At the end of this week we saw increased volatility. VIX has spiked in last two days amid anxiety over Silicon Valley Bank (SVB) default risk and potential implications for the regional banks and private equity sectors, and overall increase in systemic risk. VIX has spiked 45% this week, and 20% alone on Friday, when it temporary touched 28.97 – highest reading since October’22 sell-off, with option volume 3.7x the typical daily volume. Calls made 70% of volume and the put-call ratio was at 1.3 compare to average of 1.5 over 2022. SVB had billions in deposits of his Venture…

End of 2021 marks the peak of the raging bull market supported by a fast recovering economy and record fiscal and monetary stimulus. At that time, the risk of inflation and overheating of the economy were discussed by everyone. Valuations were on the peak and therefore any disappointments were severely punished by the market (the most in recent history). In Q1 the market was unforgiving for missing earnings.  In contrast in Q2 – earnings misses are not punished at all. This is because sentiment has already become bearish. Early in the year market has significantly declined and valuations have shrunken.…

While the rule of thumb indicates recession as two consecutive quarters of falling real GDP, many institutions look also into other variables to confirm economic downturn. This usually includes consumer and business spending, industrial production and labour market. Current situation is widely recognized by experts as a ‘technical recession’ that is likely to turn into a real recession event over the next few months. Here are few key reasons this may occur:   Preceding Economic Overheating Conditions Economists agree that overheating suggests a very high probability of recession (Alex Domash, Lawrence H. Summers, 13 April 2022 link). There are many…

Earnings growth is one of the most important component…. …. article in progress…

“We believe that the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere” “Work-from-home became work-from-any-home on Airbnb.” “Idea of strangers staying together, in each others’ homes, was not so crazy after all,” Brian Chesky, Airbnb CEO   The flotation comes at the time of an enthusiastic stock market and when investor appetite for tech companies is soaring. Price of $68 per share for 51,323,531 and $47b valuation fetched ahead of the listing. topped the initial target range of $44-$50 and the final price range of $56-$60 raised on the back…

Analysts like to categorize stocks as either value or growth. This is done with the caveat that some stocks resemble both types, or cannot be clearly categorized as either. Knowing the difference between two is essential to assess the risk and the opportunities for your portfolio. This article will briefly introduce characteristics of growth and value investments. It will also clarify what are desirable outcomes for growth and value investors, what are the risks and more importantly the opportunity costs for both investment styles. Let’s start with a simple description.   Growth Stocks Shares of the companies that are experiencing…