Hope so! IWM had a big rally in Dec/Jan, but then stuck in the mud for a while. Next week's CPI report will be critical.
OT: Stock and Investment Talk
- Thread starter RU-05
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Yikes; as far as the Schiller p/e, it’s at a level that has only been higher twice……2000-2001 and early 2022..
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Back in 2000, 17 of the top 20 Nasdaq stocks were unprofitable. Care to compare with today's top 20? Apples vs. oranges.
I heard.....stop adding to tech and buy value/small caps. I agree with this. Over the past 6 months, we have been adding to VIG, VTV, MGV, DODGX, VB, VBK, etc. I don't think I bought tech with any new money in quite a while. This is to keep our holdings in desired allocation ranges.
As for my personal/fun account, I have a good mix of holdings, plenty of HC/biotech and value like DIS.
You have to read between the lines.
Looks very much to me like the Russell 2K wants to break out. If mega and big caps want to sell off, it would make sense that at least some of that goes towards small cap.
Vangaurd small cap value etf the VBR has been building a base and banging it's head against the $180 level since early 2021. Currently at $177, like the Russell 2k, this very much looks like it wants to break out. Eventually it will.
Their small cap growth, the VBK is still down fairly significantly from 2021 levels, but those were bubble prices. Minus that bubble, the upward trend which dates back to 2004 says this too want to go higher. It is up 20% since Jan 1 2023.
While Value has outperformed since those 2021 levels, Growth has outperformed longer term.
correct; not claiming that it’s the same as 2000, but the ratio is historically high. Alternatively, I was pointing out that the ratio is higher than every other period (which includes periods of economic strength).
Can the market still run up? Absolutely….. it did for three years after Greenspan’s irrational exuberance comment in 1997.
Alternatively, the odds are getting higher of some sort of correction.
Why does tech/growth need to sell off? Why can't it consolidate and flatline for a while as the other parts of the market catch up?
I agree that small caps are a great play and value will catch-up, but let's be honest, there is a lot of junk in the value bucket (especially small cap value).
Definitely better to use a quality managed fund/etf than a small cap value index. AVUV is a great choice for this part of a portfolio.
That ratio itself is a joke, so it shouldn't be cited for anything. Using normal P/Es metrics, besides the Mag 7, the rest of the market isn't that historically expensive. Small and mid-caps are well below average and the S&P500 ex. Mag 7 is 16'ish. Not bad at all.
Regardless, after this wonderful run, a typical dip of 5-7% would be perfectly healthy and expected. And then onwards to 5500 by year end! :)
Of course, that's life in a nutshell! :)
FYI, Mark Newton alert....healthcare and financials helping breadth and looking technically strong. Was any of that FS Insights stuff helpful? I have been using it quite a bit with my personal account and it has been awesome. 50% of my account is their large-cap stock list.
This is the top-ranked Morningstar actively managed small cap growth ETF:
DWAS – Invesco Dorsey Wright SmallCap Momt ETF – ETF Stock Quote | Morningstar
DWAS – Invesco Dorsey Wright SmallCap Momt ETF – Check DWAS price, review total assets, see historical growth, and review the analyst rating from Morningstar.
It's done better than the VBK over the past 10-years, but not by a huge amount. Probably more choices on the mutual fund side. I normally use VB and/or VBK for small cap exposure (and of course, UWM for extra juice).
It's overwhelming at first, but the main stock list is the most important. Fidelity has that custom basket tool that is good for up to 50 stocks. It makes managing such a list really simple (and means I don't bother with "super" or "sleeper" picks). I just manage the entire 36-stock list as I see fit. Not sure if ETrade has something like that.
I also use the sector breakdown quite a bit.
As mentioned above:
Fidelity Basket Portfolios | Customized investing | Fidelity Investments
A faster, easier way to build and manage your portfolio with baskets of stocks and ETFs you want, trade with one click, and manage it as one investment.
www.fidelity.com
FS Insights stock list is only updated quarterly. So once it is up and running, the maintenance is modest.
This may be a dumb question but why do you need to pay Fidelity for the ability to create a custom basket when in reality isn’t your trading account as a whole essentially a custom basket?
