Christopher Schwarz

From Dust to Dust

The meme stock phenomenon started over two years ago now. One is gone (BBBY) and the next one is about to go – AMC. Here’s the five year chart.

The stock price is now at an all time low. Just imagine how much the “diamond hands” have lost on this stock by not asking the simplest question of all:

Is the movie theater business better today than in 2019? And the answer to that is a resounding no. Ways to watch movies have forever changed. So there was no reason for AMC’s stock price to be better than it was in 2019, regardless of any short interest or squeezes.

This chart shows you a lot of important things: 1) stock prices in the short-term can be irrational for a long time but 2) time is undefeated.

By Christopher Schwarz, ago

A Monetary Miracle

Everyone has been raving about the Japanese Stock Market this year. At first glance, it’s had a great year. Just one, small technical problem: You would have rather owned the S&P 500 this year. Why? The Yen.

Here’s a graph of the S&P 500, the Nikkei 225 in Yen, and the Nikkei 225 in dollar terms. Of course this is the actual value to compare to the S&P 500.

The Nikkei 225 is up almost 25% in Yen terms, but it’s only up 11% in dollar terms whereas the S&P 500 is up over 15%. The reason the Japanese market is doing so well is simply the Yen is down 11% this year.

Historically, there is no reason to invest internationally. If the US market is doing well, you don’t want to own international stocks. When the US crashes, others crash just as much.

By the way, is this a good time to mention the Nikkei 225 is 17% below it’s all time high …. set in 1989?

By Christopher Schwarz, ago