Investing Update: Insiders Are Still Buying
What I'm buying, selling & watching
We’re now seeing a great debate of whether we’re in a bear market rally, or if we are witnessing the beginning of a bull market. You ask ten people you will get five saying bear market rally and five saying a bull market.
It looks to me that people got entirely too negative in June. Now as we go through earnings season we see that companies earnings are not as bad as feared. The market has just survived a period of recession fears, war repercussions, and rising rates. The biggest fear looking forward is something that nobody is planning for. All the things the market has battled through looks to me like it has green returns in the future. Could we really have turned the bear around already and now beginning a bull market? I’m starting to really lean in that direction.
One of the best chartist on the market in my view is J.C. Parets at All Star Charts. He shared two charts that we need to pay attention to. He is the first person who I follow correctly state when stocks had peaked. When he is indicating that we are possibly looking at year 3 of a bull market, we best listen. Here is what he is showing.
Insiders Are Still Buying
Im my June 4th Investing Update, I had indicated that insiders had been buying. That trend has continued. Insiders are still buying. The chart below from SentimenTrader shows that this signals the arrow pointing upward over the next few years for the S&P, in comparing to past history.
Insider buying has always been one of the closest monitored signs of bearishness or bullishness in the market outlook. If anyone has a pulse on what’s going on and what the near future looks like, it’s the insiders at the these companies.
Hedge Funds 13Fs Are Out
This week the 13Fs were due for any moves made through Q2. These are quarterly reports filed by any institutional investment manager with at least $100 million in assets under management.
Here is the breakdown of the top 5 holdings for some of the most watched hedge funds.
Here is the heat map from WhaleWisdom for the most activity in Q2 based on those 13Fs. Two semis stocks lead the way. Amazon, Google and Microsoft seem to really be favorites among them
First Time This Year More New Highs, Than New Lows
It took 38 weeks for there to be more new highs than new lows. As the below chart shows the new low list peaked in May and has been retreating since the market bottom in June. This is a relatively positive sign for the possibility of a new bull market forming.
Moves I’ve Made
In my last Investing Update, I had indicated I thought Google and Nvidia were two of the most oversold stocks. I’ve added to both of those positions this week. When we go higher, whether it’s now or down the line, these stocks will be among the leaders.
Google (GOOGL 0.00%↑) Added shares at $118.50. It's one of the cheaper tech stocks that I follow. Here is how it compares versus some of the other large cap tech stocks.
Google P/E 22
Netflix P/E 23
Apple P/E 28
Microsoft P/E 29
Tesla P/E 106
Amazon P/E 128
Nvidia (NVDA 0.00%↑) Added at $183. The semis have been sold off and in my opinion it's just a matter of time before Nvidia doubles. I really like the outlook for this stock.
The Coffee Table ☕
Josh Brown wrote an interesting post entitled, Why the market is bouncing. He talks about the money having to go somewhere and the benefit of the 60/40 portfolio construction.
Another good post on the state of the market that I read was from Michael Batnick. His post What’s the Bull Case? speaks about being too bearish and how hard it is to stick with a long-term vision.
*Sponsored Content
Thank you for reading! If you enjoyed Spilled Coffee, please subscribe and/or give a gift subscription for others.
Spilled Coffee grows through word of mouth. Please consider sharing this post with someone who might appreciate it.
Disclaimer: This is not investment advice. You should not treat any opinion expressed as a specific inducement to make a particular purchase, investment or follow a particular strategy, but only as an expression of an opinion. Do your own research.