Trading the infrastructure bill, plus strategies for Archegos fallout

Hello everyone! Welcome to this weekly roundup of Investing stories from deputy editor Joe Ciolli. Please subscribe here to get this newsletter in your inbox every week.

biden pittsburg infrastructure plan getty

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


How to trade the infrastructure bill

Biden infrastructure

President Joe Biden recently announced a $2 trillion plan to rebuild American infrastructure. We spoke to Global X infrastructure analyst Andrew Little about 5 stocks he thinks stand to benefit.

UBS is also looking for opportunities specifically in the commodity space. The firm recently revealed 8 such trades it says can each lead to 10%-plus returns as raw-material prices surge.

Read the full stories here:

An analyst for the top-performing infrastructure ETF in the US this year shares 5 stocks set to benefit for years from Biden and Congress’ expected multitrillion-dollar package

UBS says these 8 commodity trades could make you a return of at least 10% as the reopening and Biden’s $2 trillion infrastructure plan send prices surging


Strategies for Archegos fallout

Bill Hwang

For investors that were spared serious fallout from the implosion of Archegos, the whole ordeal is a good opportunity to reevaluate certain approaches, and perhaps even capitalize on the chaos.

From a “Warren Buffett trade” investors can use to take advantage, to strategies designed to profit from mispricings, we’ve been busy compiling recommendations.

Read the full stories here:

An options expert breaks down how the secretive derivatives instruments at the center of the Archegos implosion work – and shares a ‘Warren Buffett trade’ that investors can execute to take advantage of stocks impacted by the $30 billion selling spree

2 experts in the risky product that triggered Archegos’ $20 billion margin call break down the market implications of the blowup – and share how traders can take advantage of the heightened volatility

An investor who used to work for Baupost’s Seth Klarman explains why he thinks the Archegos implosion is the ‘Frankenstein version of GameStop’ – and shares how to replicate hedge fund performance without taking on huge risks


99th-percentile internet investing

Ryan Jacob

Ryan Jacob’s mutual fund – the Jacob Internet Fund (JAMFX) – is up 201% over the last year. He shared with us 5 stocks he thinks will crush Wall Street estimates going forward. And while he tends to stay away from large-cap firms, he shared which two FAANMG stocks he likes most.

Read the full story here:

Ryan Jacob’s internet fund tripled in value over the last year and beat 99% of its peers over the past 3. He shared 5 stocks he’s betting on for their ‘very significant’ upside – and the 2 FAANMG firms he thinks will grow 20-30% per year.


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider

Hedge funds vs. Chamath, plus finding gems in overlooked mid-cap stocks

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through the current market and investing landscape. The newsletter will be taking a week off and returning on April 11. Here’s what’s on the docket:

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Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


Check out our new investing e-book:

The definitive guide to picking long-term stock-market winners, according to America’s top-ranked fund managers.

Investing editor Akin Oyedele showcases eight star fund managers, their performance highlights, and their five biggest stock holdings.


Hedge funds vs. Chamath

iconq chamath palihapitiya

SPACs have been caught in a harsh sell-off along with growth stocks as bond yields rise. Billionaire Chamath Palihapitiya has been among those most affected, with short-sellers making $40 million betting against his SPACs year-to-date. We break down the wagers being made against Chamath’s three most high-profile SPACs.

Read the full story here:

Hedge funds are ramping up bets against Chamath Palihapitiya’s SPACs and have already taken home $40 million this year. Here’s a detailed look at the wagers they’re making.


The case for overlooked mid-cap stocks

Amy Zhang

Amy Zhang manages $11 billion across small- and mid-cap funds for Alger – one of which has generated a 138% return over the past year. She explains why the mid-cap equity space is teeming with opportunity, and shares 3 of her top stock picks.

