📈 SigmaTrader Blog

When Others Are Fearful, Attack; When Others Are Euphoric, Defend Howard Marks, one of the most respected investors of our time, reminds us that the market is never purely black or white—it’s always grey. In his latest memo, he challenges the binary thinking of “Buy or Sell? Hold or Dump?” Instead, he emphasizes balancing your portfolio between offense and defense, depending on market sentiment. “When others are fearful → attack. When others are euphoric → defend.” This simple yet powerful principle lies at the core of contrarian investing. But how do you translate it into actionable steps? Marks introduces a framework that mirrors the military’s DEFCON system , which measures defense readiness from 5 (normal readiness) to 1 (nuclear attack imminent). In the investing world, he proposes INVESTCONs to guide us during periods of high valuations and widespread optimism: INVESTCON 6: Stop Buying INVESTCON 5: Reduce aggressive holdings and increase defensive holdings INVESTCON 4:...

The Great Divide: Storm Warnings vs. Endless Optimism In today’s markets, economists, investors, and money managers seem to be split into two very different camps. The First Camp: Warnings From the Old Guard Some of the most respected voices in finance – people like Warren Buffett , Jamie Dimon (CEO of JPMorgan, the world’s largest bank), and Ray Dalio (founder of Bridgewater, the biggest hedge fund) – keep warning that a storm is brewing. They point to: Rising U.S. debt and soaring yields on 30-year bonds in both the U.S. and Japan. Geopolitical instability across the world. A strong rally in gold paired with a weakening U.S. dollar . The fact that we might be at the peak of a very big economic cycle – and when such cycles turn, the pain can last for years. Their message is clear: be careful . The Second Camp: The New Optimists On the other side are younger traders, investors, and economists who believe that nothing truly bad can happen . And even if it does, ...

One of Charlie Munger’s favorite tricks for solving problems wasn’t something flashy or complicated. It was simple, almost childlike. He called it: “Invert, always invert.” But the story behind it goes back much further than Omaha boardrooms or Berkshire Hathaway meetings. From a Mathematician to an Investor In the 19th century, German mathematician Carl Gustav Jacob Jacobi often faced impossible problems. Instead of trying to wrestle them head-on, he flipped them around. If proving something directly was too hard, he asked himself: “What would make the opposite true?” Munger stumbled across this idea and immediately saw how powerful it was. If it worked in mathematics, why not in business, investing, or even life? He often quipped: “All I want to know is where I’m going to die, so I’ll never go there.” It sounds funny, but behind the humor is the essence of inversion: if you want to succeed, start by avoiding failure. A Dinner Conversation Imagine you’re at dinner with Charlie Mung...

In the high-stakes world of Wall Street, few stories are as dramatic—and educational—as the fall of Long-Term Capital Management (LTCM) . When Genius Failed by Roger Lowenstein is not just a finance book—it’s a powerful warning about arrogance, risk, and the illusion of control. Let’s break down what happened, who was involved, and what every investor can learn. 📚 Summary of "When Genius Failed" When Genius Failed chronicles the rise and catastrophic fall of Long-Term Capital Management (LTCM) , a hedge fund that dazzled Wall Street in the 1990s. LTCM was founded by some of the most brilliant financial minds: John Meriwether – Former vice chairman and head of bond trading at Salomon Brothers, known for pioneering arbitrage trading. Myron Scholes – Nobel Prize-winning economist, co-creator of the Black-Scholes option pricing model. Robert C. Merton – Nobel Prize-winning economist, specialized in risk and financial derivatives. Other partners included t...

Ferrari ( $RACE ), the legendary Italian automaker, has announced price increases on select models in response to the possibility of a 25% tariff on imported vehicles under President Donald Trump’s proposed trade policies. While some automakers might struggle to pass increased costs to customers, Ferrari’s ability to do so with minimal resistance is a testament to its formidable competitive moat. The Price Hike and Its Impact Starting April 1, Ferrari ( $RACE ) will raise prices by up to 10% on some models, potentially adding around $50,000 to the cost of a typical Ferrari. Unlike mass-market carmakers that rely on competitive pricing to maintain demand, Ferrari is in a unique position where its exclusivity allows it to dictate prices without significant pushback from its affluent customer base. The company’s CEO, Benedetto Vigna, reaffirmed Ferrari's commitment to keeping all production in Maranello, Italy, even as it prepares to launch its first all-electric vehicle next year. A ...

