Can The Stock Market Predict The US Elections?

 This is an interesting piece of data. Since WWII, when the S&P500 fell in the three months leading up to the November vote during a presidential election year, the incumbent president or party of the outgoing president has lost the election 88% of the time. Similarly, when the S&P500 rises during that period, the incumbent or party of the outgoing president has won 82% of the time.

 

 

https://edition.cnn.com/2020/11/01/investing/stock-market-joe-biden-donald-trump-election/index.html

 

 



 

 

It is predicting a razor thin, Biden victory! The S&P500 fell 0.04% between July 31 and Oct 31.

 

Now the lock down in England has begun, while the Covid Virus death and infection rates are at a new high.

 

https://www.worldometers.info/coronavirus/

 



 

I will stick to “stay-at-home” stocks. I’m rubbing my hand with glee as many of the stocks that ran away after the April rally are now back below 50 days MA and nearly at 150 days MA.

 

 

  1. Alphabet. Fair value around USD1900. Current market price 1616. Around 15% upside. Entry level not optimal yet as above the MA.

 



 

  1. Amazon. Fair value around 3750. Current market price 3036. Around 17% upside.

Entry level definitely attractive now.



 

  1. Booking Holdings. Fair value around 1980. Now around 1623. Around 20% upside. Entry level definitely attractive.



 

  1. Facebook. Fair value around 360. Now around 263. Around 26% upside (gonna accumulate this a lot. I agree with you, Alvin. 😊 Thanks AK). Entry level attractive.



 

  1. Microsoft. Fair value around 240. Now 202.5. Around 15% upside. Entry level DEFINITELY very attractive as it is at 150 days MA.



 

  1. Tesla is attractive as it is below 50 days MA.

 



  1. Square. Entry level is attractive

 



 

 

The odds of making money when stocks are bought at a discount to fair value, and near moving averages are well documented. The greater the dip, the bigger the subsequent returns. It is when there is fear that you make the most. We can never find the exact bottom. But if we buy companies with strong fundamentals, that you know has a wide MOAT, win market share, maintain or increase margins, stay relevant in 10 to 20 years’ time, the stock price should go up.

 

Lastly, if you find my ideas useful, please support me by trading through my platform. We will help you monitor the exit points when the time comes. There are also plenty of investment ideas that I do not send out through general broadcasts! Thank you.

 

https://seekingalpha.com/article/4383836-s-and-p-500s-latest-slide-vs-rolling-1-year-returns

 


 


 

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