Everything you need to know this weekNov 29, 2021
We're bringing you all the news you need to know for this week. This report contains news on the crypto world, stock market & earnings news. We've highlighted the most important topics in each section!
We're skipping the IPO's for this week because it is the week after Thanksgiving and guess what? There are none.
While it is a quieter week, there certainly are some big things you need to watch for.
Crypto bear market continues down 20% the last two weeks:
The big news two weeks ago was that crypto tanked on the heels of the Infrastructure Bill being approved. If you want the details on what happened and what it means, just click here.
And now the big news last week is that crypto kept sliding. As of writing this (November 26th, 2021) Bitcoin slid all the way down to $54,000 - which is 20% lower than the high's ($68,000) earlier this month.
As we said last week and now we're saying this week, we're continuing to buy on any additional weakness. Not to sounds like a broken record with similar messaging from two weeks ago but this is by far the biggest news in the space and will continue to be until things reverse.
With crypto you're guaranteed two things. And that is:
- And a lot of fear and greed
The price goes up and it comes down. And as that happens people get scared they're losing money as it slides and get greedy that they're not making enough as it goes up.
Removing the emotion from the equation is much easier said than done, but you need to ignore the day to day or even month to month fluctuations. This has happened since the dawn on crypto and will ALWAYS happen.
We've said it before and now we're saying it again.
If you can't stomach the ups and down's that is perfectly okay, but that is what you're going to get with this type of investment.
So as we said last week and we'll say again this week, just keep calm and continue to buy/hold on.
Our goal for you is too ultimately be invested in cryptocurrencies for the long run, and starting with bitcoin is the safest way to do that.
If you want up to date news, trading information and access to our live chat, be sure to join our FREE discord channel where we give you all this and more.
Just join here -> Crypto Discord Channel
Most Important Companies Reporting Earnings This Week:
Salesforce (CRM), November 30th:
Salesforce is an interesting position right now. With the stock up 25% YTD and the Nasdaq up roughly the same, Salesforce seems to be tracking the index this year.
But when you look even further back it looks like Salesforce is actually trailing the Nasdaq with higher risk, which indicates a few things.
- The beta of Salesforce is 1.04. In order to avoid boring you to death, a stock's beta is a measure of how reactive to the index it is. So with a beta of 1.04, if the market moves up 1% Salesforce should move up 1.04% and vice versa. While the beta is relatively close to the index, it is very interesting that the performance of the stock is trailing the market even with a (small but) higher overall risk. This is a strong sell signal.
- The synergies from acquisition of Slack has not yet been realized. Similar to what we just said, we'll spare you the boring details of what synergies mean and give you a summary. Synergies is basically the expected upside of two companies after they merge. For example if Tesla and Boeing combined forces, you'd imagine the synergies would be an electric plane. This is because by combing each of their skills and resources they're able to produce something greater than doing it isolated. This is key here. This is why many companies merge in the first place. The thought is that 1+1 actually equals 3 but in reality this often ends up not being realized. Tying this all together, with the slack acquisition, the market still isn't believing that salesforce and slack are able to realize these apparent synergies together based off of why they merged in the first place!
Therefore, while we expect decent news from Salesforce, over the long term, we're selling the stock as we believe there are better opportunities out there. Salesforce will likely keep going up but for the level of risk, there are higher upside plays!
Snowflake (SNOW), December 1st:
Snowflake was one of the hottest stocks of 2020 & 2021. At one point, by valuation terms, Snowflake was actually THE MOST EXPENSIVE COMPANY EVER!
This was due to a huge run up in price IPO as the stock was running on hype. It was at this point, that we told everyone we were selling it as a crash was imminent.
So what happened? Exactly that.
The stock hit a high of $387 and then plummeted down to $200 over the course of 6 months. With a 50% drop, similar to Zoom, the company started rebounding!
And today the stock is trading at near $350, signaling a 75% recovery from it's low's.
So with so much and ups and down's over the last year, where do we stand on the stock?
We're actually avoiding the company right now!
Is the stock growing like crazy? 100%
Can the stock price keep going up? Without a doubt!
Will they report solid earnings this week? Most likely
But that still doesn't mean we like it or can support it.
Approaching a forward looking revenue stream of $1B, the current price of the stock still has it trading at over 100x revenue!
That is just a valuation we cannot get behind.
So while Snowflake is absolutely crushing it, and is growing nicely, the valuation right now just doesn't make sense.
And as we said with them last year as well as companies like Zoom last year, they're due for a crash at some point.
While NO ONE can call the top, we'd rather sell now before being left stuck with a company declining hard with no end in sight.
Okta (OKTA), November 23rd:
Last we wrote up Okta (see analysis here) we were extremely excited about their opportunity set going forward.
Identity & Access management will be as important as ever going forward and Okta has one of the best solutions out there!
Yes, the stock has slid down over the last year, but we still believe the company has upside opportunity going forward.
With earnings up this week, we're forecasting for Okta to beat top-line revenue estimates and deliver a strong outlook going forward.
It is tough to say whether or not this will be the catalyst needed to reverse course on the name, but we're expecting strong results either way.
Therefore we're continuing to hold the stock and are projecting for a beat!
Should they underperform or give poor guidance, we will analyze the outcome and report back to you all quickly!