Read the full story here:

A fund manager who’s returned 138% in the past year shares 3 mid-cap stocks poised to surge as the economic reopening accelerates – and breaks down why investors should consider this overlooked yet outperforming asset class


4 charts for the future

A trader waits for news while working on the floor of the New York Stock Exchange following a halt in trading in New York, July 8, 2015.  REUTERS/Lucas Jackson

David Keller is the chief market strategist at Stockcharts.com and an expert at technical analysis. We asked him what charts investors should be looking at now, and what they’re indicating assets might do going forward. He responded with four that he dissected in detail.

Read the full story here:

A chief market strategist shares 4 must-see charts that forecast the next big moves in stocks, bonds, and gold – and 6 trades set to surge on what happens next


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider

Investing in sports cards, plus a 3-part bitcoin strategy spanning the entire ecosystem

Hello everyone! Welcome to this weekly roundup of Investing stories from deputy editor Joe Ciolli. Please subscribe here to get this newsletter in your inbox every week.

NBA Top Shot Press Logo_Collectibles_
NBA Top Shot.

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets, as well as what to expect in the coming weeks. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


Your weekly outlook

This past week featured more tug-of-war in the stock and bond markets between fears of runaway inflation and confidence in the economic recovery. The highlight of the week was Fed Chair Jerome Powell’s press conference as part of the central bank’s rate decision, which seemingly soothed investor nerves and caused stocks to surge into the close.

Then the next day everyone seemed to get cold feet. The 10-year Treasury yield spiked yet again to a more than one-year high, signaling renewed inflation fears. That helped take a 3% bite out of the tech-heavy Nasdaq on Thursday. Now heading into next week the market once again finds itself seemingly rudderless and vulnerable to inflationary mood swings.

The input to watch this week will once again be the 10-year yield, which has become the foremost indicator of inflation fears. It’s the highest since January 2020 right now. If investors continue to question Powell’s insistence on maintaining stimulative asset purchases, it could spike even more. Then stocks – namely tech – could tank further. Stay tuned.


Investing in sports cards

Trading cards

The rise of sports betting and NFTs like NBA Top Shot have fueled a trading boom in sports cards. Collectable is a trading platform that allows fans to buy fractional shares of valuable cards. CEO Ezra Levine breaks down how digital collectibles could boost returns and hedge inflation.

Read the full story here:

NFTs like NBA Top Shot are fueling a trading boom in million-dollar sports cards. The CEO of a fractional sports investing platform breaks down why digital collectibles are the ‘perfect intersection of passion and profits.’


3-part bitcoin strategy

Bitcoin generic images

Norwegian tycoon Kjell Inge Rokke recently joined a growing list of billionaires to embrace bitcoin. In a recent 23-page shareholder letter, Rokke lays out his three-fold bitcoin investing strategy. He specifically details why he sees bitcoin as a solution instead of a problem for its perceived challenges.

Read the full story here:

A Norwegian billionaire who just set up a $59 million unit to invest in the bitcoin ecosystem breaks down his 3-fold strategy – and shares why he believes the digital currency is actually a solution to many of its perceived challenges


How to find long-term compounders

Polen Capital small cap PMs

Tucker Walsh and Rayna Lesser Hannaway manage the Polen US Small Company Growth fund, which has returned 104% to investors over the past year. They unpack the “flywheel criteria” they use to identify so-called compounders, and also share three long-term small-cap stock picks set to surge as part of the reopening trade.

Read the full story here:

The portfolio managers of a small-cap growth fund that returned 104% to investors in the past year share 3 stocks that are set to surge as part of the reopening trade – and lay out how they identify long-term compounders


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider

Bitcoin’s path to $5 trillion, plus the market’s 20 most-shorted SPACs right now

Hello everyone! Welcome to this weekly roundup of Investing stories from deputy editor Joe Ciolli. Please subscribe here to get this newsletter in your inbox every week.

Bitcoin

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets, as well as what to expect in the coming weeks. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


Your weekly outlook

The past week in the stock market saw a few more flashes of the long-awaited rotation out of mega-cap tech stocks, and into beaten-down value names. On Monday the tech-heavy Nasdaq 100 bottomed out more than 10% below recent highs before saving some face later in the week. Many popular meme stocks were collateral damage.

