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Strategies & Market Trends : The Art of Investing
PICK 54.43+1.0%Jan 9 4:00 PM EST
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To: Madharry who wrote (2990)12/8/2021 6:12:42 PM
From: Sun Tzu  Read Replies (1) of 10741
 
Several studies have shown that SPACs as a group have been a disaster. There are structural reasons why SPACs could be considered a scam. Jeremy Grantham talked about this in an interview that I recently linked to. The funny thing about that interview as a primary VC in Quantumscape, Grantham was already holding huge amounts of QS stock and he was telling people the valuations are crazy.

The majority of a bull run is *always* due to increase in money supply. Once that comes to an end, stocks tend to be valued based on near PE. If the E is nowhere near to be materialized and the valuation is not supported by strong assets, then the stock will fall. But the bull run can still continue in profitable and/or value stocks, until productivity + growth + money supply increase < real interest rates. At that time the metric changes to book value and the like. So it is prudent to reduce exposure to far side of risk.

PS My GTC buy orders for NTLA went through a couple of days ago at 90-something. So I am not saying to throw the baby with the bath water...but I am not trading these days. I'm not well enough to handle the work if the market tanks. So I remain 2/3 cash (from selling at the top).
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