Price, perception and fundamentals
Or how to cherry-pick the best companies
The war of these Japanese candles is sometimes more intriguing than Star Wars. And now with everyone buying crypto, it’s a 24/7 play. Exhausting.
The Theory of Reflexivity says that fundamentals are affected by perception, which is affected by price. And price itself closes the cycle, as it’s set based on fundamentals. So what does it all mean? Well, sometimes it’s best to zoom out and see the pulse of the market before you invest in a company. You can easily do that with Google Trends and spot… well, trends. So let’s give this a try!
It’s clear that Amazon is on an upwards trend. Those spikes? It’s December. If you put money down and get some shares, it will probably grow in time.
On the contrary, for AirBnB the spikes are in the month of July, summer, vacation. It too is soaring, so if it ever goes public, it’s wise to buy and hold.
Apple is also taking advantage of a self-imposed cycle, which is the beginning of school. So the spikes are in September, when they launch new products. Their growth is not phenomenal though.
Electric vehicles are on the rise and so are payments.
Streaming has become mainstream, more so with the adoption of mobile.
And the future of work is definitely remote.
We can see what we felt all along, the demise of social media. I wouldn’t touch these shares with a ten foot pole.
Turns out Instagram shouldn’t have sold to Facebook. For some reason taking photos and sharing them online doesn’t feel like social media.
Ride hailing, the hype has passed. It’s time for consolidation and autonomy?
There are some clear winners in the eye of Mr. Market. By observing these trends you can determine how a company will grow and take action. Or take no action in regards to some of these guys.
I always enjoy to see how the end users feel about a product and it’s adoption on a global scale. Do you have any non-conventional ways to form an opinion about the companies you invest in? I’d love to hear about it.