July 24, 2020

What to Invest in as Stock Market Tide Changes

Midas Letter
Midas Letter
What to Invest in as Stock Market Tide Changes

There’s a big reversal in momentum happening across U.S. equities and especially the NASDAQ (INDEXNASDAQ:IXIC).

We know markets have posted an unprecedented recovery in the last couple of months. But how long could that trend continue given the overbought reality, the current coronavirus pandemic data and geopolitical tensions?

There is a massive divergence in “smart money” and Robinhood investing. Institutions, hedge funds and central banks investment in equities is at a nine-year low despite the almost V-shaped recovery in markets. This separation between retail and institutional investing, historically, has been a massive indicator that the tides are shifting.

Another sign this reversal is starting to take place is the sell-off in both Microsoft Corporation (NASDAQ:MSFT) and Tesla Inc (NASDAQ:TSLA) despite their strong earnings reports.

Expectations for some stocks are very high – especially the technology names. So after this round of earnings, we might start to get a better understanding of true value.

Watch the full interview to see the momentum trades you should be paying attention to as markets rollover.


Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

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