Insanity times 10

This year has been devastating on a number of fronts: COVID, the rule of law, an explosion in debt, and now rational trading. Just as the Dow had become anachronistic and irrelevant as an index, now the S&P 500 fails to represent the broader market. Without FATMAN, that is FB, AAPL, TSLA, MSFT, AMZN and to a lesser extent NFLX, the S&P would be rangebound, not up over three times.

Could this be the chart of the year? I prefer FATMAN over the horrid FAAANM

Within FATMAN, it gets worse as the two outperformers, AAPL and TSLA, are up not because revenue, profit or business outlook suddenly accelerated, but because AAPL announced a stock split which boosted the stock price and TSLA copied it when its stock price was falling, resulting in a 50% rise despite the lack of any actual business improvement. Of course “investors” will be clamouring for more stock splits and the bubble squared will likely continue even as every other stock falls. But the reality is that buyers are paying double or more for the same tin. One sees this only at the end stage of a bubble, with non-economic distractions boosting price 10 times more than one would expect. For those keeping count, ZM is now at a price/sales of 99, quite a increase over the 1999 internet bubble p/s of 10.

Lets break it down:

This is how the FATMAN index generally has performed; seems like a double top?

Non-economic stock split juiced the euphoria higher

TSLA was falling from $1800 to $1400 on stalling sales but copying the AAPL stock split kept the party going

triple top?

quintuple top?

NFLX is correcting: maybe it should not be included?