Weekly Market Bites

end of week markets update

1) Some guy in Vancouver turned $70k into $300 million trading Tesla options, then lost it all. Now he is suing the bank for bad investment advice 🤣.

This story is so crazy. Going from almost to $300 million has to be in the world record of investing returns. I seriously hope this guy stashed a couple of million somewhere or bought a house and did not actually lose it all.

2) On Wednesday, a Judge ruled Google has an illegal monopoly in internet search. The stock is (-3.64%) for the week.

The last decade and a half has seen the epic rise of the Magnificent 7: Apple, Microsoft, Alphabet, Amazon, Meta Platforms, NVIDIA and Tesla.

These companies have defied gravity with their tech, network effects, and sheer scale, becoming some of the most successful in history.

Commercially they seem almost untouchable, and its been an open secret for a long time that many of them operate practical monopolies. Which is illegal in the US, where anti trust acts exist to limit companies reaching this level of dominance.

The law caught up with Google, a decade after everyone else figured it out.

3) Even with talk of Israel thinking of hitting Iranian oil fields - oil prices are not freaking out.

Javier Blas, the top commodity financial journalist around today, recounts how that was unthinkable 15 years ago. Before, much less dangerous events in the Middle East would send oil prices soaring 10% easily.

Today, the US produces so much oil, the markets tend to shrug off middle eastern concerns. But if a full-blown war breaks out, the shockwaves will still hit hard.

4) Here’s a wild example of AI shaking things up:

Starting next year, Wimbledon is replacing human officials with artificial intelligence to call ‘out’ and ‘fault’ shots at next year’s championships.

Guess these guys are out of a job.

5) Should investors just stick with the US stocks or diversify internationally?

For the past decade diversifying your stock allocation away from the US has meant lower returns. The thing is that historically there have been alternating periods of over-performance between US and International.

This is an interesting read regarding a difficult decision investors have to make.

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International equities have underperformed US equities over the last decade.

What’s done even worse? Emerging Market international equities.

EM stocks have almost gone nowhere, returning an annualized return of 3.2% over the last 10 years, compared to 13.3% for the S&P500.

Everybody is worried the top tech stocks today are an overvalued bubble.

The Visual Capitalist did an awesome compare to the top dotcom bubble stocks back in 2000.

They Mag 7 are expensive for sure.

But compared to the dotcom stocks, they have higher profit margins, larger cash reserves, and are more attractively priced (lower FWD P/E ratios).

And finally, some parting wisdom