The service is awesome and well worth the tiny $4.99 monthly charge. I managed 2 custom baskets in my personal account. The first is the 36 stock list I mentioned above. Via the Fidelity basket dashboard, I can add money and rebalance as I see fit all in one shot. Otherwise, I would need to place 36 separate buy orders every time I add in money. It tracks performance of the basket and provides focused articles and research on those stocks.
My second basket is my small cap biotechs. This is only 7 stocks, so this is less about logistics. I'm using the service to 1. keep the individual stocks out of my face (i.e., off my portfolio list). Biotechs go crazy and can be +/- 5-10% on a day for no reason. I don't need or want to see that. My portfolio view just shows the basket as one line item which I can click on for more details. And 2. I want to track performance of my 7 stocks versus the XBI, which is easy to do on the dashboard.
Besides these 2 baskets, my personal account has 7-8 other holdings.
Nice way to end the week!
www.cnbc.com
S&P 500 closes above 5,000 for first time ever, notches fifth straight winning week: Live updates
A solid earnings season, easing inflation data and a resilient economy have fueled the market rally into 2024, as the S&P 500 secured a fifth winning week.
Russell 2K finishes up 1.5% today. $2009.
The 5th time it has contended with a $2000 break out since the late 2021-2022 sell off.
The 5th time it has contended with a $2000 break out since the late 2021-2022 sell off.
April 19th $70 puts at $1.60. My time horizon is ARM goes meaningfully lower within the next 40 days. I will likely dump by March 19th since I don’t like holding options less than 30 days out due to decay (unless I am making an event driven play like earnings or macro data or something like that).
GOP primary over and then experts agree this weeks SCOTUS hearings highlighted that the insurrection case was just ill-advised lawfare and his dead. Market thinks DT is headed back.
thehill.com
Alas - still have kooks at the controls. AI push in DC now being recognized for what it is. AI not about curing cancer, doing weather etc
www.uncoverdc.com
Trump: Stock market thriving because ‘they think I’m going to be elected’
Former President Trump said the stock market is doing well because investors are confident he’ll be elected again in 2024. “So I mean, the Biden team can say, ‘Well, if things are…
thehill.com
Alas - still have kooks at the controls. AI push in DC now being recognized for what it is. AI not about curing cancer, doing weather etc
AI Will Censor Speech At Scale, Bias Included
NSF is funding non-profits and university think tanks to launder its censoring activities using AI and machines to censor at scale while also trying to hide its activities.
www.uncoverdc.com
Good luck. Unless you bought more than 100 calls, it won’t make much of an impact And risk/reward makes it not worth it.
All option plays are learning experiences for me. Still very new at this. Any thoughts on the expiration date or strike price? Looks like if ARM drop below $100 in the near term the play should 2x. I would be happy with that result (but obviously hoping for more).
I have done leap calls and very short-term event based calls (like the Grayscale court decision or earnings), but this is more intermediate, I guess.
And as per Tom Lee, once the Fed cuts come into focus, the R2K may head to $3000 pretty quickly. Place your bets! :)
But can it break out without those cuts?
if march cuts don’t happen is the russell back below $2k?
I don't think anyone is expecting a March rate cut any more. The important thing for March is for Powell/Fed to directly or indirectly suggest that May (or even June would be fine) is on the table for the first cut. Keep watching CPI and PCE. If inflation keeps heading in the right direction, we are in good shape.
I am really planning to load up on a big small-cap play for my personal account. Likely Jan 2025 IWM calls. I have been hoping for the IWM to dip below $190 one more time, but I may just need to give up on that (especially if CPI comes in light next week).
And the thing which could keep pushing off rate cuts is a continuing strong economy, which of course is a good thing.
Powell already said, we will cut FFR rates to maintain real rates, which are restrictive now. As inflation goes down, real rates increase. As Tom Lee says, all that matters is inflation. Sure, a strong economy may have the Fed cut slower or adjust the details of the cutting cycle, but inflation is the driver of what will happen.
Another positive dynamic.....is good news finally good news again? Stocks went up after that massive jobs report hit.
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