But the Nasdaq may have an ace in the hole in the form of the $1,400 stimulus checks due to hit Americans’ bank accounts as soon as this weekend. A recent survey from Deutsche Bank found that half of all people between the ages of 25 and 34 plan to use the money to buy stocks.

Considering the recent tendency for retail investors to chase momentum in tech stocks and Reddit favorites, it could be game on for the Nasdaq – and let’s be honest, probably GameStop, which saw a spike of renewed buying this past week.


The path to a $5 trillion market cap for bitcoin

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Jake Ryan, the chief investment officer of crypto asset hedge fund Tradecraft Capital, explains how bitcoin could reach a market cap of $5 trillion by 2023 and $20 trillion by 2030. He also shares two emerging areas of the crypto-asset market that he’s bullish on.

Read the full story here:

The investing chief of a crypto hedge fund breaks down why he thinks bitcoin will achieve a $5 trillion market cap by 2023 – and shares 2 emerging areas of the asset class that he’s bullish on


The 20 most-shorted SPACs in the market

SPACs and hedge funds 2x1

SPACs have taken a beating in recent weeks amid a broad tech sell-off. It’s put renewed focus on which are out of favor with investors as cries of a bubble mount.

While some traders are capitalizing on the slump using arbitrage strategies, others are shorting outright. We obtained exclusive data on the market’s 20 most-shorted SPACs.

Read the full story here:

These are the 20 most-shorted SPACs in the market right now as skeptics wager billions against the ‘blank-check’ revolution


The ‘trade of the 2020s’

Rob Arnott

Rob Arnott, the founder of Research Affiliates, counts firms like PIMCO and Invesco as clients and helped create a groundbreaking investing strategy called smart beta. He thinks value stocks in emerging markets and the UK are very attractive right now, and says buying them together is the “trade of the 2020s.”

Read the full story here:

The world’s top investment firms pay Rob Arnott for advice. He shares 2 investing ideas that could go down as ‘the trade of the 2020s’ as the world bounces back from COVID-19


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider

3 reasons why the correction in tech stocks has further to run, according to Morgan Stanley’s top US equity strategist

Mike Wilson
  • The sell-off in technology stocks is likely not over, according to Mike Wilson, Morgan Stanley’s chief US equity strategist.
  • In a note on Sunday, Wilson highlighted that the bull market in stocks will continue with value and cyclicals leading the way rather than the technology sector.
  • But technology stocks will continue to lag for three key reasons, according to Wilson.
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The swift decline in technology stocks over the past month likely has further room to the downside, Mike Wilson, Morgan Stanley’s chief US equity strategist, said in a recent client note.

Since its peak on February 16, the Nasdaq 100 has declined by more than 10% even as a constant stream of good news hit investors. Vaccinations for COVID-19 continue to surge, daily COVID-19 cases have collapsed since the January peak, and Congress is on the verge of passing a $1.9 trillion stimulus package.

But with a full economic reopening within reach, coupled with a surge in interest rates, investors are rotating out of high growth tech stocks and into value and cyclical stocks that are poised to benefit from consumers finally being able to leave their homes and spend money following a year of rolling lockdowns. 

The recent trend of high-growth technology stocks underperforming its value peers will likely continue as Wilson sees more downside in the technology sector for these three reasons, according to the note.

1. “Markets lead the Fed, not the other way around.”

“The non-linear move in 10-year yields has awoken investors to a risk they thought was unlikely, if not impossible. The equity market now knows the 10-year yield is a ‘fake’ rate that either can’t or won’t be defended. To that end, the Fed did expand its balance sheet by $180 billion in February, 50% greater than its target. Yet, rates surged higher,” Wilson said. 

2. “The rotation might accelerate even further.”

“There will be a big shift in the top and bottom quintiles of 12-month price momentum by the end of this month. Most of the stocks going into the top quintile are value and cyclical stocks. Conversely, many of the stocks moving out of the top quintile are tech and other high-growth stocks.

