Let's Play a Game

Obviously there has been nothing like capitulation yet. This market has been flying since the Trump tax cuts, which in all honesty is a fine fundamental reason for valuations to climb, especially in a TINA market. But really, for at least three years it’s been ridiculous. Either this time is different or it’s not. We’ll revert to the mean or we won’t. Companies will be valued by their future cash flows or they won’t…and reasonably valued…not all GMEish and whatnot. Yeah, don’t fight the Fed…and if you don’t, don’t start (yeah, whatever, you get my point). There have been lots of great stories about all kinds of new styles of business, told with recently invented language, and the only thing I’m certain of is that some of them are true; but no idea which.

So the game…predictions: will we see capitulation? If so at what level (give or take 5%) and based on what measure? I’d suggest NASDQ, as that it where valuations have been “nose bleed” the longest and where the excess market cap is greatest.

Will the complex house of cards built upon sand blow down? The global money supply is a mere whisper in the “trade” winds https://fred.stlouisfed.org/series/M2. Money don’t grow on trees folks!!

To be clear, I wish no ill upon anyone. This market has been too dangerous, for too many, for too long. It’s out of hand and it’s been for at least three years.

My guess; capitulation begins around 12,500. NASDAQ drops somewhere below 9500. That’s where NASDQ was in February of 2020; not even two years ago. What happens from there I have no guess. Once the squeeze on margin accounts begins, we’re all standing under the falling piano.

Anybody else care to guess/predict?

Anybody else care to guess/predict?

I predict that I don’t know…
I predict that I will continue watching the charts…

My Portfolio app tracks 75 stocks and indexes and it is showing a slaughterhouse! The list might have missed some stock splits, let me know if you find any.

**Symbol    Date          High      Last  Down%**
NNDM   03-22-2016      88.90      3.35   96.2
XL     12-23-2020      32.59      2.07   93.6
EVGN   12-12-2013      19.99      1.29   93.5
QS     12-22-2020     131.21     15.31   88.3
SFIX   01-27-2021     106.41     15.89   85.1
DMTK   02-19-2021      79.76     11.85   85.1
PTON   01-13-2021     167.42     26.53   84.2
SSYS   01-03-2014     136.46     22.01   83.9
SPWR   07-11-2006      97.94     16.28   83.4
NVTA   12-10-2020      57.40     10.20   82.2
PACB   02-11-2021      51.15     10.24   80.0
EDIT   01-08-2021      90.58     18.23   79.9
PSNL   01-20-2021      51.02     10.35   79.7
FSLY   10-13-2020     128.76     26.53   79.4
APPN   01-27-2021     235.24     49.63   78.9
UPST   10-15-2021     390.00     94.20   75.8
TDOC   02-08-2021     294.75     72.03   75.6
TSP    06-30-2021      71.24     18.28   74.3
ZM     10-16-2020     559.00    145.89   73.9
AYX    07-09-2020     181.78     51.21   71.8
EVBG   02-24-2021     166.82     47.60   71.5
PINS   02-16-2021      89.15     28.46   68.1
COUP   02-18-2021     369.92    122.99   66.8
PLTR   01-27-2021      39.00     13.06   66.5
FATE   01-14-2021     117.40     39.87   66.0
NEOG   04-20-2021      96.67     35.42   63.4
SNAP   09-24-2021      83.11     30.66   63.1
DOCU   09-03-2021     310.05    117.80   62.0
NET    11-18-2021     215.48     84.78   60.7
SQ     08-05-2021     281.76    115.30   59.1
DOMO   08-26-2021      97.70     40.73   58.3
APPS   03-01-2021      94.74     39.58   58.2
TWLO   02-18-2021     443.49    185.84   58.1
ESTC   11-16-2021     186.68     82.52   55.8
IRTC   01-20-2021     268.46    121.89   54.6
ENPH   11-19-2021     267.74    122.65   54.2
BILL   11-09-2021     342.26    158.00   53.8
NTLA   09-03-2021     176.78     84.77   52.0
BEAM   07-01-2021     133.60     66.61   50.1
LICY   02-17-2021      14.25      7.31   48.7
SPLK   09-01-2020     223.59    116.25   48.0
PD     06-14-2019      57.37     30.76   46.4
CRWD   11-09-2021     293.18    158.59   45.9
TWST   01-20-2021     207.97    113.45   45.4
SPCE   02-11-2021      59.44     34.55   41.9
SITM   12-08-2021     334.98    194.57   41.9
APPF   12-28-2020     184.32    112.09   39.2
OKTA   02-12-2021     291.78    177.66   39.1
LCID   02-18-2021      58.05     35.46   38.9
LSCC   11-16-2021      84.99     52.05   38.8
DT     10-22-2021      78.76     48.37   38.6
ZS     11-19-2021     368.78    228.88   37.9
MDB    11-16-2021     585.03    365.48   37.5
TEAM   10-29-2021     458.13    286.69   37.4
MTCH   10-21-2021     175.53    111.70   36.4
DDOG   11-09-2021     196.56    125.14   36.3
ALGN   09-08-2021     729.92    467.99   35.9
VEEV   08-04-2021     340.98    221.32   35.1
CYBR   11-09-2021     198.81    130.35   34.4
SMAR   02-12-2021      84.41     56.22   33.4
SPSC   10-28-2021     173.12    115.78   33.1
RDVT   03-02-2020      26.48     17.99   32.1
ISRG   11-08-2021     365.42    264.14   27.7
ROST   05-07-2021     132.96     96.61   27.3
TSLA   11-04-2021   1,229.91    918.40   25.3
ROKU   02-16-2021     469.70    352.30   25.0
LSPD   09-22-2021     124.41     98.97   20.4
V      07-27-2021     250.93    202.00   19.5
ODFL   12-07-2021     364.00    299.97   17.6
QLYS   01-27-2021     145.30    122.38   15.8
^IXIC  11-19-2021  16,057.44 13,539.30   15.7
MA     04-28-2021     395.65    338.76   14.4
QCOM   12-15-2021     189.28    165.45   12.6
AAPL   01-03-2022     182.01    159.78   12.2
^GSPC  01-03-2022   4,796.56  4,356.45    9.2
^DJI   01-04-2022  36,799.65 34,297.73    6.8

That’s a lot of pain!

