The Guide: SIVB Fallout and What's Ahead
|Written by Rob Goldman|
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.
The Goldman Guide
INSIDE OUR 10 MIN PODCAST:
INDICES & CATALYSTS
When Bad News is Good
Well, 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
AAII Sentiment Survey (figures rounded)
I wouldn’t be surprised to see Bearish go to 50%
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
The Stock Market: Regional Banks, Others
Public, Private Customers Lack Access to Cash
Biotech, Tech Firms Nationwide
Pressure on Federal Government: Bailout?
When Bad News is Good News
Thoughts on our ideas? Shoot me an email: [email protected]
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