To The Moon

Big-Tech’s Performance

Chip stocks are the super stars of this week, leading by $Advanced Micro Devices(AMD)$ $NVIDIA Corp(NVDA)$ , with many of the peers reached All time high $KLA-Tencor(KLAC)$ $Applied Materials(AMAT)$ $Lam Research(LRCX)$

Excellent economic data continues to spread optimism throughout the market

As of the close on January 25th, the best-performing major tech companies in the past week were $NVIDIA Corp(NVDA)$ +24.4% (top for 3 consecutive weeks), followed by $Meta Platforms, Inc.(META)$ +11.1%, $Alphabet(GOOG)$ +8.7%, $Microsoft(MSFT)$ +7.7%, $Amazon.com(AMZN)$ +3.8%, $Apple(AAPL)$ +0.9%, and $Tesla Motors(TSLA)$ -26.5% (bottom for 3 consecutive weeks).

Big-Tech’s Key Strategy

Meta, the new member of the Trillion club, will be in focus next week.

Can you be "greedy" with high stocks? NVIDIA can, and Meta Platforms (META) can too, as it hit new highs two years after experiencing the "great disaster" of iOS privacy policies.

Being mainly reliant on advertising revenue means it is very cyclical; but with a highly sticky user base and advanced algorithmic base, even if the advertising industry is not in a favorable cycle, it may benefit from a "flight to quality."

The stock price looks high, but is it "overvalued"? Although it is not growing as rapidly as the chip industry, looking at historical profit multiples, the dynamic PE has just exceeded the 5-year average, and the forward 12-month P/E has just touched the 5-year average level.

Optimistic expectations that could continue to support stock prices in 2024 include:

• AI based advertising recommendations in the main social media matrix

• Increased monetization of Reels

• Growth in market share for Instagram and Facebook shops;

• Expansion of the ecosystem around Llama LLM;

• Possible growth in VR business income and reduced losses

Special opportunities for the year

• U.S. elections (political advertising spending)

• Chinese e-commerce and gaming companies going global

Big-Tech Weekly Options Watch

NVDA led the gains for three weeks, with bullish sentiment driving up the concentration of uncovered Call options expiring next week to around 650, indicating an increase in the central tendency of Covered Calls as well.

TSLA experienced a sharp decline after its financial report, leading to an increase in the closing volume of near-the-money options. There are still a significant number of uncovered PUT options expiring next week at the previous 210 level, which are now deeply in-the-money and may be subject to passive exercise. It is worth noting that the volume of uncovered PUT options at around 150 has also increased. However, there is a large volume of uncovered Call options at 220 held by the bulls, making a short-term recovery almost impossible.

For Apple's options expiring next week, there is also a large position of 190-200 CALL options. It is noteworthy that there is a significantly large volume of uncovered PUT options at 125.

Big-Tech Portfolio

The "Magnificent Seven" form an investment portfolio ("TANMAMG" combination) with equal weight and quarterly rebalancing. Backtesting results since 2015 show a performance far exceeding the S&P 500, with a total return of 1536.48%, compared to 179.29% for SPY during the same period, setting a new high.

So far this year, NVDA and TSLA have moved in opposite directions, offsetting gains and losses, while the other tech giants have still outperformed the broader market, with a return of 3.45% compared to SPY's 2.68%.

Over the past year, the combination has had a Sharpe ratio of 3.5, while SPY's was 1.6