It is urgent to wait
November 9, 2022
The burst of the bubble has begun. The airship in which we, investors, find ourselves, slowly loses altitude. To our great pleasure: the closer we are to the ground, the less brutal the fall.
So, like us, you're probably wondering when to reinvest. When will the airship be low enough to jump in and follow it on its next ascent.
Let's take a look at the "sexy stocks", the fetish stocks of investors. Their valuations have peaked in 2021, totally disconnecting from their fundamentals.
Where are they today?
SnapLe développeur de l’application Snapchat a vu son action chuter de 80% en 1 an.The value of his company has dropped from $85 billion to $15 billion. An opportunity?Surely not, the company is showing an operating loss of $1.1 billion over the last twelve months. With no profitable scenario in sight, Snapchat's business model definitely seems to be based on ephemerality.
UberOn the Uber side, the stock is down 39% year-over-year.However, the accounts show the same thing. Operating result over 1 year: loss of $2.2 billion.Once again, the business model seems to be doomed to negative margins and value destruction. The attempt to raise prices in order to find the right balance has resulted in a massive return of cabs in the game. A deserved redemption?Note that Uber is still worth $55 billion on the stock market...
CoinbaseThe cryptocurrency exchange platform is losing 83% of its value over a year.Crypto prices in free fall, trading volumes at a standstill, and a drop in the number of users: a painful hangover for the crypto ecosystem. Over the past 12 months, Coinbase has posted a $1.2 billion operating loss. A very uncertain future for a company still worth $13 billion. When you praise speculation, you have to assume that you are at the heart of speculation.
This situation concerns a large number of companies among which we can still mention Shopify, Snowflake, Peloton, WeWork, Doordash, ServiceNow, etc.
Conclusion: the airship is still high. And there is still a lot of air to deflate.
If you wish to reinvest, be careful and selective.
Market and Portfolio Focus
Behaviour:
Over the week (from 31/10 to 7/11), the fund is up 2.4% and the Nasdaq is down 3.9%.The resistance of our equity lines and the performance of our short position on the Nasdaq explain this performance.
Lines:
At the beginning of the week, the pre-FED meeting market rally seemed particularly inconsistent to us. With the effect of good news already in the price, we increased our short position on the Nasdaq by 50 contracts. As we expected, the FED's stance was less accommodative than the market anticipated. We liquidated our 50 contracts 2 days later, taking a profit of $550,000.
On the equity side, we increased our position in Biontech last Thursday following the announcement of a meeting between German Chancellor Olaf Scholz and Chinese President Xi Jinping. Mr. Scholz was accompanied by company executives, including Biontech's founding CEO Ugur Sahin. Speculation that Biontech's zero covid strategy would be released and that its vaccine would be approved in China helped us crystallize $250,000 in profits.On the bond side, we continue to gradually increase our exposure, now at 17% of the fund.
Have a great week,Pierre
Factsheet d’octobre disponible by clicking here
Disclaimer
This presentation is a promotional document. The content of this document is communicated by and is the property of Monocle Asset Management. Monocle Asset Management is a portfolio management company approved by the Autorité des Marchés Financiers under number GP-20000040 and registered with the ORIAS as an insurance broker under number 10058146. No information contained in this document should be construed as having any contractual value. This document is produced for information purposes only. The prospects mentioned are subject to change and do not constitute a commitment or a guarantee. Access to the products and services presented here may be subject to restrictions for certain persons or countries. Tax treatment depends on individual circumstances. The fund mentioned in this document (Monocle Fund SICAV) is authorized for marketing in France and possibly in other countries where the law permits. Before making any investment, it is advisable to check whether the investor is legally entitled to subscribe to the fund. The risks, costs and recommended investment period of the funds presented are described in the KIDD (key investor information documents) and the prospectus, available free of charge from Monocle Asset Management and on the website. The KIDD must be given to the subscribers before the subscription. Past performances are not a reliable indicator of future performances. Monocle Asset Management cannot be held responsible for any decision taken or not taken on the basis of information contained in this document, nor for the use that could be made by a third party. The investor may lose all or part of the amount of capital invested, as the funds are not capital guaranteed.
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