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A Tale Of Two Stocks 📊
Did you know that contrarian investors often outperform the market by going against the grain?
Equity Eats
March 28, 2024
Did you know that contrarian investors often outperform the market by going against the grain?
This approach has historically led to significant gains, proving that insight and patience can outmatch the frenzy of trends.
In this edition, we’ll deal with the following:
Biden Proved He Can Still Shout: First, we’ll take a look at President Biden's State of the Union address and its reception 🗣️
Tesla And Boeing Are The Worst Stocks In The S&P 500 This Year: Next, we’ll examine why Tesla and Boeing are trailing in the S&P 500 💥
Bitcoin Drops Nearly 10%, Where Does It Go From Here: Finally, we’ll give an analysis of Bitcoin's 10% drop 🤔
We aim to provide concise, impactful insights to refine your investment strategy in a rapidly changing market.
Biden Proved He Can Still Shout 🗣️
Biden delivered a 67-minute State of the Union address a few weeks back.
He did it with what the press called “high energy,” a synonym for lots of shouting 📢
His address was punctuated by Democrats chanting “Four more years, four more years!”
Biden did what he had to do.
He exceeded the low expectations many Americans had for his performance.
He calmed—for the moment—Democratic bed-wetters concerned about his stamina, energy and ability to deliver a message.
Still, it is far from clear he changed voters’ fundamental concerns ❌
He is too old.
He has memory problems.
He does lack stamina.
And shouting or no, Americans know it.
Polls in the coming weeks are likely to show little or no positive impact of Biden’s State of the Union performance on his standing on the issues or with voters 👎
Tesla And Boeing Are The Worst Stocks In The S&P 500 This Year 💥
While that may feel random, it actually tells a story about investing, strategy, and psychology.
Tesla stock is down about 31% this year, while Boeing shares are lower by about 30%, making the pair the worst performers in the entire S&P 500 this year 📉
The S&P is up by about 7% this year.
Earnings drive stock prices and earnings estimates are up by about 7% since late December.
Those higher earnings estimates resulted in higher equity values and the change in the index closely mirrored the change in estimates 📊
In contrast, earnings estimates for Boeing and Tesla aren’t going up.
For Tesla, analysts have cut their 2024 and 2025 earnings estimates by 21% and 25%, respectively.
Boeing’s 2024 earnings estimates are down about 26% since late December.
The 2025 hit hasn’t been as severe though, falling about 9%.
Both companies need to address mistakes of the past and then wait for those decisions to bear fruit 📈
A cheaper Tesla is due in 2025.
Boeing still hasn’t decided to develop a new jet.
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Bitcoin Drops Nearly 10%, Where Does It Go From Here? 🤔
Bitcoin and other cryptocurrencies fell a few weeks back by 10% in what looked like a short-term correction after a red-hot rally in digital assets.
Prices could fall further even as traders continue to be bullish on the outlook for cryptos in the months ahead 📉
For now, it seems like a short-term correction from record levels.
The surge in demand for Bitcoin as a result of these newly launched ETFs is profound, as evidenced by the huge amount of capital flowing into them on a daily basis.
Traders have overwhelmingly piled into bullish leveraged bets on Bitcoin futures made with borrowed money 💰
New historical highs tend to be a trigger for selling.
Some players are taking profits, which raises the question of whether there will be enough hot buyers at current levels or whether the majority will prefer to wait for a deeper correction.
In a corrective scenario, the $65,000 to $65,500 and $60,000 to $60,500 areas are of particular interest, as they contain important round levels significant for retail investors 👀
