Research

Not surprisingly, the question we have gotten most in the last few days is “how far through this sell-off are we?” The large banks are generally telling their institutional clients that the sell-off is more than half over based on the amount of hedge fund deleveraging they have seen in their prime brokerage businesses, implied volatility in the options market, and trading flows.

Costco (Ticker: COST) reported earnings last week, and the stock was down 6% on Friday, and is down over 10% from its mid-February highs.

Given the recent volatility of the market broadly and the Technology sector specifically, we have been asked about how to think about risky Technology stocks.

The volatility in Bitcoin this week had several investors asking us about its place in a portfolio. We are not cryptocurrency experts, but we do believe a position in Bitcoin is reasonable for long-term investors.

We have been recommending Healthcare as our top sector overweight. The sector was poor last year, but has been the best performing sector year-to-date, up 8.45% vs. the S&P 500, which is down 0.54%.