Good companies like the US tech giants stay good for a long time, stringing together decades of growth. But their shares are all over the place. I increasingly realise this is because of macro factors out of their control, black swan events triggering global stock market sell-offs.
This leads to a conclusion that I have come to before. Every stock market sell-off has a reason and is a buying opportunity for shares in quality, high-growth companies, the ones I call 3G (great growth, great story, great chart).
We can see this by looking at the recent past. The latest 2025 sell-off was triggered by Trump and his trade war. The one before that in 2022 was triggered by soaring inflation and a spike in interest rates, especially at the long end (10 and 15-year bonds). The one before that in 2020 was triggered by COVID, which might have been as devastating as the Black Death for all anyone knew when it started. As you can see from the chart below, it is not easy to make Coppock go negative. It has done so only 10 times since 1974, roughly once every five years.
It is these major sell-offs which pull shares in great companies sharply lower and offer major buying opportunities across the board. I don’t think the tariff one is a big one, remotely on the scale of earlier sell-offs. Trump is rattling the cages, but he is a stock market-friendly president who feels validated by rising share prices.
He is also a lucky president because in the background is an accelerating global technology boom whose epicentre is the West Coast of the USA. It is a dream scenario for America, which is not to under-rate the ability of the Chinese and the Indians, whose nations are full of naturally gifted mathematicians.
The Americans have a culture of freedom and a delight in success (the log cabin to the White House), which creates incredible vibrancy in the US entrepreneurial scene. In Napoleon’s army, every soldier carried a field marshal’s baton in his backpack, which made his army almost invincible until he lost (unfortunately in my view) to Wellington at Waterloo in an encounter described by the Iron Duke as a ‘damned close thing’. In America, every waitress is a budding movie star and every bellboy is a would-be billionaire. The culture of success is like nowhere else in the world.
I have been brought up to believe in Free Trade as almost the guiding principle of making the world a richer and better place. Persuaded by one of my subscribers, I am reading a book by a man called Robert Lighthizer, who was the United States Trade Representative in the first Trump administration. The book is called ‘No Trade is Free’, is well-written, and as far as I have got, it is arguing that the benefit of cheaper goods for consumers is too narrow a case for Free Trade. We need to look at the impact on producers, especially American workers, and we also need to make sure that free trade is fair trade and not implemented in ways that allow countries like Japan and China to game the system most outrageously.
I shall keep reading, but already I can see why the Liberal elite of whom I am a part are unhappy about Protection because Free Trade works well for them. Making imports cheaper is like a pay rise for us, not so great for the blue-collar workers losing their jobs. It is similar to elite Americans being happy to see illegal Mexican immigrants pouring into America because that is how they staff their houses, and the newcomers never threaten their jobs.
David Attenborough is happy to save the world because the truth is green policies are an unmitigated good for him and his furry friends, but less obviously so for many humbler individuals. It is Trump, not Keir Starmer, and certainly not Ed Miliband, who is fighting the fight for workers’ rights and winning votes accordingly.
We may need to view Farage in the same light. The elite, as in people who work for the BBC, staff many universities, live in Islington, Hampstead and the Home Counties, and dominate the House of Commons across all parties, don’t give a toss for workers. What matters to them is the right of adolescents to decide what sex they are, the need to bend over backwards to help other countries do well and resist the American hegemony and wring hands and apologise for the supposed awfulness of the British Empire, a feeling often not shared by the indigenous inhabitants of that Empire, whose experience of local governments has not been encouraging.
Hating Israel and loving Hamas is a proxy for hating America. Well, I hate Hamas and I love America. If they are not the good guys who the hell is, certainly not the Russians, the Chinese, the Iranians, the Venezuelans, the North Koreans, Hamas, Hezbollah, the Houthis and others of that ilk (I am talking governments here; I have never met an Iranian I didn’t like and Russian girls are to die for).
The bottom line about the arguments over Trade and Tariffs is that many factors need to be taken into account, and if you put the impact on workers at the top of the list rather than more trade and lower prices, you may reach different conclusions.
This also suggests that more aggressive trade policies, especially if they do change behaviour at great exporting nations and closet protectionists like China and Japan, may not do much, if any harm to the stock market, especially when companies like Nvidia and Palantir are implementing technologies that could have a transformative effect on manufacturing.
