensity is the main reason while SEC has voiced opinion that Bitcoin is a commodity, energy commodity, that is.
All in all, Bitcoin and blockchain's efficiency will prevail in the long-run, I think.
NVIDIA is grossly overvalued, according to my personal opinion and estimates.
NVIDIA's current market capitalization stands at 647 billion USD.
That equates to around 23 times NVIDIA's 2023 revenue and 151 Price/Earnings ratio.
Artificial intelligence or AI and cloud computing is the current mega trend, but such valuation metrics for NVIDIA are simply unreasonable, I think, especially now that NVIDIA's 2023 full year revenue is basically flat compared to 2022.
According to my humble opinion, NVIDIA's intrinsic worth is 330 billion USD.
Meta Inc, formerly Facebook Inc's revenue, for example has much larger, 4 times larger to be exact and Meta's net profit margin is also high.
Apple Inc, the iPhone producer is valued at 2.52 trillion USD on the Nasdaq bourse currently.
I personally think, Apple's intrinsic value is 1.52 trillion USD, which is an increase from my previous estimates of 1.1 trillion USD for Apple's value, due to my revised forecasts of Apple's durable competitive advantage.
There are several risks that undermine Apple's future value - Taiwan, 35 % probability, recession, 62 % probability, which decreases luxury goods consumption and less revenue from App Store than Apple currently forecasts, 71 % probability.
Even at 1.52 trillion USD, Apple Inc will be worth a staggering amount of money.
Warren Buffett controlled Berkshire Hathaway has wisely invested more than 100 billion USD in Apple's stock, is my humble opinion.
Apple covers all of the Oracle of Omaha's criteria - durable competitive advantage due to Apple's design know-how, large, complex production chain and consumer attachment, moat driven by the perception of success associated with owning Apple's products, consistent and high margin profitability.
Apple even distributes dividends.
All in all, Apple is a huge success story for corporate America and even only driven by momentum, Apple Inc's successful run will continue, I think.
Taking investing decisions these days is not easy.
Especially when one simply does not know or cannot reliably with 80 % certainty forecast what the Federal Reserve, the central bank of the United States and to a large extent of the planet's next move will be.
One past candidate for the Board of Governors of The Federal Reserve said something like 'The Federal Reserve has Soviet type of power'.
Federal Reserve's power is of 100 % Soviet type not, I think, since free markets simply did not exist in the Soviet Union.
Free marketeers, economic classicists like me, however, might say that with all the 'obstructions' nowadays, it is also difficult to speak of entirely free markets. But 70 % to 89 % the global market for capital, labor and services is free, I would opine.
Personally, I still trust the fundamentals. If one company has good management and a stable, sound business, based on a competitive advantage it should be viewed as a stable candidate for investing, in my opinion.
Barring a Black Swan event.
The market should be left to, at least to 70 % - 80 %, clear.
Otherwise, the constant money printing, money creation mess will get humanity into trouble, I think.
A good judgement is critical these days, in my humble opinion.
If one observes the last trading days, it does seem that Bitcoin and cryptocurrencies thrive in uncertainty or financial crisis, which we have at the moment.
Bitcoin seems to function as a safe haven at the moment, which is remarkable since Bitcoin and cryptocurrencies are unregulated and crypto is considered extremely high risk.
It would be interesting to observe how quickly and how successfully Bitcoin can fulfill its unofficially declared, in my view mission to become USD 2.0 or a global reserve currency in electronic form.
So far, the first strides seem promising.
Inflation, since the Russian Ukraine conflict began has gone up substantially.
One can safely talk about galloping inflation all over the world or inflation close to 15 % - 20 % annual rate of price increases.
Gold's price, remarkably has not risen a lot during the last 2 years.
One explanation is the Federal Reserve raising the Federal Funds Rate and thus implicitly interest rates all over the world, which suppresses the price of gold, as the yellow precious metal is not an interest bearing asset.
