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Third Quarter Re-Write 2024

  • Writer: Christopher Lakian
    Christopher Lakian
  • Jul 31, 2024
  • 2 min read

July was a rollercoaster that thankfully ended on a high note.

 

A massive unwinding occurred out of the leaderboard (technology stocks, semiconductors), and investors poured money into value ideas such as homebuilders, banks, insurance, oil & gas, etc.

 

Most people must realize that 90% of all progress in 2024 was due to the AI chip craze and the magnificent seven, (defined below).

 

2024 has been one of the most noticeable divergences between the leaders and laggards since college (24 years ago).

 

I'll explain why this matters but first some stats,

 

 

the ratio of correlation between the Nasdaq composite 100 to Russell 2000, is the widest since my days at Villanova university.

 

Back then we had a massive unwinding of internet stocks in American history; AOL, Broadcom, Yahoo, and all the internet stocks of the roaring 1990s turned into dust over four years—a 33% loss from 2000 through 2004. (in just the Nasdaq 100 index alone)

 

You may need to remember that from 2000-2004, the Russell 2000 made money simultaneously—a 29% increase of 7.25% per annum.

 

I know these statistics because I was investing with my family through Scottrade until my first job on Wall Street at Laidlaw in Manhattan in late 2003.

 

 

Back to 2024:

 

Today, the Magnificent seven (Amazon, Google, Microsoft, Apple, Tesla, Meta, Nvidia) have more shareholders than the stock markets of the following countries: Japan, Europe, and the UK combined!  

 

Sixteen trillion dollars from the Magnificent Seven could unwind at some point! Where would that money go?

 

If history is a guide, the Russell 2000 may be the place to invest.

 

The best returns for 2025 and beyond may come from a relatively unknown solution to most investors.

 

Chris

 

 

Christopher R Lakian

Owner, Portfolio Manager, AIF

 

Magnetic North Financial

1156 Bowman Road Suite 200

Mt Pleasant SC 29464

Main Number: 843-212-4023

Cell: 843-737-6060

Global Relay Secure Text: 843-428-7827

 

 

OneSeven ("OneSeven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Magnetic North Financial represent the individual's role with Magnetic North Financial, and not their role with OneSeven. Services are provided under the name Magnetic North Financial, a DBA of OneSeven.

 

 
 
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OneSeven ("OneSeven") is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). Registration with the SEC does not imply a certain level of skill or training. All titles listed for individuals associated with Magnetic North Financial represent the individual's role with Magnetic North Financial, and not their role with OneSeven. Services are provided under the name Magnetic North Financial, a DBA of OneSeven.

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