To The Moon

Three things happened over the holidays: a further tightening of US monetary policy, Mr Musk's stake in Twitter and the introduction of rules for Chinese companies to list overseas. Let's talk about them one by one in order of impact.

1. Further tightening of US monetary policy:

The Fed could begin shrinking its balance sheet as early as May and at a more rapid pace, fed board dovish representative Lael Brainard said on Tuesday. She also said the pace of rate increases could be more substantial than the quarter-point increase.

The stock market immediately reversed gains, led lower by technology shares, with Nvidia plunging 5%.

Shrinking is the Fed's move to shrink its balance sheet and, like raising interest rates, is a means of tightening monetary policy.

Before this, the market knows to raise interest rates and shrink the table together, but do not know the specific implementation method. Tonight's Fed minutes or details of the tapering could help calm market sentiment, which is crucial.

Market is so scared also understandable, because brainard the speech expressed determination to curb inflation: https://www.federalreserve.gov/newsevents/speech/brainard20220405a.htm

The people most affected by inflation are not the rich. The rich hold assets and are the beneficiaries of inflation. So it's understandable why stock prices would fall if inflation were suppressed, because stocks are an asset.

The people who hold the least assets are the victims of inflation. And spending on necessities such as food, where inflation is highest, is twice as much for the poor as for the rich. The higher inflation, the worse for the poor. For the sake of the poor, the Fed needs to tame inflation as soon as possible, which is why Ms Brainard switched tack.

That makes sense if it's for people at the bottom, but it's a bit sad for markets. Whether it is shipping, foreign trade or employment, consumption has declined during this period. Without a consumer stimulus, inflation would naturally fall, albeit at a pace That Ms Brainard suspects is slow.

So what do we make of this correction?

Just today, Jimmy Cramer, the host of CNBC's "Mad Money," said run, stocks are due for a correction. 'If you have some speculative holdings, it's best to sell them at high levels,' he said. 'If it's value stocks, it's ok to hold them.'

I'm of the same opinion. If you have a recent sell put, like Tesla, Nvidia, Apple, etc., and don't want to buy it in the near future, roll further, like 2 months from now. If you have cash, you can sell and put on the dips.

But jpmorgan thinks differently. They may feel that tighter monetary policy combined with weak consumer demand is bound to hurt some stocks. Who is it? Apple $Apple (AAPL)$is both a technology stock and a consumer stock. Jpmorgan removed Apple from its analyst watch list.

2. Musk buys into Twitter

The SEC's 13G filing, posted on its website on April 4, shows that Musk has been buying into Twitter since March 14 and is gradually holding a 9.2% stake as a passive investor. Twitter jumped 25% on April 4.

After the purchase, Musk asked people to vote on Twitter for their opinions on Twitter. He used to sell stocks the same way, sell first and ask people for advice, but people still liked it. Although it may be fake, but the richest man is willing to be polite with you. It's so easy to be happy.

It is a pity that I did not notice this message when the market opened on April 4th, I guess there are friends like me. Tomb-sweeping Day gave myself a long trading holiday. So is Twitter still a buy at this point?

I think it's perfectly fine. It is only 9.2% at present, but given Musk's personality, it is likely to be more in the future and follow Musk to buy the whole thing.

There are three ways to buy stocks from a profit and loss perspective: buy stocks, sell put and call.

For those who don't have enough money, buying stocks or buying Call is a good way.

Bulk Order$TWTR 20220429 65.0 CALL$ has certain reference value, but the time loss attribute of the buy option suggests not to buy more, after all, just speculation.

If you're flush with cash, buying stocks and sell put $TWTR 20220520 40.0 PUT$ should be good, which can not only miss the stock boom, but also benefit from the time loss in this sideways period. Call and sell put also work.

I choose the stock +sell put. Pay attention to reasonable allocation of space.

3. Regulations on overseas listing of Chinese concept stocks were issued

This is a good thing. Although there are many details to be discussed, it is at least a first step towards peace talks. But did not catch up with the right time and place, monetary policy tightening us stock market callback, it is a pity that the positive did not do further fermentation.