"I'm being modest when I say I'm the world's greatest day trader. My unlimited money has upgraded to infinity money. There's nobody who can argue that Warren Buffett is better at the stock market than I am right now. I'm better than he is. That's a fact." David “Davey Day Trader” Portnoy, one of the most charismatic, if not modest, personalities who came to fame during The Insanity Bubble.
TGIF, EVA readers!
Well, it’s been another interesting week in the stock market. It’s not often a mega-cap tech stock like Facebook (I’m not a fan of that “Meta” name), crashes 25% in a single day, as it did yesterday. That wiped a cool $225 billion off its market value (not so cool, however, if FB is one of your largest holdings). It’s now down 37% from its September peak for a loss of roughly $450 billion. The good news is based on its present $660 valuation, versus $1.1 trillion at its high point, it’s not likely to fall another $450 billion!
The bloodbath, particularly in tech, has reached far beyond Facebook which wasn’t all that pricey even before yesterday’s smackdown. Consequently, the evidence is mounting on nearly a daily basis as to how vulnerable the U.S. stock market had become late last year, especially among the multitude of ridiculously overvalued issues. What I’ve called The Insanity Bubble, the subject of this week’s, series continues to be in serious deflation mode.
For those EVA readers who missed it, we launched Bubble 3.0 via last Friday’s edition. You can access it here. As we noted then, we are accelerating the publication of some of our chapters based on what’s happening in the markets. It’s for the reasons mentioned, along with the bombardment being inflicted upon much more aggressive names than Facebook, that we wanted to run Chapter 10, The Insanity Bubble, this week. If you missed the mini-chapters we published on Monday and Wednesday, please click here. It continues to be my belief that the level of speculation seen in late 2020 and through most of 2021 was of truly historic dimensions. We may never see anything like it again… at least, I certainly hope not.
Many of you have been kind enough to recommend this series to your family and friends. If you have not done that yet, I would be extremely grateful if you would do so now. Please let them know to click on the invitation-to-subscribe button on our Substack page. This will give them on-going (and free!) access to the continuation of the book. There are some important chapters coming up, particularly on wealth preservation strategies during an era of utterly reckless central bank money creation. On that note, the U.S. money supply has increased by 40% in just the last two year. In my view, that certainly qualifies as reckless — and senseless.
Anyone to whom you are relaying an EVA link, such as this page, should also indicate that they would like to subscribe in order to receive the rest of Bubble 3.0. Hopefully, that’s a very easy way for you to share this project with “your people”.
Thank you again!
DISCLOSURE: This material has been distributed solely for informational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. Any opinions, recommendations, and assumptions included in this presentation are based upon current market conditions, are subject to change, and reflect the personal opinions of David Hay (an employee of Evergreen Gavekal) as of the date of this publication. This publication does not necessarily reflect the views of Evergreen’s Investment Committee as a whole. All investment decisions for Evergreen clients are made by the Evergreen Investment Committee. All material presented is compiled from sources believed to be reliable, but accuracy cannot be guaranteed, and Evergreen makes no representation as to its accuracy or completeness. Securities highlighted or discussed in this letter have been selected to illustrate the author’s investment approach and/or market outlook and are not intended to represent Evergreen’s performance or be an indicator for how Evergreen or its clients have performed or may perform in the future. Each security discussed in this letter has been selected solely for this purpose and has not been selected on the basis of performance or any performance-related criteria. The securities discussed herein do not represent an entire portfolio and, in the aggregate, may only represent a small percentage of a Evergreen’s client holdings. Evergreen actively manages client portfolios and securities discussed in this communication may or may not be held in such portfolios at any given time. Before making an investment decision, the reader should do their own research and/or consult with their financial advisor. Past performance is no guarantee of future results. All investments involve risk, including the loss of principal.