Vodafone Group Plc ($VOD), one of the world’s leading telecommunications companies, is currently trading at historically low levels. With its stock price beaten down more than 50% from its highs, is now the right time to start accumulating? Let's analyze its fundamentals and growth prospects to determine if it presents a compelling investment opportunity. A Brief Overview of Vodafone Vodafone is a multinational telecom giant headquartered in the UK, operating in over 20 countries and partnering with networks in 48 more. The company provides mobile, broadband, and digital services to hundreds of millions of customers worldwide. It has played a significant role in shaping the global telecom industry, pioneering advancements in 5G, IoT (Internet of Things), and enterprise solutions. Despite its strong global presence and innovation-driven approach, Vodafone’s stock has struggled in recent years due to competitive pressures, regulatory challenges, and macroeconomic headwinds. However,...

Estée Lauder Companies Inc. ( NYSE: $EL ), a global leader in prestige beauty, has recently attracted significant attention from both institutional investors and insiders. With its stock price sitting at a long-term support level and a 3% dividend yield, could this be a compelling opportunity for investors? Estée Lauder: A Premium Beauty Powerhouse Founded in 1946, Estée Lauder has built a reputation for luxury skincare, cosmetics, and fragrances. The company owns an impressive portfolio of brands, including: Estée Lauder – The flagship brand known for skincare and makeup. MAC Cosmetics – A top choice for professional makeup artists. Clinique – A dermatologist-developed skincare brand. La Mer – Ultra-premium skincare with a cult following. Jo Malone London – A leader in luxury fragrances. The Ordinary (via Deciem acquisition) – A disruptor in affordable skincare. These brands help Estée Lauder dominate the high-end beauty market, but competition is fierce. Competitors: The Beauty Battl...

The Coca-Cola Company ($KO), a staple of the stock market and a favorite of dividend investors, has seen a sharp decline of over 15% from its recent highs. Naturally, this raises the question: Is now the time to buy? Market Sentiment and Uncertainty As with any stock, predicting the absolute bottom is impossible. However, Coca-Cola’s recent decline is tied to a significant political development. After the presidential election, Robert F. Kennedy Jr., known for his controversial views on vaccines and advocacy for a healthier lifestyle, was announced as President Trump’s pick to head healthcare. This news created uncertainty for investors, leading to a sell-off as the market grappled with the potential implications for the beverage giant. Investors Have Digested the News While the initial reaction to the healthcare appointment hammered the stock price, the market seems to have largely digested this development. Coca-Cola is now trading near a key technical support level on the weekly ch...

RCI Hospitality Holdings Inc. ( $RICK ) has caught the eye of many investors recently, but is it a smart buy? Let’s break down the fundamentals, technicals, and potential growth opportunities to help you decide. What is RCI Hospitality Holdings? For those unfamiliar, RCI Hospitality Holdings, Inc. is in the business of live adult entertainment and themed dining experiences. The company operates through two main segments: Nightclubs (adult entertainment venues) and Bombshells (a chain of military-themed restaurants and bars). This unique combination makes RCI an unusual, yet intriguing, company for potential investors. Why Consider RCI Stock Now? RCI’s stock has recently shown signs of recovery after a significant downtrend. Technically, the stock has just broken out of its downward trend on high volume, suggesting renewed buying interest. It’s now pulling back with low volume, which could indicate a strong support level. This could be a promising entry point for buyers, and some invest...

 LVMH ($MC), the global luxury goods giant, has recently been hit hard, with its stock price taking another beating after its third-quarter results missed expectations. Growth forecasts have been adjusted downward, with JP Morgan lowering its target price from 720 EUR to 685 EUR. This has raised the question: Is this a great buying opportunity or just a case of catching a falling knife? Nobody can predict the perfect time to buy, but when a strong business like LVMH is down 35% from its all-time high and sitting around a support level, we see potential value for long-term investors. If the stock price continues to drop, it could present an even better opportunity to accumulate more shares in a high-quality company. For those unfamiliar, LVMH owns 75 luxury brands, including Louis Vuitton, Dior, Kenzo, Bulgari, and even Princess Yachts—brands synonymous with luxury and resilience. From a technical perspective, the 576 EUR level appears to be a solid support as the stock has bounced ...

