- The world is still being mostly locked down by Corona Virus, mainly by its upgraded version, Delta. However, it is transitioning to the endemic of living with Covid-19 with vaccination.
In most developed & emerging countries, the vaccination rate is over 50% (Pfizer, Moderna & Sinovac being the most common vaccines). - By year end, those countries have opened up to travels although the progress is stalled by another Covid version, Omicron.
Omicron emerges in end-Nov and started spreading fast in Dec. So far, it seems to spread more easily but doesn’t cause more severe illness.
- For stock market, it is a tale of two worlds.
One world is represented by US and the other by China.
S&P rocketed by over 20% while HSE plunged by over 10%.
Although the GDP growth, not much different at 4-7%.
The Insane World of the US Market
😉It’s a free jungle world, filled by games with limited or NO rules (imagine playing soccer without referees).
Below snapshot from Novelinvestor blog captures the insanity really well:
In 2021-H1, number of companies trading at over 15x sales hit record high of 600.
Since 2000, the highest it ever hit was about 500 during the dotcom bubble.
Half of the 600 stocks trade at over a $1 billion market cap, 80% of these companies have no earnings, 64% are projected to have no earnings over the next 12 months, and the group carries a median Price/Sales multiple of 36. The companies that do have earnings carry a median P/E of 83.
🤷♀️🤷♂️The daily Option trading reached record volumes, doubled the average of previous 10 years.
Bitcoin & its ever increasing variants are rampaging & hitting record highs while its real-world usage is still miserably low.
OTOH, “super growth” meme stocks like Zoom, Peloton, Teladoc, Zillow, Nikola, StoneCo, Robinhood etc are down by 50-80% from their high.
In short, the speculation is rampaging and gambling in US stock market & Bitcoins seems to be the common pass time.
The Control World of the China Market
China market regulations tightening up controls by implementing drastic measures such as:
👼Banned all edu-tech companies from charging customers for student based education (basically turning them to non-profit co).
👮♀️👮♂️Crackdown on big tech companies from abusing their power such as preventing suppliers to sell in other platforms and other monopolistic approaches.
Alibaba, Tencent, Meituan, Didi have been targeted and fined, with Alibaba seems to be the most heavily targeted. Their share prices are mostly down by over 50% from their high.
🙆♂️🙆♀️Common Prosperity is introduced and companies are “encouraged” to contribute to it.
🙅♀️🙅♂️Bitcoins and its variants are entirely banned in China, while they push forward their Digital currency, eRMB.
To conclude, I’d let Warren has the last words:
The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.
In this case, I hope it is obvious which world is less prudence.
The dark force Bitcoin almost doubled to $49K, its capitalisation reached over $2T, reckon more madness is coming.
Tesla bought $1.5B worth of Bitcoin, Tesla market cap reached $1T during the year, Elon Musk became the richest man.
Tesla is leading the premium EV market, its sales is strong and growing, however to me, its valuation is sky-high.
Pent up demand of goods and commodities mess up the supply chain.
Causing the over-crowded ports with ships queuing and container rate sky high.
Prices of commodities like lumbers, coals, palm oils etc reached sky-high level unseen in years.
Inflation especially in developed countries like US, Europe, UK were persistently high at 4-7% (milder in developing countries).
Although things may still get worsen as Omicron rampaging through & insane market bubble bursting.
I am actually looking forward to the years ahead with curious optimism.🤸♀️🤸♂️
Things may well break and gone haywire in another year or two, but in long run, I believe we would move forward gradually and steadily. 🦸♂️🦸♀️
Fall.Cushion_
Fall.Cushion_ 