Read more: Wedbush says to buy these 16 stocks that represent its analysts’ best ideas and are set to outperform in the next 6-12 months

“Part of the rotation from growth to value has been due to better relative fundamentals, as the economy recovers, and cheaper valuations. However, as these value stocks move into the top quintile of price momentum and growth stocks move out, the rotation might accelerate even further. This could be quite disruptive to portfolios and lead to another round of deleveraging like in January.”

3. “The Nasdaq 100 should test its 200-day moving average.”

“Based on the technical damage to date, the Nasdaq 100 appears to have completed a head and shoulders top and should test its 200-day moving average,” Wilson said. 

The 200-day moving average of the Nasdaq 100 currently sits at 11,635, representing potential downside of 10% from Friday’s close. 

A head-and-shoulders pattern is a bearish topping pattern that often signals a reversal following a bullish trend. The pattern takes its shape from a series of three tops, with the second top being the highest of the three. A neckline represents support and is formed by connecting the bottoms associated with the peaks. When the stock breaks below its neckline, a sell signal is triggered for traders.

qqq chart.JPG
Read the original article on Business Insider

How to find post-selloff opportunities, plus Cathie Wood on NFTs

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets, as well as what to expect in the coming weeks. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


Your weekly recap/outlook

This past week was one where the market just couldn’t make up its mind. US stocks surged on Monday after suffering their worst decline in months the prior week. Then inflation fears and spiking bond yields spooked investors anew as Fed Chair Jerome Powell failed to calm nerves.

The tides turned again on Friday as anxious dip-buyers quickly pulled tech stocks back out of correction following a monster jobs report that nearly doubled forecasts. Now it’s anyone’s guess where the market heads next week. 

The volatility is stemming at least partially from uncertainty around how signs of economic progress should be interpreted. On one hand, encouraging labor-market data should have investors excited about the prospect of increased consumer spending. But on the flip side, an economy that runs too hot risks runaway inflation – the sort of thing addressed by higher interest rates. And when rates rise, stocks lose luster. It’s quite the catch-22.

What made this past week so unique was how wildly sentiment swung from “bad news is good news” to “good news is good news,” often in the same day. Whichever camp investors decide on will largely dictate market action in the near term. And the main inputs for that will continue to be economic data, Fed comments, and stimulus progress. Stay tuned.


Strategies for dominating after a sell-off

NYSE Trader smile happy

The US stock market was whipsawed last week by fluctuating expectations for post-stimulus inflation. Tech stocks fell into correction territory and one point before rallying into the weekend. It was the type of environment that creates opportunities for well-prepared investors.

In response to the volatility, UBS detailed 3 ways investors can take advantage of the swings. Meanwhile, investment strategist Luke Lloyd of Strategic Wealth Partners shared the single sector and 4 specific stock picks poised to beat the market in the aftermath.

Read the full stories here:

UBS shares 3 ways investors can take advantage of market swings following the late-February selloff – and lays out 3 sectors that can benefit from higher growth and interest rates

An investment strategist shares the stock sector and 4 specific picks that offer the best chance to beat the market following the Treasury yield-driven sell-off in tech


Cathie Wood talks NFTs and bitcoin

Cathie Wood

Cathie Wood’s main fund has declined sharply since its record close on February 12 amid a broad tech sell-off. In a recent interview, Wood said she’d focus on high-conviction names during extended corrections. She also shared why she’s very excited about NFTs and her bullish thoughts on five top Ark Invest holdings.

Read the full story here:

Ark CEO Cathie Wood explains why she is ‘very excited’ about NFTs, the collectible tokens that are trading for millions online – and shares her latest thoughts on 5 top holdings, including bitcoin


Strategies from a 99th-percentile investor

MOh_Hi_Res

Michael Oh, manager of the Matthews Asia Innovators Fund, is up nearly 200% over the past 10 years, which puts him in the top 1% of his peer group. He broke down for Insider the four pillars of his investing strategy, and shared three stocks he likes over the next five to 10 years.

Read the full story here:

Michael Oh has beaten 99% of his peers over the last 10 years. He told us the 4 pillars of his investing strategy, and shared 3 stocks he thinks will see explosive growth over the next 5-10 years.


