Stock markets are rising. We can’t say that the eternal pessimists don’t have enough to put 100 bullets in the fear machine now to sell the stock market and real estate crash.
132 billion Swiss francs
This is the loss that the Swiss National Bank will record for 2022. It is the worst loss in its history. This inevitably raises the issue of bankruptcy. Except it’s wrong.
The reason is simple. To support government debt, central banks have bought massive amounts of government bonds in recent years to keep interest rates low for debt financing.
Who says interest rates are low, bond prices are rising. Thus, in the transaction, central banks bought increasingly expensive government bonds that yielded less and less until they were yielding negative interest rates. economic deviation about to be corrected.
The bond bubble deflated in 2022.
With post-covid inflation, rising rates and central banks wanting to reduce their balance sheets. part of these bonds had to be sold. And obviously as rates have gone up, the price of these bonds has gone down. Thus, all central banks will face very serious losses this year. The Fed and ECB should announce the same soon.
But central banks cannot go bankrupt.
If there is a problem, we will restart the printing press, stop selling bonds at a loss, and as inflation falls, interest rates will fall, allowing bonds to rise again.
The problem lies in the states that receive the fruits of these profits every year as a budget. So the budgets will henceforth be balanced without this funding shortfall. Because we have to compare the loss this year with the significant gains of recent years with the bond bubble.
In short, we’re realizing very quickly that since the subprime crisis, central banks are running out of options and they can’t raise rates too quickly to fight inflation. eventually they will tell us that the inflation target of the central banks is no longer 2%, but 3 or even 4%. We will be told that we should embrace this inflation for the good of the economy and avoid a deep recession.
By the way, 3-4% annual inflation will help reduce the debt level for a few years without a lot of reforms and belt-tightening, which doesn’t go down very well politically.
Suddenly, the real balancing act in all of this is not the risk of an economic or financial crisis, but rather: whether it will hold up socially. In the end, inflation will also reduce the wealth gap by hitting the pensioner a little and increasing the income of the poor a little to narrow the gap a bit. But will this be enough?
Like I said, it’s all about confidence. when we face a real crisis, it will all be a matter of losing faith. Here we are in a crisis created by central banks and the market thinks they have everything under control at this stage.
Tesla Tesla died alive
At $100, the Tesla was overvalued. 200 more. In 400 this was a heresy. And now again, some of the 100 dollars went to 60-30 dollars, explaining the loss of people who want to believe that the trees went up to the sky.
The problem is how we value Tesla. The stock market is waiting. And so even though the title has never done so well today, it’s $300 down as we anticipate the future. Fears of impending competition and Tesla’s other problems were reasons to explain why it was overvalued in 2019. And yet… Tesla is still the market share pick.
Today we need to stop wanting to value tesla as a car manufacturer. the market has proven for 5 years that it values Tesla as a technology and software development company. Therefore, we should value it in the future as well.
And so its valuation beyond business results depends on rates. If inflation falls and rates stay the same, we’ll still be willing to pay 25-30 times earnings for tech stocks. Otherwise, it will pay 15 if we are in boxes that hold price power, treasury and margins. The question remains for Tesla over the next few years. But we are not there.
Twitter is back on the market
That’s the bet I’m taking. Musk will prove that tech stocks can lay off 20% of their workforce and still operate and grow and therefore maintain their margins. After doing so, he will of course decide to relist Twitter at a higher price than he bought it for. And the market will buy. Because the market will rank and focus on growth stocks that are capable of growth in the face of recession and continue to make margins with price strength. And twitter continues to have tremendous pricing power in my opinion.
The end of Google
With Chatgpt, we think google has not lost its competitive edge on the other hand. Of course, this won’t happen overnight, and even if Microsoft rushes to set up shop, Google has the ability to react or buy it back.
We know that artificial intelligence, digitization and robotics with cybercrime are the growth sectors of the next decade. More or less will depend on the degrees we value. But these are growth records. The wheel turns and even the colossi may be gone in ten years. As an investor, you should always keep in mind that even if it is too early to draw conclusions on Google. There have been Google killers in history… But as investors, we must always check that our competitive advantage is not erased from our “good papers”.
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CAC 40 analysis
RAs on CAC 40, above 6840, we continue to remain bullish to get 6950, we are almost there. After that, we will attack CPi Us tomorrow and the results of the top banks expected in the queue. 6840 in short circuit.
Graphseo Stock Wallet
RAS I continue to surf the wave there too. Well, my quilt is costing me money and it wasn’t my best idea, but it also allowed me to stay aggressive elsewhere and I made a new battery/relief for sophie that worked well. Tonight in the US I will reduce the wings so we don’t take any risk on cpi and if we sell it will keep the cartridges.
Note: All trades are discussed, announced and shared in real time on L’Académie des Graphs.
The wallet on the public site here is updated once a day at noon. The portfolio represents my combined personal beliefs (my various brokers) and is not an invitation to buy or sell.
Performance 2022: +46%; 2021: +122%; 2020: +121%; 2019: +79%; 2018: +21%; 2017: +24%; 2016: +12%; 2015: +45%; 2014: +30%; 2013: +72%…
With capital growth, I take less risk today and aim for +20% per year depending on market conditions. What matters to me is the value gain represented by this +20%, not just the interest gain. You don’t manage a 6-figure portfolio like you manage a 7-figure portfolio…
My capital and investment horizon for each security is certainly not the same as yours. The portfolio is there to share my beliefs with you on a daily basis in full transparency, but it is not meant to be followed. My goal is to teach you how to catch your own fish, not to give it to you. This represents my opinion/opinion only and is not a recommendation.
Fees are 0.10% per order or 0.2% round trip (TTF if applicable) which are deducted at position closing so you have a total performance for each position. Total performance fees are excluded. Any withdrawal is declared especially when it comes time to pay income tax. The vast majority of profits have been reinvested since 2008. One-time cash transfers have been announced. The performance is therefore pure.