PVH Corp, the parent company of iconic brands like Tommy Hilfiger, Calvin Klein, and Heritage Brands, is currently sitting at a strong support level. For technical analysis enthusiasts, this might be an intriguing opportunity to get in before the stock potentially makes its next move. The Technical Setup: Catching the exact bottom is never easy, but charts can sometimes "speak" to us, showing potential signals if we know how to listen. Currently, PVH is holding a key support level on both the weekly and daily charts. While there’s always the possibility that it could break below this level, this long-standing support suggests that the stock has strong backing here. If it does break to the downside, it may present an even better opportunity to accumulate shares at a lower price. But for now, the strength of the current support level makes this a potentially attractive entry point. The Fundamentals: Looking beyond the charts, PVH also has some appealing fundamentals: P/E Ratio...

Toyota ( $TM ) is currently at a technical support level after breaking a long-term downtrend and returning to retest that breakout.  For those familiar with market patterns, this is often referred to as the "return to the scene of the crime," a moment when the stock revisits a key level before deciding its next move. Key Metrics: Price-to-Earnings (P/E) Ratio: The stock is currently trading at a P/E ratio of 7.22, with a forward P/E of 7.74. These numbers suggest that the stock is relatively cheap compared to its earnings. You can check details here Price-to-Earnings Growth (PEG) Ratio: The PEG ratio is at 0.43, an extremely promising figure. A PEG below 1 often indicates that a stock may be undervalued considering its growth prospects. Dividend Yield: Toyota is paying a 2.73% dividend yield, making it attractive to income-focused investors in addition to those seeking capital appreciation. Price Target: With an analyst price target of $234, there’s an upside of more than 2...

Since July, oil prices have been on a steady decline, reaching a major support level. But just because it’s at a key level doesn’t mean it won’t break further to the downside. However, if oil reverses and breaks to the upside, we could see a significant rally—and with it, the potential for inflation to rise. The Recession Fears vs. Economic Optimism On one hand, many people are concerned about the possibility of the U.S. entering a recession, which could drag oil prices even lower. If the economy slows down, demand for oil will drop, likely pushing prices down further. On the other hand, there's 0.5% interest rate cut that could prevent a recession, especially since U.S. GDP has been in good shape based on the latest data. Another positive factor to consider is China’s recent economic stimulus. As the world’s second-largest economy, China’s stimulus could boost demand for commodities, potentially dragging the global market, including oil, upward. The stimulus has already influenced...

When it comes to investing, there are no crystal balls. Predicting the future performance of a stock is never easy, and Boeing ( $BA ) is no exception. Over the past few months, the aerospace giant has faced a string of bad news. So, does that mean it’s a sinking ship? Not necessarily. Fundamentals vs. Technicals From a fundamental perspective, Boeing doesn’t look too appealing right now. Key metrics like the company's price-to-earnings (P/E) ratio and operating margin suggest that Boeing is not in great financial shape. But stock performance isn't based solely on fundamentals—technical analysis can provide additional insight. Currently, Boeing’s stock is in a wedge pattern, a technical formation that often precedes a significant move in either direction. This means that while the stock could break below current levels, it could also break above, potentially triggering a big price movement. Too Big to Fail? If you believe that Boeing is "too big to fail," it might mak...

If you're on the lookout for an international stock that offers a solid combination of growth potential, high operating margins, and relatively low institutional ownership, Kaspi.kz JSC ADR ($KSPI) might be worth your attention. As an emerging name outside the U.S., Kaspi.kz is a Kazakhstan-based company that has been making waves with its strong financial metrics and attractive valuation. Who is Kaspi.kz JSC? Kaspi.kz is a diversified tech-driven company, primarily offering services through its mobile app. It operates in three major segments: Payments Platform – Facilitating financial transactions through digital services. Marketplace Platform – Providing a platform for online shopping and e-commerce. Fintech Platform – Offering financial solutions, such as loans and investments. Strong Financial Performance What sets Kaspi.kz apart from many other international stocks is its impressive financial performance. Here are some key highlights: Dividend Yield: Kaspi.kz pays a dividend...

