To The Moon

My Investing Muse (10 Mar 2025)

Layoffs & Closure news

Hudson’s Bay, the Canadian department store chain founded in 1670, is preparing for a bankruptcy filing within days, people familiar with the matter said - WSJ

Big 4 fears layoffs with government consulting contracts under review. - Economic Times (India)

HPE to cut 2,500 employees as stock slides 19% on weak earnings outlook. Will HPE be able to ride out this storm? - CNBC

ALX Oncology, a Bay Area biotech firm currently running clinical trials for its anticancer therapy, announced Wednesday that it’s laying off about 30% of its staff. - SF Gate

Nearly 100 Companies Announce Layoffs In March, According To Reports - Forbes

February saw 46 companies lay off 15,994 employees. When compared to January, layoffs surged in February, resulting in a staggering 184% increase in the number of affected employees. - Indian Express

Microchip Technology to lay off 2,000 employees amid weak automotive demand - Business Times

The above are some snippets of news about layoffs and closures in the past week. There seems to be more of such news in recent weeks. Widespread retrenchment is one of the early signs of a market correction.

Is the S&P 500 market heading toward some storms?

This is a collective of relevant news from the last week about threats faced by the S&P 500.

From X user The Kobeissi Letter

The Nasdaq 100 has officially ended its streak of 497 trading days above its 200-day average, the second-longest streak in history. Yesterday, the Nasdaq 100 index closed below its 200-day moving average for the first time since March 12th, 2023. After the previous stretch of ~450 days finished in January 2022, the Nasdaq 100 lost -5.7% over the next 2 weeks and -22.0% over the next year. Every time the index has closed below its 200-day moving average after a long run and subsequently dropped over -3.5% within 2 weeks, a bear market followed, according to Sentimentrader. On the other hand, when the decline was less than -3.5 % within 2 weeks, the index saw positive returns over the next year. History suggests the next 2 weeks are key for the market. - The Kobeissi Letter

Note that the Atlanta Fed has projected a potential GDP downturn as per the following post:

From Atlanta Fed

On March 3, the #GDPNow model nowcast of real GDP growth in Q1 2025 is -2.8%: - Atlanta Fed

This is one of the most OVERVALUED markets in history: The S&P 500 is expensive on 19 out of 20 metrics, according to the BofA analysis. Metrics such as the Buffett Indicator (Market Cap to GDP ratio) are over 100% above historical averages- X user Global Markets Investor

From Isabelnet - Sentiment indicator where figures under 0 is considered negative sentiment https://www.isabelnet.com/sentiment-indicator-and-stock-positioning/#:~:text=The%20GS%20sentiment%20indicator%20has,in%20the%20current%20market%20climate.

The update from the GS sentiment indicator shows a cautious sentiment as per the 1st Mar 2025 update. Guess this was somewhat realized with the 3rd Mar 2025 red ending.

“I can’t tell you exactly when it’ll come; it’s like the heart attack (from too much debt),” Ray Dalio added. “You’re getting closer. My guess would be three years, give or take a year, something like that.” - Ray Dalio

Berkshire Hathaway unloaded its entire positions in the Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust — two low-cost exchange-traded funds the company had previously held for years. And that’s a move that may be spooking investors and causing them to question their own portfolios. Does the Oracle of Omaha see dark clouds gathering? - Yahoo Finance

I cannot speak on behalf of Berkshire. Typically, they hold their stocks so long they keep their moat. Can I submit for our consideration that the S&P500 may be losing their moat in the short or mid term?

My final thoughts

"Like Warren [Buffett], I had a considerable passion to get rich. Not because I wanted Ferraris – I wanted the independence. I desperately wanted it." - Charlie Munger via Benzinga post.

Should money be the only return of investment (ROI) coming to stocks and shares? In this season, the best returns for me are in the people, the learnings, and the ability to create value. Money cannot be the only return.

The market is showing signs of volatility. Let us consider some hedging. Let us spend within our means, invest with what we can afford to lose and do not leverage.

@TigerStars

$S&P 500(.SPX)$