A Bunch of Bull... Traps

[] The latest bull trap was brutal, and investors need to prepare themselves for a continued selloff across the entire market. Here’s what to do... [View in browser]( . The latest bull trap was brutal, and investors need to prepare themselves for a continued selloff across the entire market. Here’s what to do... [View in browser]( . . [] [Havens Investment Letter] [] [Havens Investment Letter] [] [] [] Did This California Tech Wiz Discover... The Perfect AAPL Trade? One reclusive tech genius in California used his powerful trade-testing software to perfect his system for trading AAPL. The results so far -- a 70% win rate and a 3-to-1 reward-to-risk ratio. [Click here to catch the recent reveal of the "Perfect" Apple Trade]( [] --------------------------------------------------------------- [] Did This California Tech Wiz Discover... The Perfect AAPL Trade? One reclusive tech genius in California used his powerful trade-testing software to perfect his system for trading AAPL. The results so far -- a 70% win rate and a 3-to-1 reward-to-risk ratio. [Click here to catch the recent reveal of the "Perfect" Apple Trade]( [] --------------------------------------------------------------- [] [] Of Bulls... And Traps... [Garrett Pic] Dear Investor, Again, when I say that cash is your friend, I mean it. And when momentum is red… I stay clear of trying to call a bottom. Executives aren’t buying their own stocks at these declining prices… So, why would I? There is no shortage of talking heads on CNBC and elsewhere trying to catch a falling knife. I’m not going to be one of them. And I’ll show you today - again - why there appears to be much more damage ahead. The reason? Well, look at what happened to Amazon.com (AMZN). Amazon Collapses Again It was another bad day on the tech front. The NASDAQ fell nearly 5% on the day. Alphabet (GOOGL) bombed. Microsoft (MSFT) cratered. Apple (AAPL) couldn’t find support. And Amazon? It plunged 7.6% to finish the day at $2,328.14. Now, Amazon is supposed to be the company that owns the U.S. supply chain. But a funny thing is happening in the tech sector that too many people seem to be ignoring. We’re undergoing a massive downward trend known as “Value Compression.” With interest rates surging (the 10-year bond topped 3.08% today), technology stocks can no longer justify their lofty valuations. A stock trading at 35 times earnings with little profitability can’t justify a return in an environment where GDP is struggling, inflation is rising, and the Fed is jacking up interest rates. To justify a price to earnings ratio of 35, a company must pay 100 percent of its earnings (profits) to its investors for 35 years. That’s pretty simple. That’s pretty simple. A higher PE ratio means that investors are effectively paying MORE for less, but they’re hoping that the company will aggressively increase profits to justify a higher price in the future. What about companies that trade at a high “price to sales” ratio. What does that mean? It means that the stock is trading in relation to its annual revenue. If a stock trades at a price to sales of 10, that means that to justify the price of the stock, the company must pay 100% of its REVENUE for 10 years to its investors. Do you notice the difference? A PE ratio measures the years of profits paid to the investors. A PS ratio would measure years of REVENUE paid. Revenue is a much different animal. Profits are a percentage of revenue. Revenue is a gross number, which means that the company would theoretically have to pay 100% of every dollar it earns for the number of years reflected in the PS ratio. Take a company like Datadog (DDOG), which has a PS ratio of 34. To justify anyone’s investment, the company would need to pay 34 years of revenue to its investors. No profits. No R&D spending. No taxes, which is pretty much illegal. This valuation is completely insane. Either the company must grow at a breakneck pace and become profitable fast, or the stock is going to decline. My bet is on the latter. What About Amazon? Now, I mentioned Amazon, one of the world’s leading tech companies and most widely held stocks across institutional and retail portfolios. For a decade, Amazon has benefited from the Federal Reserve’s cheap money policy and low interest rates. The stock is now off 31.5% for the year. And, even though it has one of the lowest PS ratios of all FAANG stocks, it has not been immune from valuation compression. The chart below is a measure of AMZN’s PS ratio dating back to 2012. [AMZN PS Ratio]( The compression has been accelerating over the last few months. Amazon’s PS ratio is now at its lowest level since 2016. And there might be even more downside. This should be a concern to anyone who owns other big tech stocks. A price to sales ratio of 2.5 is not very high in comparison to say the 10.97x of Microsoft. Valuations might not mean much on the way up… but they certainly do on the way down. I’m steering VERY clear of overpriced stocks in the tech sector. Instead, I’m focused on tech stocks with good fundamentals and cheap buyout multiples. We’ll discuss a few ideas on Friday. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets [] --------------------------------------------------------------- [] [] Of Bulls... And Traps... [Garrett Pic] Dear Investor, Again, when I say that cash is your friend, I mean it. And when momentum is red… I stay clear of trying to call a bottom. Executives aren’t buying their own stocks at these declining prices… So, why would I? There is no shortage of talking heads on CNBC and elsewhere trying to catch a falling knife. I’m not going to be one of them. And I’ll show you today - again - why there appears to be much more damage ahead. The reason? Well, look at what happened to Amazon.com (AMZN). Amazon Collapses Again It was another bad day on the tech front. The NASDAQ fell nearly 5% on the day. Alphabet (GOOGL) bombed. Microsoft (MSFT) cratered. Apple (AAPL) couldn’t find support. And Amazon? It plunged 7.6% to finish the day at $2,328.14. Now, Amazon is supposed to be the company that owns the U.S. supply chain. But a funny thing is happening in the tech sector that too many people seem to be ignoring. We’re undergoing a massive downward trend known as “Value Compression.” With interest rates surging (the 10-year bond topped 3.08% today), technology stocks can no longer justify their lofty valuations. A stock trading at 35 times earnings with little profitability can’t justify a return in an environment where GDP is struggling, inflation