Invest Smart: Shorting Nvidia Outside the Overvalued US Market

Invest Smart: Shorting Nvidia Outside the Overvalued US Market

Table of Contents

1. Introduction
2. Shorting Nvidia the Unpopular Way
3. Looking Outside the US Market
4. The Potential of Pharmaceutical Giants
5. Exploring Real Estate Investment Trusts (REITs)
6. Opportunities in the Oil Sector
7. Utilities for Steady Returns
8. The Agro-Food Industry
9. Return to Market Averages
10. Preparing for Potential Inflation

Shorting Nvidia the Unpopular Way 💡

In this video, I am going to propose an investment idea that goes against the market trend - intelligently shorting Nvidia. But before we dive deeper into this topic, make sure to subscribe to my YouTube Channel and share my videos on various social media platforms. Previously, I noticed that the SMP had the potential to reach 5100 points, which it achieved last week. Considering the stock buyback programs initiated by companies in the SP500, such as in the Healthcare, tech, discretionary consumption, defensive consumption, and energy sectors, I thought that the index could push further to 5200 or even 5400 points. However, the stock market teaches us that all glory is fleeting, even for high-flying stocks like Nvidia.

Nvidia's valuations may be justified based on its growth potential, with projected future growth of 34-35% over the next 5 to 10 years. Yet, at some point, the company will fall in line, just like Microsoft did in the 2000s and Apple is currently struggling with innovation. Despite Nvidia's exceptional recent performance, shorting the stock directly may not be the smartest move. Instead, let's shift our focus outside the overvalued US market and consider investing in undervalued stocks with good returns and strong fundamentals, or those expected to normalize gradually due to the adverse effects of COVID-19.

Looking Outside the US Market 🌍

When exploring potential investment opportunities, a few sectors catch my attention. One such sector is the pharmaceutical industry, particularly giants like Johnson & Johnson and Bristol Myers Squibb. For example, Bristol Myers Squibb presents a double bottom pattern in the weekly Chart, with a potential target at the 50-week moving average. I also recommend considering real estate investment trusts (REITs), which are sensitive to changes in interest rates. Income Triple NR and VC Properties are worth exploring as they have the potential to increase rental income and show growth in funds from operations (FFO) per share.

In the oil sector, companies like ExxonMobil, Total Energy, and others not only offer good returns but also engage in stock buybacks, providing shareholders with a quick return on investment. Moving to utilities, Nexera Energy and Hibberdola stand out. Hibberdola, in my opinion, is the best utilities company in Europe. Expanding the scope further, the agro-food industry offers opportunities as well. Companies like Danone, Coca-Cola, and PepsiCo Present attractive valuations with price-to-earnings ratios below their historical averages. Moreover, investing in these undervalued stocks allows you to receive dividends while waiting for the market to become more rational. In this watchlist, you can find dividend aristocrats and dividend kings such as Johnson & Johnson, Coca-Cola, and PepsiCo.

Return to Market Averages 📊

Throughout history, the stock market has always shown a tendency to return to the mean. The era of low-interest rates and quantitative easing is coming to an end, as central banks, including the Fed, prioritize battling inflation. In fact, inflation forecasts for the first quarter of 2024 have been revised upward. This indicates that the Fed may not reduce interest rates as extensively as the Consensus believes. Consequently, it is crucial to prepare your portfolio for a potential return of inflation and the likelihood of higher interest rates. This shift may lead to a sector rotation from growth to quality value stocks.

For this reason, it might be worth considering investments in energy companies, healthcare firms, and reliable REITs that are more responsive to interest rates and provide mid- to long-term protection. In summary, intelligently shorting Nvidia can be done by studying alternative investment options that offer undervalued stocks, solid dividends, and potential for portfolio resilience amidst changing market conditions.

📌 Highlights:

• Intelligently shorting Nvidia by exploring alternative investment options outside the overvalued US market.
• Pharmaceutical giants like Johnson & Johnson and Bristol Myers Squibb as potential investment targets.
• Real estate investment trusts (REITs) with attractive valuations and growth potential.
• Opportunities in the oil sector with companies like ExxonMobil and Total Energy.
• Utilities such as Nexera Energy and Hibberdola for steady returns.
• The agro-food industry with undervalued stocks like Danone, Coca-Cola, and PepsiCo.
• The importance of preparing for potential inflation and higher interest rates.
• Sector rotation from growth to quality value stocks.

📚 Resources:

• Johnson & Johnson
• Bristol Myers Squibb
• ExxonMobil
• Total Energy
• Nexera Energy
• Hibberdola
• Danone
• Coca-Cola
• PepsiCo

FAQ

Q: How can I intelligently short Nvidia without directly shorting the stock? A: By exploring alternative investment options outside the US market, you can find undervalued stocks with good returns, such as pharmaceutical giants, real estate investment trusts (REITs), and companies in the oil, utilities, and agro-food industries.

Q: Why should I focus on undervalued stocks? A: Undervalued stocks often provide solid dividends while you wait for the market to become more rational. Additionally, these stocks have the potential to show growth and generate returns when the market normalizes.

Q: What should I consider while preparing for potential inflation and higher interest rates? A: It is essential to diversify your portfolio and invest in sectors that are more responsive to interest rates, such as energy companies, healthcare firms, and select real estate investment trusts (REITs). This strategy can help protect against inflation and the impact of higher interest rates.