Daily Market News - 10th November 2022

Pick Your Market Poison

Midterms, CPI, Crypto Carnage, Job cuts, Jim Cramer… pick your poisonous mainstream news narrative.

As most of you know, I do my level best to discard the mainstream media because I’ve found in the past they have a tendency to influence my views, and I realised a while ago “thoughts and feelings” don’t help anyone. Least of all me.

The market (The Dow in particular) has continued to move higher over the last 7 days with a gain of +2.5% and we’re seeing the continuing strength and rotation into value while the over valued growth tech names continue on the their daily day trips to the local butchers.

That’s not thoughts and feelings, that’s just the overwhelming information price is communicating.

The relationship continues to widen, and has further expanded over the last 7 days.

If you’ve followed my work over the last month, you’ll know I've been banging the drum on value - and I laid out a bunch of names last week - LAST WEEKS LETTER HERE

My stock selection criteria this year has been pretty simple

• Low P/E Ratios

• Positive 12 Month Earnings Growth

• Not Growth Tech

• Value Stock

• Positive Technical Chart

That’s really it.

The Data is very clear.

Value has been out performing growth this year in % terms, which is why my work for the bulk of the year has been away from Tech and all the “growthy” names everyone seems to think is the stock market.

Charts like this remove all the “thoughts and feelings” from the equation.

If you’re not looking at Value, it might be an idea to start looking under the surface a little bit. Because we’re seeing some insane moves to the upside.

Exxon Mobil is a great example of what I’m looking for and was 1 of our October high conviction ideas.

We’ve been bullish energy a while (various stocks have been put to our clients over the last 6 months) but charts like XOM are a dream for analysts like me.

Easy to define and manage risk

I’m also looking at stocks like UnitedHealth Group (UNH).

I put this to our clients and members last week and if we get a break out to new ATH’s, I think it also looks interesting.

In Conclusion

CPI data announced later today could crush the market, I think we all see that possibility.

My emails / Twitter messages are inundated on a daily basis from social media followers asking me my thoughts on stocks like Twilio (TWLO), Trade Desk (TTD) or ROKU and all the growth tech names that have done well in the past. (FYI - those examples have been great shorts for our clients over the last couple of months).

For me, growth tech is dead. Price will tell me when they become interesting again, and I’ll be on top of it when it happens.

Until then. Value is the new growth, and when we come out of this bear market, we’ll likely see new leadership.

That’s just what happens.