Stock pick central

Seeking experts who are willing to name names? Look no further:

Read the original article on Business Insider

The recent tech sell-off creates a ‘massive buying opportunity’ with another 30% jump for the sector possible in 2021, Wedbush says

happy trader
  • The recent decline in tech stocks has created a “massive buying opportunity” in the sector, according to Wedbush analyst Dan Ives.
  • Ives said he believes another 30% jump in tech names is possible in 2021.
  • The analyst argued that 30% to 40% of employees could eventually be permanently remote, adding fuel to the digital transformation.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The recent decline in tech stocks has created a “massive buying opportunity” as another 30% jump in the sector is possible over the next 12 to 18 months, according to analysts at Wedbush Securities.

In a note to clients late Thursday, Wedbush analyst Dan Ives said he believes the current tech stock sell-off has run too far.

“The momentum names in tech are down anywhere from 15% to 25%+ this week and in our opinion, this sell-off is way overdone given the $2 trillion of digital transformation spending on the horizon coupled by a massive M&A spree set for the next few years in the tech space,” Ives said.

This past week’s tech-stock weakness pushed a popular exchange-traded fund that tracks the Nasdaq 100 index below key support levels on Thursday. Popular tech names like Tesla and Microsoft led sector losses throughout the week, falling roughly 10% and 4% respectively.

Much of the decline was caused by a sell-off in government bonds that intensified over the week.

The yield on the 10-year US Treasury note, which acts as a benchmark for global borrowing rates, climbed to 1.54% on Thursday following Federal Reserve Chair Jerome Powell’s comments. This led to further rotation out of the highly valued tech sector into more cyclical stocks in the energy and financial sectors.

Wedbush’s Ives said he sees the tech sell-off as a “golden opportunity” and argues the “digital transformation across the enterprise and consumer world is just in its first few innings.”

While some analysts and investors have said tech stocks market leadership is fading, Ives believes the post-pandemic reopening won’t hurt tech companies to the extent that some might argue.

The analyst said his team spoke to CEOs around the world who told them that “30%-40% of employees could be remote in a semi-permanent structure.” Ives said this will “put further pressure on CIOs to rip the band-aid off and go aggressive on a cloud/digital transformation roadmap the next few years.”

Ives and company highlighted several tech names that they believe offer considerable upside in his note including Microsoft, Docusign, Salesforce, Zscaler, and Apple.

Despite recent tech weakness, Wedbush “believes tech stocks have another 30% upward move in the cards” in 2021 led by “FAANG, cloud, and cybersecurity names.”

Read the original article on Business Insider

A complete guide to Cathie Wood’s mind-blowing success, her firm’s investing strategies, and the stock picks she’s betting on for the future

Cathie Wood
Cathie Wood is the CEO and chief investment officer of ARK Invest, which runs three of the highest-returning stock ETFs of the last three years.

  • Cathie Wood has earned cult-like status on Wall Street due to her firm’s investing outperformance.
  • Her firm’s ETFs are attracting inflows that rival industry legends like Vanguard and BlackRock.
  • Insider is covering every angle of her career, investing strategies, and market outlook. 
  • Visit the Business section of Insider for more stories.

Cathie Wood emerged as the breakout star investor during one of the most chaotic years in Wall Street history. 

While her career dates back to 1981, 2020 was the year when her performance and fund inflows earned her a cult-like following in the industry. 

The $24.5 billion ARK Innovation ETF, her flagship exchange-traded fund, rose 150% last year, thanks partly to Tesla’s 730% gain. Her other funds that cover the fintech, genomic, and internet industries all landed on the list of the 10 best-performing ETFs of 2020. 

Retail and professional investors alike took notice of Wood’s performance: Last year, Ark’s family of ETFs grew at the fastest proportional growth rate of any ETF or mutual-fund manager in a Morningstar database that goes back to 2000.

