Victor Pedersen
Edited
(Part 1/2) Hello copiers, The stock market got ugly for growth stocks. Bigger selloffs, more red numbers despite earning beats, more panic selling. The small cap index in particular is extremely oversold. Remember March 2020 when the pandemic struck when there was blind panic everywhere? People didn’t look for winners, they were just looking for safety and that’s the current sentiment. Selloffs can feel scary when you are caught in the middle of it but if you look back, it is usually an opportunity. Everyone thinks their risk appetite is high until they see deep red. As long-term investors, this shouldn't scare us at all. Let’s get the Fed statements out of the way first: Federal Reserve Chairman Jerome Powell repeated that the central bank will discuss speeding up the tapering of its asset-purchase plan. Powell acknowledged that the risk of inflation has increased in recent months, leading him to disavow his previous position that rising prices weren't "particularly large or persistent." Still, the Fed chief stressed that the current high rates of price increases weren't likely to lead to "a persistent long-run string of high inflation behind it." Powell said he underestimated the impact of supply chain disruptions on inflation, one of the key factors "that are causing higher inflation to be more persistent.” He added that the central bank will continue to update its view as economic circumstances evolve. Powell first indicated that he's ready to consider an earlier end to the central bank's asset-buying program. Specifically, he stated that it's "appropriate to consider" tapering the purchases sooner than previously expected. The Federal Reserve is scheduled to start its next policy meeting on Dec. 14. My Portfolio: $CRSR (Corsair Gaming Inc) Corsair lowered the 2021 revenue guidance due to global logistics and supply chain issues. The stock market has been trying to price this in for quite a while now and I believe the company is already far below fair value. These logistics issues and chips shortages won’t last forever. I listened to Corsair’s earning call and was positively surprised to hear that they had actually grabbed market share from competitors. So you have a business that, in spite of all the macroeconomic setbacks, continues to expand their product lineup and continues to grab market share away from its competitors. I can appreciate this level of execution from a company hit by the perfect storm. The current problems will ease in the coming quarters. Pent-up demand, attractive valuations, stronger financials, and secular gaming trends will benefit Corsair in the long run. The current stock sentiment is abysmal. Corsair is only for patient investors who believe in the business, brand, and its growth opportunity. Count me as one of them. $TWTR (Twitter) and $SQ (Block Inc.) $35B market cap. I did not expect to see such a low number for Twitter at this stage of the process. I’d even consider a poorly monetized Twitter to be worth more than that. A properly monetized Twitter is worth twice or even triple that market cap. And that’s why it’s one of my top picks. Twitter has been on a rampage this year when it comes to pushing out new features on a weekly basis and experimenting new ways to finally monetize the platform, which has been long overdue. Its CEO Jack has stepped down. SQ now has the attention of a full-time CEO and as a result, I have actually become more bullish on SQ. Square is changing its corporate name to Block as the company continues to focus on developing blockchain tech solutions. Twitter on the other hand could also benefit from a full-time CEO, albeit one I’m not too familiar with yet. Agrawal, the new CEO who’s served as CTO since 2017, has been with Twitter for more than a decade. He had been in charge of strategy involving artificial intelligence and machine learning and he led projects to make tweets in users’ timelines more relevant to them. Appointing Agrawal is a clear indication that focus needs to stay on products and technology. The move makes perfect sense to me, but it’s a still a ‘wait and see’ in terms of his capability as a CEO. Either way, Twitter is in a good position moving forward with the launch of subscription services such as Twitter Blue and Super Followers. Definitely oversold and undervalued in my book.
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