Investment Articles from the First Half, That are Still Well-Worth Understanding

The Markets During the First Half of 2023 Were Reflective of the People that Trade Them

Financial markets reflect the collective actions and expectations of market participants. This includes rational analysis, irrational emotions, and at times less than rational analysis. The emotions and number crunching get their cue from a daily barrage of information including: profits, policy, panic, prices, politics, purchasing power, the president …and that’s just the Ps. So each day, as Channelchek prepares to deliver research, articles, and pertinent video content to subscriber’s inboxes, we plow through an abundance of information and hope to share what is either not being addressed or covered, or present front page news from the point of view of seasoned investors, not less experienced news writers.

Below are six articles, one from each month this year. Although I have favorites not included here, and these may not have been the most read or shared, they told a slightly expanded story than found on the mainstream take on the subject and are still relevant to some investors.  

As a content provider to this popular investment research platform, my job is not to call the market; it is to present thoughts and knowledge to help investors make decisions on small and microcap stocks along with the overall universe of investment opportunities. The insights below from earlier this year are still quite current, and worth digesting.  

January 2023

Will Three Bank Regulators Kill Cryptocurrency in 2023?

On the very first business day of 2023, three regulators announced concerns over businesses involved in cryptocurrency citing the lack of oversight, lack of standards, and unknown risk. As the year progressed, the three federal agencies, which do not include work on oversight being done by the SEC or CFTC, are now working hard to regulate what banks can do involving crypto. The SEC for its part has been creating headaches for some of the larger crypto exchanges. Banks are having a particularly difficult time incorporating the asset in their business.

February 2023

Michael Burry Warns Against the Market Hoping for Economic Weakness

Investment content providers love Michael Burry. The reason is that readership goes through the roof whenever his name is mentioned. Still, if there is nothing to write about the subject, or if it is old news, the writer, blogger, or vlogger is doing investors a disservice.

We’re choosy about when to take one of Burry’s rare tweets and decipher them for readers. But, we always try to be among the first when his fund’s public holdings are reported each quarter on SEC form 13-F. But there are only few times during the year when there is actually worthwhile news. This is because Burry is usually tightlipped. Unless required by a regulator, the successful hedge fund manager is out of the public spotlight, presumably crunching numbers and rebuilding old guitars.

This article is good advice that can be used any time the Fed is trying to reel in inflation.

March 2023

The CFA Institute Makes First Major Change to Program Since Inception

It was 1963 the last time the CFA Institute (Chartered Financial Analyst) made any changes to their prestigious designation. However, the investment world is changing, and the CFA Institute is responding in order to better serve those that benefit from the services of skilled analysts. In 2023 CFA candidates will have more choices, more study material available, and the ability to take credit for their rigorous studies beginning after passing Level I.

Some thoughts on why, eligibility, and the new focus are presented here along with how it should help keep the credential fresh and more useful.  

April 2023

U.S. Money Supply, Here’s Why it’s Critical for Inflation Forecasts

It wasn’t too long ago that the Federal Reserve did not announce its intentions. If a Fed-watcher or market participant wanted to know for certain if the FOMC adjusted monetary policy, the best they could do is see if measures of money supply increased or decreased. Weeks later the FOMC Minutes would be released, and the markets would know for sure what the Fed did at the previous meeting.

When the Fed became more transparent, the market focus on money-supply disappeared. This has now reversed as the stimulative money that had been injected into the economy to prevent undue weakness during the pandemic is now being methodically removed via quantitative tightening (Q.T.). The renewed focus on M2 is to make sure the Fed sticks with its plan. Signs that it may not be impact the amount of money available to chase goods and services, this impacts inflation.

The Fed’s battle to drain the cash put into the system, and do it in a way that doesn’t crash banks, or the overall economy is perilous, is continuing and well worth understanding.

May 2023

Solid Evidence a Recession is Unlikely this Year

Economists and news writers have been negative about the economic outlook, scaring people with the word recession since before the year even began. And while there are some weaknesses, the stimulative money supply is still exceedingly high, jobs are more abundant than workers, and home sales have not reacted as expected when mortgage rates rise from 3% to 7%.

The often-repeated line that the downward slope of the yield curve is a time-tested indicator of an impending recession was the echo chamber talking point that probably didn’t apply to this economy because of a novel Fed policy.

From a textbook position, those saying a negative yield curve indicates a recession got the answer right if they were taking a college quiz. However, those that were saying this inverted yield curve indicates a recession may have flunked. And if you copied off the economist next to you, and they somehow missed that the Fed owned 33% of all U.S. Treasuries outstanding, and because of their policy of yield-curve-control, the yield curve was not market-driven, and therefore not a reliable indicator of anything. What we know is that when the Fed buys one out of every three bonds, it leaves a mark on the area of the curve that they are active.

With higher than expected GDP released last week, most have stopped talking about a recession in 2023. We put out several articles beginning in 2022 explaining why others may have this yield curve indicator wrong, this is addition is most recent.