Investors are constantly searching for opportunities that offer a balance of risk and reward. One stock that has caught the eye of many is Arcos Dorados Holdings, Inc. ( $ARCO ), the company responsible for operating and franchising McDonald’s restaurants across Latin America and the Caribbean. With the stock currently sitting on a crucial weekly technical support level, now could be a significant moment to evaluate its potential. Why Consider ARCO? 1. Attractive Valuation Arcos Dorados Holdings is trading at a price-to-earnings (P/E) ratio of 11, with a forward-looking P/E of 9.97. This relatively low valuation suggests that the stock may be undervalued, especially considering the company’s strong market position and brand power. A P/E ratio below 15 is often a sign of a potentially undervalued stock, making ARCO appealing for value investors. 2. Dividend Yield In addition to its attractive valuation, ARCO offers a dividend yield of 2.33%. While this isn’t the highest yield availabl...

Chinese ADRs (American Depositary Receipts) are seeing a strong upward movement in premarket trading today, capturing the attention of investors. This positive momentum is largely driven by significant developments surrounding two major Chinese companies: Alibaba and Bilibili . Alibaba’s Strategic Shift: Opening Doors to Mainland Investors Alibaba is making headlines with its latest strategic move to change its listing status on the Hong Kong Stock Exchange. According to a report from the South China Morning Post, this adjustment will make Alibaba's shares eligible for trading by the 220 million investors in mainland China through the Stock Connect program. The move is still pending approval, but if it goes through, it is expected to significantly boost Alibaba’s trading volume and liquidity. This would be a major step in fulfilling a long-standing goal of allowing domestic Chinese investors to share in the capital gains of one of the country’s most prominent tech giants. The imp...

The Chinese stock market has been navigating rough waters lately, with many investors wary of diving in. However, a recent wave of insider buying at Yum China Holdings Inc. ( $YUMC ) has caught the attention of market watchers. Key insiders, including Director Aiken Robert Blaine, General Manager of KFC Wang Warton, and Chief Executive Officer Wat Joey, have all begun to accumulate shares this month.(Check it here ) This activity is particularly noteworthy as insider buying is often interpreted as a strong signal that those closest to the company believe in its future potential. As the saying goes, insiders might sell stock for a variety of reasons, but they buy only for one: they believe the stock will appreciate in value. Is Yum China Holdings a Good Buy? For investors, the big question is whether $YUMC  is a stock worth considering. On the surface, several factors suggest it might be a solid addition to a portfolio: Dividend Yield : Yum China offers a dividend yield of 1.68%, pr...

Investing for retirement is one of the most important financial decisions you'll make in your life. As you look to the future, it’s essential to create a portfolio that not only grows over time but also weathers various economic conditions. In this post, I’ll share the strategy behind my all-weather investment pie, a carefully crafted portfolio designed for long-term growth, steady income, and peace of mind. The Foundation of the All-Weather Pie At the heart of this investment pie is diversification. We’ve included a balanced mix of stocks from major global sectors and countries, ensuring broad exposure to both developed and emerging markets. This means you’re not overly reliant on any single market or sector, reducing the overall risk in your portfolio. Additionally, a portion of the pie is allocated to gold, a time-tested hedge against inflation and market volatility. Gold’s stability often provides a safety net during economic downturns, making it a valuable component of a dive...

The LKQ Corp. is a leading distributor of vehicle products and parts used to repair, maintain, and accessorize automobiles. The company operates in the Consumer Cyclical sector, which often faces challenges during economic downturns.  Given the widespread anticipation of a recession in the U.S., it's possible this has contributed to the significant decline in LKQ's stock price. However, there has been notable insider buying since July, with key executives like the CEO and CFO purchasing over half a million dollars' worth of stock. This insider activity is often viewed as a positive signal. As renowned investor Peter Lynch famously said, "Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise." So, is LKQ a good stock to buy? While no one can predict the future with certainty, LKQ is a solid company, offering an attractive dividend yield of nearly 3% and potential upside of around 40%. Ultimately...