Ark ETFs continue to command the industry’s attention in 2021 by attracting new investor money at a pace that rivals stalwarts like BlackRock’s iShares and Vanguard. Even her less-popular index funds are in the top 10% of flows year-to-date, according to Bloomberg data.  

Following Wood’s rapid rise over the past few years, there are questions about whether, and for how much longer, she can sustain her outperformance. The recent sell-off in high-growth stocks triggered a record one-day outflow of $465 million from her flagship innovation ETF. But in a sign of her staying power, investors poured a near-record $464 million back into the fund on the final trading day of February, Bloomberg data shows.

Insider will continue covering every angle of her cult-like status, from her ascendancy to the biggest investing bets she is making and the corners of the market she’s exploring next. 

Subscribe now to read Insider’s full coverage of Cathie Wood.  

Inside her meteoric rise: Cathie Wood made a career betting on the future. Insiders reveal how the ARK Invest founder won the funds (and hearts) of memelord traders and boomer investors alike.

Inside Ark Invest’s workplace, and what it’s like to work for Wood: Famed investor Cathie Wood has staffed her firm with analysts in their 20s and 30s as she looks to predict the future. 2 analysts break down what it’s like to work at Ark Invest.

Inside her stock-picking process: Cathie Wood’s firm built 3 of the world’s best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.

Why she was unfazed by the bond-induced sell-off in stocks: Cathie Wood breaks down why she was ‘very comfortable’ as the stock market got rocked by last week’s bond sell-off – and shares her outlook for what happens after the tech rout

Her views on the biggest market events of 2021 so far: Cathie Wood and her analysts discuss why Tesla’s $1.5 billion bitcoin purchase could trigger a wave of corporate investments, the fallout of the GameStop-AMC phenomenon, and their bullish views on the Chinese stock behind Clubhouse

Ark Invest’s 2021 outlook: Cathie Wood’s ARK Invest runs 5 active ETFs that more than doubled in 2020. She and her analysts share their 2021 outlooks on the economy, bitcoin, and Tesla.

The investment case for TeslaArk Invest, Tesla’s biggest bull, broke down its thesis on the electric-car maker ahead of its inclusion in the S&P 500

Her stock picks that crushed the market in 2020: We’re very surprised we didn’t underperform in the 4th quarter’: Cathie Wood and her analysts break down their stock-selection process and the top 10 picks that contributed to the outperformance of ARK ETFs in Q4 2020

Read the original article on Business Insider

The ‘most aggressive’ areas of the stock market could be set for more gains as spiking bond yields shuffle portfolios, a Wall Street chief strategist says

trader nyse floor yell shout aggressive
  • The reversal of a multi-year trend could have been accelerated this month as interest rates spiked higher, according to a note from Leuthold Group’s James Paulsen.
  • Investor fund flows have started to favor stocks over bonds, which hasn’t happened in years.
  • “When fund flows have shifted toward stocks, it has typically led to leadership from the market’s ‘most aggressive’ sectors,” Paulsen said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Rising interest rates sparked a volatile week of trading for the stock market, but it could also be accelerating the reversal of a multi-year trend that suggests more long-term upside ahead for stocks, according to Leuthold Group’s James Paulsen.

As interest rates rise, bond prices fall, which often sparks current fixed income investors to question whether they own too much of the asset class and not enough stocks, Paulsen said in a note on Thursday.

And there are likely a lot of investors asking that question right now, given that over the past decade, fund flows have overwhelmingly favored bonds over stocks. Even since the start of 2019, bonds have seen cumulative fund inflows of more than $1 trillion, while stocks have seen cumulative outflows of about $600 billion. 

And according to Fundstrat’s Tom Lee, 94% of retail fund flows have gone into bonds rather than stocks since 2008.

But more recently, this trend has reversed, with stocks seeing an uptick in inflows at the expense of bonds.

“This newfound trend of investment flows probably has a long way to go,” Paulsen said, and if so, the stock market should find strong support from the new money pouring into equities.

Sectors that have led the market higher during a sustained trend of fund flows into equities are the “most aggressive,” according to Paulsen.