I highly recommend reviewing this article if your summer backyard barbecues include conversations about economic strength (or weakness).

June 2023

Why Small Cap Stocks Started to Attract Mega Cap Investors

Small Cap stocks had been lagging behind larger companies. Historically they are more volatile, but investors expect to be compensated over time for the additional risk they take. Yet, over a longer than normal period, they still lagged. This seemed to have changed; during the first week in June there were some days that small company returns had a little more giddy-up than they had in recent months or years. On June 6th we published the above article.

Small cap stocks finished the month well ahead of the large caps and even mega-cap companies. This momentum has carried into the second half.

Let’s Start the Second Half of 2023 Together

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I hope you found these six articles compelling, and if you have not registered for no-cost insights to your inbox each day, here’s your chance to start the second half with a slightly different investment angle.

Paul Hoffman

Managing Editor, Channelchek

Most Interesting Articles on Channelchek in 2022 (Editor’s Choice)

Image Credit: PSH

 The Year 2022 Brought Many Twists and Turns to Share with Readers – the Editor Picks His Favs

All markets are interconnected. In fact, markets are impacted by weather, war, worry, Washington, wages, waste, and that’s just the W’s. So each day, as Channelchek prepares to deliver research, articles, and pertinent video content to subscriber’s inboxes, we plow through a mountain of information and hope to share what is either not being addressed or covered, or present front page news from the point of view of seasoned investors, not rookie news writers.

Below are five articles that were published throughout the year on Channelchek. Although I have favorites not included here, and these are not the most read, I believe the below told a slightly different story than the mainstream narrative. As a content provider to this popular investment research platform, my job is not to call the market, it is to provide thoughts and knowledge to help you make decisions on small and microcap stocks and the overall universe of investment opportunities. Still, the content team is proud when, for example, the entire newswire exploded with the word “pivot” that we then reminded our readers there was nothing indicating a pivot was imminent or even being discussed among FOMC members. As most Channelchek content providers are investors, analysts, and market watchers, we were also proud to serve our readership by being among the first to dig through the $AMC $APE dividend and define the true effects to stakeholders.

I think you’ll find these five articles are still compelling, and if you have not registered for no-cost insights to your inbox each day, here’s your chance to start the New Year from a slightly different investment angle.

Click Here to Register.

#1 More Behind AMC’s APE Dividend than Meets the Eye

“So, ladies and gentlemen, gentlemen and ladies, TODAY WE POUNCE.” This is how the AMC Chairman began his letter to shareholders on August 4. The company announced a unique dividend to be awarded to listed shareholders later in the month. The impact of the dividend is still being felt and discussed among market participants.

#2 The Truth About the Fed Pivot Rumors

In this article explaining the Fed not pivoting but instead doubling down on describing a strong hawkish bias does not necessarily mean bad news for investors in stocks. It’s a follow-up article to  Don’t Fear the Rate Hike, which was widely read and shared on social media. There is information in the above Fed pivot article that I am certain will be as pertinent in 2023 as it was in 2022.

#3 What Investors Haven’t Yet Noticed About the Value in Some Biotechs

If you’re shopping for a wallet and one comes complete with $100 worth of cash inside and is priced at $60, would you think there is value to this purchase? A situation similar to this has evolved in many biotech stocks. The article was written in late May, and although it has only played out for a few companies in the sector, conditions still exist for a feeding frenzy in biotech stocks. Information within the article could also apply to other sectors that have lost popularity post Covid19.

#4 Reading Between Michael Burry’s Lines

The only real contact hedge fund manager Michael Burry has with the outside world is Twitter posts (which, since Musk’s arrival, Burry now promises not to delete), his quarterly SEC filing of holdings, and every four or five years he will allow an interview with Bloomberg via Bloomberg Msg. Investment content providers are all over every tweet and quick to tell the world what it means. There are even YouTube channels that exist only to guess at what Burry’s portfolio at Scion may hold and what Burry (maybe) thinks. They do this because many readers swarm to learn more about what he is preparing for.

Some of the most widely read and long-lived content on Channelchek are articles about this guru. Still we promise to only present his tweets, filings, and thoughts when the information seems useful.

#5 What Sectors Do Best With a Strong Dollar?

Written in late April, this article hit a need that stayed important to readers throughout 2022. While the exact numbers are no longer current, the knowledge of how one market impacts another is always worth tucking away in the back of your brain so that, as an investor or trader, you can be early on building a position rather than later when the trade may have already hit the news and lost the bulk of its move. While there are always moving pieces, especially when it comes to currency strength, this article, most often discovered through Google searches,  is super short but contains useful information.

Happy New Year

Thank you for letting us be a part of 2022. In the coming year, we have plans to continue everything we are now doing and add on some features that we believe will provide users with relevant information not found in too many other places.

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Paul Hoffman

Managing Editor, Channelchek