Denny Schlesinger


But the question still is has the market bottomed? And which of the stocks are likely to recover?

Are you buying?

I’m very much interested in adding to TSLA, down over 10% today but I’m waiting because this is not over. It’s at 835, resistance at 550. My trades since November have averaged $872.

Stupid headlines:

Tesla is disappointing investors because it doesn’t have a $25,000 car: analyst


Why would Tesla want to make $25K cars when it can sell all the $50K cars it can make? The $25K car was a good idea when ‘competition is coming’ but shortages killed the idea for the duration. People anchor! Bad idea!

Denny Schlesinger


Hi Pete:
Assuming you are asking me specifically, absolutely not; but I am paying close attention. I like the looks of Palantir, in a way, but think it is a candidate for reverse split. I know that reverse splits aren’t supposed to affect the overall value of a position, but my life experience tells me otherwise.

I have a bunch of CAPS picks that will trigger if a capitulation ever comes. Then I’ll start looking closely at those. Some are probably only 10 or 15% below current trades (SNOW) but others are closer to 50% below. Basically I’m looking at the charts and tracing back to where they sky-rocketed. I call it “backsies.” A number of these come from Saul’s board or are ARKK components, that sort of thing.

I try to put a comment on all of my CAPS picks; mostly for my own edification. Otherwise I can’t learn anything. An interesting dynamic there: my rating is up about 30% in the past week or two, but was down a full percent today. It’s possible that this means that there is discernment happening in the risk-on names (like NFLX and BIGC) and the risk-off names are being tossed with the bathwater (like IBM and POWL), if you will. My recent real life purchases have been few, but BYND (because we like the product) and POWL (because I like the dividend). I bought CALM because of my inside information and OGN because Buffett owned it, it was mentioned on this very board, and it seemed to have a reasonable story. Then I figured out why Buffett sold it, reminded myself of the nature of many spinoffs (and I’m lookin’ at you, KD!) and so maybe that wasn’t the best choice. We’ll see.

Interesting times; I’d certainly like to know how the rest of you are feeling. And by the way, my whole company 401k has been in a guaranteed 3% fund for over a year; that is 60% of my port. I have about 10% of our Roths in cash. Needless to say I vastly underperformed in 2021, but I don’t feel too badly about it at the moment. A twist on TMFRob’s salutation; “don’t risk what you need for what you don’t need,” which might be a Buffett quote-ish. The whole market has looked super risky to me for at least 3-5 years.

*should I be thrilled that ATVI is being bought by MSFT for $95/share? I bought it in 1987 for $2/share and is the stock I’ve held the longest (by far). Alas, in the time that I’ve held it, it reverse split 1-20 and 1-10. My $400 has turned into (maybe) $190…less the time component of investing. I have never owned a position that increased after a reverse split. PLTR might be different.

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IIRC you said recently that you would get back in Tesla if it was below 900. So are you back in?

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IIRC you said recently that you would get back in Tesla if it was below 900. So are you back in?

I never left Tesla! I have a LTBH position that I try to add to and a smaller trading position where I try to take advantage of the crazy volatility – buy low, sell high, rinse, repeat.

I didn’t expect an 11% one day drop! I spent a good amount of time yesterday debating between buy and wait. Since I could not make up my mind I think today I’ll buy half and wait with the other half. A drop to 550 is as likely as a sharp rebound. Why the selling on great earnings? Margin calls? Short sellers should be buying to take profits!

Anyone who says he understands markets is exaggerating!

Denny Schlesinger

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I agree that the market has been overpriced and high risk for the past 3-5 years. I cashed out 3 years ago and have sat on 90% cash in our retirement savings as we are just hitting retirement age and I don’t have the stomach to lose money in the stock market. I guess 2001 did that to me.

I know that this is not sustainable, and I’ve lost out on market gains in the past 2-3 years, but I sleep well and our Financial Analyst (an hourly paid CPA who does not sell anything but his time and expertise) tells us that we are OK - but should really be looking at higher returns going forward.

Hence, we’ve put the most we can (10K each year for the past few years) into I-Series bonds currently paying 7.2% and we’ve kept DW’s TIAA-CREF invested in a targeted retirement date fund. That represents 10% of our retirement savings.

I’ve been looking forward to getting back in with some of our retirement cash (maybe 30-40% max) but have been waiting for the 50% drop that may have started this past couple of weeks. I’m in no rush to re-invest, I’ll sit back patiently (as I have been doing for the past couple of years) to get in at what I hope to be a much more reasonable purchase point.

I also started to follow Saul’s board a few months ago, and I’m also amused with the rah-rah-rah of the regulars there. I did take $10K of play money and put it down on UPST back in October and you know what that looks like now!! No more playing with the roulette wheel for me.