September 2018 - Introduction -

“Funding secured”, two very expensive words for Elon Musk, which has resulted in a 20 Million dollar fine and a 3-year ban on being the chairman of Tesla. It might be seen as relatively good news by many, because he can still stay on as CEO of the company. His reference to a stock price of 420 was supposedly linked to the code-term in cannabis culture for the consumption of weed.
Weed itself was also in the news this month, as it has properly replaced the cryptocurrency hype. A cannabis company called Tilray has reached a peak valuation of 25 billion dollars on 19 September, after it IPO`ed at 1.5 Billion just two months prior. Hence, I would like to award Tilray with the “Bubble of the month” award!
- Phillip Fisher -

While many parts of the world economy are struggling, with most stock markets not having seen an all-time high in months and sometimes years, the U.S. stock markets are moving in full force and continue to make all-time highs, despite the fact that the Federal Reserve is now in “tightening mode” and interest rates are rising. One can ask themselves; will the U.S. markets catch up to the downside, or will other stock markets catch up to the upside?

"The stock market is filled with individuals who know the price of everything, 
but the value of nothing." 
- Phillip Fisher - 

As you would probably expect, I fully believe that the U.S. will catch up with the rest of the world. Rising interest rates, exuberant consumer confidence, skyrocketing national debt, trade wars… the list of potential triggers for decline keeps on going.

Looking at the charts, the smart money flow index shows that “smart money” has stopped participating in the U.S. markets since the decline in January of this year, and hedgers now have a 65 Billion dollar short position against the major index futures. Almost matching the January levels, and close to all-time highs. More and more it seems to become a question of when, not if the U.S. markets will see a big decline.

Enjoy the ride, and don`t forget to stay positive after reading this newsletter, this too shall pass!

Robbert-John Sjollema

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The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in this publication is that of the publisher and is subject to change without notice. The information in this publication may become outdated and there is no obligation to update any such information.