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Outshining Nvidia - Leadership Lift - Joe's Picks - Current Market Analysis

Thursday, February 22, 2024

Primary Blog/Stock Market/Outshining Nvidia - Leadership Lift - Joe's Picks - Current Market Analysis
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Hey Friend,

The job of The Wealth Effect Newsletter is to bring you easy-to-digest bites of business & investment gold.

Not "liquid gold" like those crazy Velveeta cheese ads, we're talking about the type of gold that will lead you to making the best business decisions, many new clients, and financial advancement.

So, let's get moving...

What's Up This Week...

Sector Spotlight - Outshining Nvidia: SMCI Emerges...

Leadership Lift - Law of the LID - Maxwell
Joe's Picks - See What Joe's Buyin' & Sellin'
Market Analysis - A Snapshot of Joe's Weekly Chartwork

Sector Spotlight: Outshining Nvidia?

In the realm of artificial intelligence stocks, Super Micro Computer has emerged as a true contender, catching the attention of Wall Street with its remarkable performance. Over the past year, this California-based company has seen its stock surge by an impressive 585%, significantly outpacing the growth of industry giant Nvidia.

Super Micro Computer's ascent is particularly noteworthy, given its market valuation, which has skyrocketed from just under $5 billion at the start of 2023 to a commanding $27.5 billion today. This surge underscores the company's strong foothold in the AI market.

Specializing in high-performance servers equipped with AI capabilities, Super Micro Computer has witnessed a surge in demand, fueled by the mainstream adoption of generative AI technologies like ChatGPT and Midjourney.

The company's recent earnings announcement exceeded Wall Street's expectations, with second-quarter revenue doubling year-over-year to $3.7 billion. Moreover, its revised full-year revenue guidance of at least $14.3 billion far exceeds analyst estimates, indicating robust growth prospects.

Analysts are taking note of Super Micro Computer's impressive performance, with Wedbush analyst Matt Bryson more than doubling his price target on the stock to $530. Susquehanna analyst Mehdi Hosseini echoed sentiments that AI adoption is still in its early stages, suggesting further upside potential.

This remarkable performance not only solidifies Super Micro Computer's position but also hints at positive implications for other players in the AI space, such as Nvidia.

Leadership Lift

John Maxwell's "Law of the Lid" encapsulates a profound principle that serves as a cornerstone for personal and professional development. At its core, this law emphasizes the critical role of leadership in determining the upper limit of an individual or organization's success.

Maxwell suggests that leadership acts as a lid, capping the potential for growth and achievement. The effectiveness of leadership sets the maximum level of performance and accomplishment that can be attained. In essence, no individual or organization can surpass the limitations imposed by their leadership capabilities.

Understanding the Law of the Lid prompts individuals and organizations to prioritize leadership development. By enhancing leadership skills, one can raise the lid of potential and unlock greater opportunities for success. This principle underscores the importance of continuous learning, self-improvement, and mentorship in reaching new heights of excellence.

Maxwell's insights into the Law of the Lid have profound implications for leaders at all levels. Whether in business, politics, education, or any other field, recognizing the impact of leadership on outcomes is essential for driving meaningful change and achieving ambitious goals.

In essence, the Law of the Lid serves as a powerful reminder that effective leadership is the key to unlocking unlimited potential and driving sustained success in all endeavors.

Joe's Picks: What He's Buyin' & Sellin'

Ticker: DIS

Date Bought: January 16th

Status: Hold

The Predictive Trader is our proprietary tool that Joe uses for buy & sell signals. The Predictive Trader gave a buy signal on Disney, and this week he is HOLDING.

Market Analysis

AUM Navigator - Bullish Power Mode

The AUM Navigator has 6 modes:

Bullish Power - Bullish - Bullish Neutral

Bearish Power - Bearish - Bearish Neutral

Growth Portfolios - Remain Bullish

Pictured below is a chart of the SP500. Price is currently exhibiting strong bullish action. You can clearly see our AUM Navigator flashed a cycle bottom in late October. This gave us a bullish entry into the market. Price is approaching the top of this channel. I would expect it to bounce off the top of the channel followed by a short-lived correction, and then continue to press upward. As we press toward the top of this channel, now would be a good time to harvest gains out of growth positions and into fixed income/money market until we get past the expected short-term correction. Your clients will love you!

New Money - Hold in Stable

As you have new money coming under management, this is not the best time to invest in growth portfolios. We don't buy at the top of the market! Hold new money in fixed income/money market until after this expected short-term correction. Wait until a new bullish entry presents itself.

Want more details on our current market analysis? Join our Advisor's Edge Facebook community and/or enroll into our 1 year mentorship program.

That's the gold for today! Better than Velveeta if you ask us!

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Joe & Candice Casey

Founders, Catalyst Wealth Coaching

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