If the marginal cost of manufacture approaches zero, shipping costs become more important, and it makes sense to locate factories as close as possible to their markets. Tesla is doing this with its gigafactories in America, China and Germany. The bottom line is that maybe there is method in Trump’s madness.
Ever since Michael Saylor changed direction so dramatically in 2020 (making Microstrategy a vehicle for promoting, holding and generating wealth from Bitcoin – a dramatic something new), the shares have been volatile, exciting and rewarding as an investment. This, and its subsequent incredibly aggressive purchases of Bitcoin, have only been possible because this guy dominates the company, the ultimate Alpha Male Gorilla.
Microstrategy holds 555,450 Bitcoin. I would guess that he intends Microstrategy to hold 1m Bitcoin one day, approaching five per cent of the ultimate number of Bitcoin that can exist. If Bitcoin goes where Saylor thinks it is going, that will make Saylor almost a god. Imagine holding 1m Bitcoin with each Bitcoin worth $1m. A million million is $1 trillion. That would be one of the greatest winning bets in history.
Before this whole thing started, Microstrategy or Strategy as it calls itself, was valued at some $3bn. If the bet comes off, it could be valued at $2 trillion. If there is a share out there that can rival Palantir for excitement, it is Microstrategy.
These weekly Coppock charts are growing on me. Look how well the buy signals have worked for Nvidia. We can even see moments when there is a clustering of buy signals. We must not forget that Nvidia shares are in a strong secular uptrend, so any buying strategy is likely to look good.
There is nothing in either fundamentals or the chart to suggest that the secular uptrend has ended, and we have the beginnings of a new buy signal. Buying on a blue smiley has worked for 10 years; buying on a double blue smiley has worked even better.
I am listening to Stella Parton, Dolly’s sister, singing a song she wrote called ‘I want to hold you in my dreams tonight’. Magic! It makes me as high as a kite listening to this music. I have 7,934 songs on Spotify, which becomes 11,901 using Smart Shuffle, which adds Spotify’s suggestions based on your liked list to refresh your list, one suggestion for every two songs. I am going to have to live forever to listen to them all.
The classic monthly Coppock chart tells a somewhat different story. There is no sign of a turning point, but the Curve is approaching zero, which usually signals a bear/ consolidation phase at a mature stage. What is clear is that there is no oomph in this market. Good results are rewarded, unless there are valuation issues, as with Palantir, but there is no follow-through. We need something new and positive to add zest to this market.
The Nasdaq 100 Technology index is trading at levels close to those first reached in February 2021. Nvidia has made no progress for roughly a year. The ideal market is one supported by a rising (from negative) monthly Coppock indicator. This, we don’t have; Coppock is still sending a message of caution.
Not that I feel especially cautious. My gut feeling is bullish. I am a story guy and when I listen to Jensen Huang, Alex Karp or Bill McDermott (of ServiceNow) the palpable sense of excitement is infectious. It is like we live in a world with plenty of exciting technology, smart phones, lap tops, giant TVs with incredible sound and stunning picture quality, ever more realistic computer games, giant banks of computer memory that store all our stuff but we ain’t seen nothing yet.
We are on the brink of a world of game-changing wonders, which could trigger some breathtaking stockmarket action. The idea of war as a bunch of grunts shooting at each other is still being played out in Ukraine but already it feels like something from the past.
Everything feels a bit like something from the past which is why I think the guys at Palantir are so excited. A tidal wave of change is going to sweep around the world dividing countries, governments, corporations and every kind of enterprise into what Karp calls the quick and the dead. The world in which my grandchildren grow to adulthood is going to be unrecogniseable from the world in which I grew up.
Many people of my age don’t have smart phones because they can’t cope with the technology. They use old Nokias or land lines. My five year old granddaughter doesn’t own a smart phone but she can play one like Mozart on a piano. She has never even seen a land line. She may never drive a car or do the washing up; she will certainly expect her phone or whatever, the virtual screen which floats up in front of her on command, to have answers to everything.
These things won’t just happen. It will be the focused brain power concentrated in centres of excellence like the West Coast of America that will make these things happen. We need to remember that when we look at charts. Bear markets, especially in America, are springboards for the next advance.
Share Recommendations
Microstrategy. MSTR
Nvidia. NVDA
Palantir. PLTR
Strategy – Buy The Best, Again And Again
I like the idea of continually recommending the same shares. I don’t do value, I do excitement. Nothing excites me more than the most exciting shares.