is rising, and the Fed is jacking up interest rates. To justify a price to earnings ratio of 35, a company must pay 100 percent of its earnings (profits) to its investors for 35 years. That’s pretty simple. That’s pretty simple. A higher PE ratio means that investors are effectively paying MORE for less, but they’re hoping that the company will aggressively increase profits to justify a higher price in the future. What about companies that trade at a high “price to sales” ratio. What does that mean? It means that the stock is trading in relation to its annual revenue. If a stock trades at a price to sales of 10, that means that to justify the price of the stock, the company must pay 100% of its REVENUE for 10 years to its investors. Do you notice the difference? A PE ratio measures the years of profits paid to the investors. A PS ratio would measure years of REVENUE paid. Revenue is a much different animal. Profits are a percentage of revenue. Revenue is a gross number, which means that the company would theoretically have to pay 100% of every dollar it earns for the number of years reflected in the PS ratio. Take a company like Datadog (DDOG), which has a PS ratio of 34. To justify anyone’s investment, the company would need to pay 34 years of revenue to its investors. No profits. No R&D spending. No taxes, which is pretty much illegal. This valuation is completely insane. Either the company must grow at a breakneck pace and become profitable fast, or the stock is going to decline. My bet is on the latter. What About Amazon? Now, I mentioned Amazon, one of the world’s leading tech companies and most widely held stocks across institutional and retail portfolios. For a decade, Amazon has benefited from the Federal Reserve’s cheap money policy and low interest rates. The stock is now off 31.5% for the year. And, even though it has one of the lowest PS ratios of all FAANG stocks, it has not been immune from valuation compression. The chart below is a measure of AMZN’s PS ratio dating back to 2012. [AMZN PS Ratio]( The compression has been accelerating over the last few months. Amazon’s PS ratio is now at its lowest level since 2016. And there might be even more downside. This should be a concern to anyone who owns other big tech stocks. A price to sales ratio of 2.5 is not very high in comparison to say the 10.97x of Microsoft. Valuations might not mean much on the way up… but they certainly do on the way down. I’m steering VERY clear of overpriced stocks in the tech sector. Instead, I’m focused on tech stocks with good fundamentals and cheap buyout multiples. We’ll discuss a few ideas on Friday. Enjoy your day, [Garrett Sig] Garrett {NAME} Chief Analyst, American Markets --------------------------------------------------------------- [] Get A "Secret" List Of High-Probability Daily Trades... [rob booker]( [MOVE FAST! Click here now]( --------------------------------------------------------------- [] [] Get A "Secret" List Of High-Probability Daily Trades... [rob booker]( [MOVE FAST! Click here now]( --------------------------------------------------------------- [] [] [] Now Available: The Brainchild of Wall Street Mavericks — the Perfect Apple Trade If you ever thought that it’s way too late to see significant movement in major stocks like AAPL... You need to think again… The Perfect Apple Trade Has Been Discovered Thanks to the help of a maverick group of former Wall Street traders… and a state-of-the-art artificial intelligence platform… California tech wiz and renowned trader Micah Lamar has uncovered obscure “trade cycles” in AAPL shares capable of signaling major movement… All in a matter of days... These Aren’t Common Results Nearly all market analysts are clueless about these moves… But Micah’s proprietary system has been able to predict significant moves in AAPL stock… over and over again. Now, You Can See the System for Yourself! He’ll walk you through his AAPL system step-by-step… and answer the most common questions he sees... You’ll even be able to gain access to Micah’s proprietary Apple trading tool… Plus, you’ll see the remarkable results Micah’s system has returned, just by placing one trade on iconic Apple Inc., the crown jewel of tech stocks… [Click here to gain immediate access to this presentation]( You’ll be one of the lucky few to see the Perfect Apple Trade system yourself… And meet the brilliant inventor behind this system… [Catch it all here]( --------------------------------------------------------------- [] [] [] Now Available: The Brainchild of Wall Street Mavericks — the Perfect Apple Trade If you ever thought that it’s way too late to see significant movement in major stocks like AAPL... You need to think again… The Perfect Apple Trade Has Been Discovered Thanks to the help of a maverick group of former Wall Street traders… and a state-of-the-art artificial intelligence platform… California tech wiz and renowned trader Micah Lamar has uncovered obscure “trade cycles” in AAPL shares capable of signaling major movement… All in a matter of days... These Aren’t Common Results Nearly all market analysts are clueless about these moves… But Micah’s proprietary system has been able to predict significant moves in AAPL stock… over and over again. Now, You Can See the System for Yourself! He’ll walk you through his AAPL system step-by-step… and answer the most common questions he sees... You’ll even be able to gain access to Micah’s proprietary Apple trading tool… Plus, you’ll see the remarkable results Micah’s system has returned, just by placing one trade on iconic Apple Inc., the crown jewel of tech stocks… [Click here to gain immediate access to this presentation]( You’ll be one of the lucky few to see the Perfect Apple Trade system yourself… And meet the brilliant inventor behind this system… [Catch it all here]( --------------------------------------------------------------- [] [] Article Recap - [Of Bulls... And Traps...](#i572731) - [Now Available: The Brainchild of Wall Street Mavericks — the Perfect Apple Trade](#156381) --------------------------------------------------------------- [] Article Recap - [Of Bulls... And Traps...](#i572731) - [Now Available: The Brainchild of Wall Street Mavericks — the Perfect Apple Trade](#156381) --------------------------------------------------------------- [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information, please visit [our disclaimer page here.]( Sent to: {EMAIL} [Unsubscribe]( Godesburg Financial Publishing Inc., 251 Little Falls Drive, Wilmington, DE 19808, United States