It’s such a big day today. First, we have one of the highest profile IPOs of all-time coming out today on the NASDAQ in Coinbase, the cryptocurrency supermarket. All I hear are people just gushing about the company and saying that no one should worry about its Dotcom’esque valuation. One analyst is calling for $600 while a pundit was in the four figures. Good thing we don’t have epic greed and euphoria!
Q1 earnings season also kicks off today with the big banks starting to report. JP Morgan, Wells and Goldman all gave glowing reports that blew out expectations. While that’s all nice and dandy, what’s more important is how stocks react to the news. The actual news is not as important. My concern coming into earnings season was which sector reports would be viewed as selling opportunities rather than buying. Our sector positions continue to reflect what I wrote about in my 2021 Fearless Forecast, energy, banks, materials and industrials with very small exposure to technology. That could change if good news became a selling event.
I continue to find it challenging to buy new things without a pullback. Momentum is as strong as I have seen it in my 32 years in the business, but at some point, there will be a short and sharp pullback where the last one in will look laughingly foolish. While I have high conviction on the things we own, I also love to feed the ducks into spikes higher. That leaves the burning question of where to redeploy the proceeds. Interesting times, but epically more enjoyable and easier than 13 months ago…
