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Banks, Inflation, and One More Low
The bear market is not over. This has been our probable thesis since the start of 2023. With the 10-year rates breaking out to new highs, and on-going inflation reports showing a re-acceleration under the headline numbers, it was apparent that the FOMC would need to raise the terminal rate to further fight stubborn inflationary pressures. This realization marked the February top, which has since been intensified by the unforeseen collapse of two large regional banks.
The Importance of Verified Returns and Risk Management for Retail Investors
Last year, the I/O Fund encouraged our readers to let go of the idea that picking good stocks could save a portfolio in the tech industry and to instead fully embrace risk management tools. We pivoted to playing defense rather than offense. Those who watch team sports will understand this transition well, as the strategy changes from attempting to make money (or make a goal) to a strategy that prevents losses (or prevents a goal).
The Best of I/O Fund’s Newsletter in 2022
For an investor, the antidote to noise is quality stock analysis. Due diligence requires dozens of hours per equity, and it takes hundreds of hours every year to produce a free newsletter with quality analysis. I/O Fund strives to offer some of the team’s best analysis for free, and we believe the consistency and depth of what we provide for free is hard to replicate.
Google Stock: Search Is On The Precipice Of Multi-Decade Disruption
Earlier this month, Google’s stock (Alphabet) tumbled 7% when chatbot Bard was unable to complete a search with 100% accuracy. During a demonstration, Bard returned incorrect information about which telescope was the first to take pictures of a planet outside the Earth’s solar system. This was a minor mistake given how far large language models and generative AI has come, rather it was the timing that was a bit flawed as OpenAI’s ChatGPT, the chatbot powering competitor Microsoft Bing, had been dominating headlines since its November 30th launch.
Nvidia Throwback: An Example of Why Conviction Matters for Stocks
Last August, Nvidia had a $2.5 billion revenue miss due to gaming and crypto mining related weakness. This caused the stock to selloff (8%) in one day. Many pundits were questioning if Nvidia could overcome the gaming segment weakness given Ethereum’s Merge to Proof of Stake would permanently reduce demand for gaming GPUs.
Timeout for Tesla Stock: Where We Plan to Buy
The stakes are high for Tesla's stock because if the margins remain healthy, the stock will do quite well. However, if the margins contract, then the bears will be in control. This is a big moment for Tesla, as high average sales price has been a contentious issue for meeting its addressable market. Wall Street will want to see it's possible to do both --- serve a wider total addressable market (TAM) with more affordable prices while maintaining a healthy bottom line.
Bitcoin is up 40% in 2023, Here’s Where it Goes Next
We update the new developments in Bitcoin’s price patterns as well as the on-chain metrics that we tend to see around historic lows. We will also take a look at the fundamental thesis surrounding Bitcoin’s utility, and why a globally indebted economy coupled with structural inflation will only benefit from Bitcoin.
Ad Budgets Set To Slow Even More In 2023
Ad-tech stocks across the board had a tough year last year. Investors are hoping that 2023 will be a better year, yet according to the projected ad spend for 2023, this may not be the case.
