If we completely ignore the news, the graph of QQQ seems to be recovering quite nicely. For a technical trader it's extremely optimistic. Then, if you look at any sort of news, this trading at Jan 2020 levels seems absolutely insane. Both sides have good cases, but I am going to choose to ignore each of them. The indexes are beyond unpredictable right now (see GDP -4.8%, IXIC +3%) that my options trading is pivoting towards almost exclusively to singular companies - as opposed to my typical index/ETF trades. I hate to sit on the fence here, but anyone who says they know where this is going is ignoring half the data on either side. Good luck to all!
Why is this insane? QQQ is comprised of stocks that are mostly recession/corona proof. Most investors view the coronavirus as largely a hoax that was overhyped by a CCP-controlled mainstream American media that wants nothing more than to see Orange Man Bad locked up in prison. On top of that, the coronavirus hasn't really hurt tech companies. I work for a techISH company called Drizly, we sell alcohol online, and our revenue is up 300% for example!!! To be honest, the more socially isolated people become, the better it is for Big Tech and e-commerce and thus QQQ. The world is headed for a Ready Player One society. Watch that movie, look at the types of companies that would thrive in a world like that and start buying them and hold on to them until you're ready to retire. QQQ is a hold for 30 years ETF. Personally, I prefer TQQQ. I've been in TQQQ for 10 years and let's just say the returns have been rather ridiculous. It swings violently but over the long haul, it has performed significantly better than QQQ. You really can't go wrong with QQQ as it's the perfect ETF built to withstand recessions. Technically....you're not supposed to HODL 3x leverage ETFS for more than a week but I have and it's work out well for me. I think it will continue to work well. I think QQQ should be at $250 right now.
blakeparr
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@gata9aigata9ai, Good info! Maybe tech will pull through. I'm leaning towards a correction in the near future though. Here's why: companies need consumers to buy products. Currently, there's no consumer confidence, and the unemployment will definitely not help with consumer spending. Lower GDP = Lower Spending = Lower EPS = Lower shares. That's how I see it at least. You make a good point though.
gata9aigata9ai
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@blakeparr, @blakeparr, The FAANG prices seem about right to me. Personally I think they are still way undervalued.
Internet usage and the capacity needed as everyone works from home, streams video, plays games, and browses social media is exploding. I think this trend will only increase as the WFH model is proven to work and smaller tech companies decide to ditch their 100k / month rent on fancy offices when they realize they can save millions by having a smaller office with majority WFH.
Amazon has hired 175,000 new employees in the last 6-8 weeks ( although not sure how many of these are temps ) and their user base is definitely expanding. They have also given raises to many employees as well.
⁃Micron earnings cited strong data center.
⁃Intel earnings very strong data center.
⁃Nvidia investor day cited very strong data center
⁃Internet usage at Shopify and Target noted hitting black Friday and cyber Monday level traffic every day of the week.
⁃telcoms such as Verizon have seen noted similar spikes in streaming, gaming, and online usage
⁃gaming sales just reported best month in 12 years.
I mean what has fundamentally changed for Big Tech? I feel like social isolation works to Big Tech’s benefit. And where do you think the 30 million unemployed are going to look for work? Uber, DoorDash, Amazon, Lyft, GrubHub, InstaCart would be my best guess. And where will they be spending all their time? At home on Facebook, Instagram, playing Nintendo, watching Netflix etc...ordering stuff from Amazon, alcohol from Drizly and BevMo and weed from WeedMaps 🤣 I mean have you seen the governments unemployment bailout? It’s extremely generous. Many folks will be making more from unemployment than they would from their day job. Hence, we can expect a lot of people will want to stay unemployed in Netflix-mode for as long as possible. Just my thoughts
blakeparr
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@gata9aigata9ai, I 100% see what youre saying. One thing that you arent taking into account is that as companies open up, the very things you mentioned will drop very quickly in revenue, and the remaining products will remain extremely mediocre with the lack of consumer spending. I do think that a couple companies will definitely surpass QQQ by quite a bit, but the index as a whole (regardless of how heavily weighted the blue chippers are) is not held up by much more than simple speculations
Reiterating: I see what you're saying completely, and I think youre right to an extent, but I, like everyone else, dont know how many smaller companies will go to zero. If your balance sheet cant sustain 1 month of salary without revenue, then it was not a successful company to begin with. Like you, that is just my thoughts on the matter. I think in this case everyone is a little right and a little wrong. I just dont see GDP shrinking and consumer spending going up. That last sentence pretty much sums up my reasoning for the current outlook.
I'm loving these comments though. Everyone is providing great reasoning for why they think something as opposed to attacking my opinion or agreeing without reason. Thanks yall