However, in my humble opinion, in the space of the next 2-3 years the undervaluation of gold will crystallise with gold's rise price rising.
Silver's price, on the other hand could take 3-5 years to rise a lot. Simply because the price or value of silver contains a large industrial production component.
Silver is extensively used in the production of batteries for electric vehicles and solar panels manufacturing due to its electrolytic qualities.
All in all, precious metals, and the publicly listed stocks of precious metals by extension, seem strangely underpriced, undervalued, in my view.
On this blog, I forecasted numerous times that like dot-com boom and bust in 1996-2001 followed by 2003-2008 emerging markets, commodities super cycle after the 2013-2022 smartphone, AI technology boom, soon the global capital flows will again be directed towards commodities and emerging markets.
And since most emerging markets are the main producers of commodities like oil, gold, silver, base metals, grains, softs etc. the money creating the new commodities super cycle will go obviously toward emerging markets.
I expect the stock markets of Brazil, South Africa, Russia, Argentina, Chile, Ukraine, Uzbekistan, Kazakhstan, Australia, Azerbaijan, Saudi Arabia, United Arab Emirates etc. to benefit from the aforementioned trend towards commodities investing I forecast.
For now Bitcoin, cryptocurrencies or crypto for short is emerging as a winner in the current crisis.
Bitcoin's price rose for the last 5 trading days.
This is remarkable, really since both the now practically defunct, government controlled Silicon Valley Bank, which started the crisis and Signature bank, also in trouble, were had large crypto business.
It remains to be seen, whether Bitcoin, cryptocurrencies, crypto's disruption capabilities will prove resilient, agile, adaptive, strong, robust, lean enough to survive and prosper.
Here, on this blog, as evidenced in numerous blog posts, I have expressed the opinion/forecast/opined that is only a matter of time, before the close to one correlation between Bitcoin, cryptocurrencies' prices and stocks breaks down.
Bitcoin and cryptocurrencies' prices rise, while stocks' prices fall, I meant and posted here.
This is exactly what happened in the last trading week after the fallout, de facto insolvency and later forced government administration of Silicon Valley Bank, later Signature Bank and most recently First Republic Bank.
The stocks prices of both Wall Street Banks and regional banks fell, while Bitcoin and cryptocurrencies' prices fell.
In my view, this could prove a pivotal, breakthrough moment in crypto, which is modern day fintech and Bitcoin's slow progress to become a global electronic reserve currency.
No.
Technology stocks' performance measured by the Nasdaq Composite have around 40 % to fall from current levels to around 8 400 points, in my personal opinion.
The technology sector is still overvalued by most valuations metrics.
Many listed, small capitalization, mid capitalization and even large capitalization are loss making or barely profitable.
The interesting thing is that stock market investors seem not to promote the profitable technology stocks, by assigning to them lower Price/Earnings, Price/Sales, Price/Book valuation multiples.
Very interesting, indeed.
The stock market seems to go on and reward growth. Not only that, but stock market participants also seem to reward forecasted growth in the future.
I personally invest in technology stocks, and I understand the reason for the conundrum above.
When a hot technology stock's price goes up, 3 times for example, it does not matter a lot if it falls by 30 %, 40 % or even 50 %. But that is only true, if one has invested in the aforementioned technology stock at or near the bottom of the stocks' price and this is not very easy, to say the least.
A notoriously difficult thing about technology stocks is investing when the stock bottoms out. Yes, if the investor is successful, he or she can make multiples of his or her initial investment. A case in point is Snap Inc, Snapchat application's owner, when its stock price went from 4.99 USD to 83 USD in the space of 3 years. Before that Snap's stock price fell from 27 USD to 4.99 USD.
So, in short, technology stocks' volatility or risk makes it difficult for long-term investing. Timing is here more important.
And if interest rates levels are going up as they have done in the last year or so, technology companies which are mostly making losses and burning cash find it difficult to raise money.
And I forecast the Federal Reserve and the European Central Bank will go on raising their leading rates.
