
Hot stocks cooling down….?

There’s a lot more green on the year to date asset class performance charts now, even after a very wobbly end to February, still mainly in risk assets. In fact it still seems the greater the risk, the greater the reward, although it’s worth noting that any attempt to justify this more broadly has suffered serious setbacks this year – of the so called FAANG stocks, Facebook, Apple, Amazon & Netflix are showing year to date losses, averaging almost -5%, whereas meme stocks such as MicroStrategy and GameStop are still ahead year to date to crazy extents (93% and 440% respectively).
Large cap meme stock Tesla, however, is also over 4% down YTD and around 25% off its 2021 and all time high
As we stated last month “Our concern started with the FANG bubble and moved to Tesla, before we saw unjustifiable moves in so-called cryptocurrencies (any move that isn’t a reversion to zero isn’t justifiable in Paul’s opinion). This same fervour then spread to GameStop and other stocks with questionable fundamentals.” We don’t recommend an entry point into FAANG stocks or Tesla even after the sell-off.
What we do like:
In place of tech, we have been advocating S&P500 High Dividend Low Volatility ETF (UCITS version) up YTD, as well as managed funds focused on S&P 500 bottom-up stock picking (funds that also contain a short-sell component and better still, also with an Asian component). We see less volatile S&P 500 sector large-cap stocks as offering alternative risk-adjusted potential at this moment than mid-term US government debt, but still see treasuries and particularly longer dated treasuries at this time, as being the best form of portfolio insurance in a portfolio.
The Big Inflation ‘to be or not to be’ Question – We aren’t believers in chronic or a cyclical rise in inflation but we do see some volatile inflation numbers in the months ahead due to supply chain disruptions and higher fuel costs.
Long-duration US Treasuries
Long-term US treasury bond strips which have been subject to a sell-off, continue, in our opinion, to provide upside considering all of the risks that continue to underpin the risks inherent in many of the world’s major economies. For further information on our fee-based, highly personalized, unbiased research please contact us at info@mbmg-investment.com.

What’s happened to GameStop and Friends?
Meme madness (taken from our March 2021 Outlook)
One of the many great turns of phrase used by Steve Clapham in the recent webinar mentioned earlier was “We’ve seen this movie before”. The combination of frothy asset bubbles against an unclear financial and economic backdrop is something that we’ve definitely all seen before. We’re even seeing the same cast of players, that either starred or had supporting roles in the dot.com bubble from Softbank’s Masayoshi Son to MicroStrategy’s Michael Saylor.
For our highly informative, 17 page March 2021 Outlook which discusses not only Meme stocks, FAANG’s but also Saylor’s Microstrategy Inc and its recent purchase of Bitcoin (BTC) please send an email to info@mbmg-investment.com
MBMG Investment Advisory is licensed by the Securities and Exchange Commission of Thailand as an Investment Advisor under licence number Dor 06-0055-21.
For more information and to speak with our advisor, please contact us at info@mbmg-investment.com or call on +66 2 665 2534.
About the Author:
Paul Gambles is licensed by the SEC as both a Securities Fundamental Investment Analyst and an Investment Planner.
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