A thanksgiving not exactly calm, that of 2021, ruined by a really black Friday on the financial markets.
Omicron, the name of the new variant, is frightening.
We know that markets are driven by two main feelings, fear and euphoria. And it is my, our job, as traders, to stay away from both of these feelings, which do nothing but make us lose money and do the exact opposite of what should be done.
Those who know me know that I am absolutely a realistic person, I try to analyze the situation, without ever panicking at the moment, so I brilliantly overcome the coronavirus crisis, buying when everyone was selling and enduring even important drawdowns, only to be repaid.
Now, I’m certainly not saying that we are dealing with another V shape from -30% as in 2020, also because, those who have a bit of intelligence know that, given that we are talking about viruses, we will always have in front of us. of mutations, is its nature.
We must accept that we will have to live with it, using the weapons that science provides us.
Consequently, next week, considering that while I am writing to you news continues to arrive on the appearance of the variant in every European state, it is very likely that fear will continue to prevail, causing further declines, which by the way, as I have been writing for a while of time, they would be healthy.
All right but, when to buy?
And above all what?
The crux of the matter is the tightness of the vaccines to the Omicron variant.
If, as has happened with the variants that have appeared so far, the protection is solid, then we could see a correction that could not go beyond 10-15% creating buying opportunities for a short Christmas rally.
If, on the other hand, vaccines should prove ineffective, rest assured that volatility will rise and the correction will be more marked.
Never as in these moments, you have to be calm and wait for the news.
As for the markets, I believe we will see a sudden rotation in tech stocks, digital payments, and video games. As well as obviously social networks and e-commerce.
Beware of pharmaceuticals, because they are already very inflated, except perhaps Moderna, which has just returned from an important pull-bak, and Novavax which is in the pipeline with a new vaccine.
Those who follow me know that I am already positioned on companies such as Activision, Visa, Square, Amazon and Facebook (Meta). Accumulations could arrive on these stocks if they suffer a decline caused by a general sell-off.
If we talk about accumulation for the long term, it is precisely the companies that work in tourism and which are related to oil, those that could suffer the greatest discounts and consequently the best purchasing opportunities. I’m talking about Airbnb, a company I strongly believe in, where I have an excellent average purchase price, and I will certainly buy more shares. Attention also to airlines such as Delta and American Airlines and obviously attention to ETCs on oil because a significant drop would create further buying opportunities on a commodity that has given me (and I hope you too) 100% earnings in 2021.
Possible increases in gold in the medium to long term, both from seasonality and obviously as a safe haven asset, even if during the first appearance of the covid, this was not exactly the case.
The resilience of cryptocurrencies should also be verified. Absent extremely volatile, absolutely not to be considered a safe-haven asset, has the undoubted advantage of being decorrelated from the numerous problems that can afflict traditional financial markets. There may also be a quick rotation here which could cause significant rises.
I greet you and I wish you a happy Sunday, quoting Warren Buffett because it is the wise men that we must look at in moments of emotion: “Be greedy when others are afraid and be afraid when others are greedy”
Happy trading and stay safe.
DISCLAIMER: I am not a financial advisor nor a CPA. These posts, videos, and any other contents are for educational and entertainment purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.