The Nasdaq is on its final run and is going vertical, a classic end of bubble move. This is trader heaven and turns into speculator hell for those who think that markets do grow to the skies. It could go up a long way in price but it won’t go for long in time. It could last to Christmas, it could fold tomorrow, but my feeling is that unless this bubble is cut down by the Fed, the final move will be large and quick.
The coronavirus market downturn spurred young people — in some cases, for the first time in their lives — to get started with investing.
A spike in new accounts at online brokers show that young and inexperienced investors saw the coronavirus downturn as an entry point into the world of investing and not a time to hunker down.
As shares of Norwegian Cruise Line continued to sink like the Titanic—down 80% from the end of 2019 to $12 per share by late April—Scott Dahnke and his team at L Catterton were quietly eyeing the wreckage. The partners at his Greenwich, Connecticut, private equity firm had already made a killing by taking a cruise ship-based beauty chain public and they were focused on high-end brands. After all, the “L” in their name comes from their financial backing by LVMH, the French luxury goods giant and they had already scored a string of successes from investments in the upscale home decorator Restoration Hardware, Lily’s Kitchen, a London-based organic dog food maker and Peloton, the Internet-connected stationary bicycle concern.
But this was new territory. Never before had they seen such a rapid reversal of fortune of a well-regarded brand. Dahnke decided the time was right to pounce, despite the fact that in a best-case scenario, Norwegian wouldn’t be expected to sail any of its fleet’s cruise ships for at least two months.
Michael Gayed, an investor who called the coronavirus sell-off and recent stock rally, warned of two market crashes this year in a MarketWatch interview.
REUTERS: Amazon.com Inc on Thursday said it could post its first quarterly loss in five years even as revenue surges because it is spending at least US$4 billion in response to the coronavirus pandemic, including plans to test its workforce for COVID-19.
It is a long-held investment truism that active funds may struggle in frothy markets, but they deliver the goods at times of distress. They aren’t compelled to continue investing in companies who growth prospects are lacklustre simply because they are a large part of an index. They can be agile. Or so the story goes.