The Guide: SIVB Fallout and What's Ahead |
| Written by Rob Goldman | |||||||||||||||||||||||||||||||
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In this week's The Goldman Guide we provide key insights and data on the market, what lies ahead, and the impact of the SIVB fallout on equities in the near term.  Download This Report in PDF
The Goldman Guide
INSIDE OUR 10 MIN PODCAST:
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When Bad News is GoodWell, that was ugly. The last two days of the trading were painful—especially for the Russell 2000 Index, which dropped 5.6% in just two days. I am sure you have read what happened, why, or how, and where some risks lie. I don’t want to re-hash these details for you. But I will provide high level info you can use today, tomorrow, and going forward, regarding interest rates and other issues. But don’t fret: Bad news is good news as you will see/hear ahead. Meanwhile, why the Feds had to step in and take over Silicon Valley Bank (NASDAQ: SIVB) offers some lessons rarely spoken: Policy and Business Model Failures. SIVB was a great business and appeared to operate in a clever, albeit entirely different model from traditional banks. In hindsight, the model was flawed. For that, founders and management are to blame. The model broke down in part because of federal economic and monetary policy. For that, the Biden Administration is to blame. More on that later. Suffice it to say others will take up the slack for the king of venture debt and bank to the VC world and startup nation. So, all will be all right at the end of the day. In the meantime, we’ve got more speed bumps ahead. Prepare for a lot of finger-pointing as to who is next to fall or at risk, and which loss-making companies are enduring capital access issues. Right now, you need to be in risk management mode, rather than in capital appreciation mode. That will come again soon enough. Inside we offer up ideas to get you through the potential lingering turmoil. Have a good day! The Market Today
Notable NumbersAAII Sentiment Survey (figures rounded)
I wouldn’t be surprised to see Bearish go to 50%
Random Thoughts… How long are we going to endure a double whammy of interest rate hikes and SIVB fallout---and CPI? Will a flight to quality or companies earning profit become accelerated? Do small stocks in biotech and tech have significant cash access risk? Why invest in financials right now? Considering the market’s YTD performances, is all the bad news a future positive? An Ugly Table…and Correction
SIVB FALLOUTThe Stock Market: Regional Banks, Others Public, Private Customers Lack Access to Cash Management Stories---Blame Biotech, Tech Firms Nationwide Pressure on Federal Government: Bailout? White Knights Relationship Disclosures When Bad News is Good News Thoughts on our ideas? Shoot me an email: [email protected]. 1498 Reisterstown Road, Suite 286 Baltimore Maryland 21208 Phone: 410.609.7100 The Goldman Guide: Background: Originally launched in May 2010, and re-introduced in January 2023 after a hiatus from 2016-2022, The Goldman Guide is a free weekly audio podcast and newsletter produced by Goldman Small Cap Research and is written by Founder Rob Goldman with contributions from the GSCR contributor team. This non-sponsored investment newsletter seeks to provide investors with market, economic, political and equity-specific insights via an action-oriented, straight to the point approach. 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