If cumulative fund flows into stocks turn positive, “not only could the stock market continue to surprise to the upside,” but the most aggressive sectors might keep leading the market higher, Paulsen concluded. 

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Read the original article on Business Insider

The cult of Cathie Wood, plus SPAC-picking tips from a former CEO

Hello and welcome to Insider Investing. I’m Joe Ciolli, and I’m here to guide you through what’s been happening in markets, as well as what to expect in the coming weeks. Here’s what’s on the docket:

If you aren’t yet a subscriber to Insider Investing, you can sign up here.

Have thoughts on the newsletter? Just want to talk markets? Feel free to drop me a line at jciolli@insider.com or on Twitter @JoeCiolli.


Your weekly recap/outlook

The CEO of Robinhood, a hedge fund manager who lost 53% in January, a day-trader who made $48 million on GameStop, and Ken Griffin walk into a bar…

No, this is not the beginning of a bad finance joke. It’s the actual collection of individuals grilled by Congress on Thursday in a high-profile display of political theater the stock market has rarely experienced before.

Gabe Plotkin – the famed hedge funder who took home $846 million in 2020, then took a massive bath on his GameStop short last month – was asked with a straight face if he’s a registered broker. He was later asked if he thought short-selling constituted market manipulation, to which he replied “no” (presumably because it doesn’t). Nobody pronounced Vlad Tenev’s last name right for five straight hours. Keith Gill (known on YouTube as Roaring Kitty) was mostly ignored. It was nobody’s idea of a productive time.

But the sheer fact that the hearing happened at all shows that the Reddit-based day-trader community has everyone’s attention, and isn’t going anywhere. So what comes next? Despite his lack of air time on Thursday, Gill is still facing significant legal hurdles. Robinhood still has many questions to answer about its operations, its role in “inciting” reckless trading, and just how much money it has under management – not to mention that IPO it’s been planning. And only when first-quarter hedge filings start to trickle out will we get a full idea of who won and lost during the whole ordeal.

Outside of Reddit mania, the press for more stimulus continued. The timeline for Biden’s $1.9 trillion package is looking like mid-March now, and there’s still considerable haggling over what exactly will be included. On the economics front, debate is waging over inflation, and whether the sudden fiscal injection will cause prices to overheat. If that happens, it could mean bad news for the Reddit traders riding high on momentum stocks right now – and perhaps an opportunity for a short-seller redemption.


The cult of Cathie Wood

cathie wood ceo ark invest profile 2x1

Cathie Wood, the founder of ARK Invest, has amassed legions of obsessed followers. Wood has become a favorite of the Wall Street Bets crowd, and successfully kept control of her firm. Now, with assets accumulating and new funds coming out, the question is: can she sustain her success?

Read the full story here:

Cathie Wood made a career betting on the future. Insiders reveal how the ARK Invest founder won the funds (and hearts) of memelord traders and boomer investors alike.


Picking SPACs with the former CEO of Barings

Tom Finke

Tom Finke is the former CEO of the $345 billion asset manager Barings and a board member of Invesco. He and his partner recently raised $115 million via their SPAC Adara Acquisition Corp. (ADRA). Finke breaks down why he is jumping on the SPAC bandwagon and shares what to look for in SPACs.

Read the full story here:

Tom Finke recounts how he went from running a $345 billion money manager to joining in the SPAC boom as a sponsor – and shares 3 characteristics investors should look for in an ideal blank-check company


4 real-estate investing trends from a manager who’s returned 446% to clients over the past decade

brooklyn real estate better than manhattan green 2x1

Jeff Kolitch has returned 446% to investors via the $1.1 billion Baron Real Estate Fund since 2009. The 29-year veteran investor breaks down the four trends driving the real-estate market in 2021. He also shares 11 “attractively valued” real-estate stocks and their upside potential.

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A 29-year real-estate veteran who’s returned 446% to investors in the past decade breaks down the 4 trends driving the sector in 2021 – and shares 11 ‘attractively valued’ stocks


Stock pick central

Seeking experts who are willing to name names? Look no further:

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