This week on The MarketBeat Podcast Kate’s guest is Michael Wang, founder of Prometheus Alternative Investments. Michael has done stints at Citigroup as well as hedge funds and understands the market from various perspectives. In this interview, he discusses why he believes institutional investors are positioned bearishly at this time, and how individuals should approach their portfolios as the summer rally seems to have fizzled.
Topics in today’s interview include:
-Why Michael says “Do not conflate the market today with the economy today”
-Why the summer rally was due to better-than-expected Q2 earnings, as well as lower commodity prices, despite high inflation numbers
-Why tech stocks, along with other growth names, are sensitive to interest rates, affecting their share prices today
-Is the growth rally fizzling out, as the market goes through another bout of selling?
-Was the summer uptrend just a bear market rally? It looks that way.
-Will the market continue to hold above its mid-June lows?
-In which sectors does Michael see potential right now? Does he see continued interest in so-called FANG names?
-Why does Michael see strength in the semiconductor space, despite poor earnings or guidance?
-How retailers like Target are pulling forward bad news, whereas pandemic darlings like Peloton pulled forward good news, Peloton and others made the mistake of thinking a pandemic-era boost in sales would be permanent
-Investors know the economy is challenging, but they are managing their expectations about earnings reports for that reason
-How 2009 and 2020 were good examples of why you shouldn’t conflate the market with the economy. Markets price in economic recoveries before they happen
-Why institutional investors closely follow the Fed and how it affects their investment style, even down to one word that Fed Chair Powell may add or omit
-What are the best practices of the pros, that retail investors can follow?
-Why Michael says it’s important to do your own homework when choosing investments, and why you can’t be certain exactly what the pros are doing, despite what they say.
-Why it’s important to be cautious about chasing meme stocks
-What risk/reward calculation should investors use as part of their process?
-How can investors with busy lives and a full-time job manage their investments, as research can be time-consuming?
-Why Michael believes it’s important to learn from the pros
-Why retail investors have the advantage when it comes to time horizon and time arbitrage
-Easy tips for holding stocks and avoid buying at the top and selling at the bottom
How to reach Michael
Find Michael at www.prometheusalts.com
Michael’s special offer for MarketBeat listeners to access the Prometheus platform:
https://app.prometheusalts.com/invite-code
Enter code: BIRD for access
Stocks and ETFs mentioned in this episode:
ARK Innovation ETF (ARKK)
Nvidia: (NVDA)
Target: (TGT)
Zoom Video Communications: (ZM)
Peloton: (PTON)
SPDR S&P 500 ETF Trust: (SPY)
Invesco QQQ Trust (QQQ)
iShares Russell 2000 ETF: (IWM)
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