Nasdaq-100 analysis @ 2024-03-22

date: 2024-03-19

Nasdaq-100 index is a good long term invest target. Can I beat the index? here is my try.

My strategy is to hold index as long as possible, no matter if it's rising or falling. but I will take leverage when the index is low risk, and hold no leverage when high risk(price is high, inflation etc. ). So the risk prediction is the key point.

Lets begin, how I judge the risk of Nasdaq-100 index, its composed of 2 parts:

1. Economic situation:
   • Inflation:
     • Tech company will be hurted when in inflation situation.
   • Economic growth:
     • GDP, PMI, Employment, sales etc.
2. Single stock situation, is the major company in the index growing well?

Economic situation

key events:

• 2024-03-12: CORE CPI MoM 0.4% higher than expected.
• 2024-03-14: PPI MoM 0.6% higher than expected.

Two month data show that inflation is continue to rise not just a single month data noise. that will be the main risk may drive index down. should pay atttention on the Fed's action. if Fed tighten the interest rate , should be more risk aversion. my strategy for now is to hold VOO(SP-500 index) and find a chance to buy TQQQ(leveraged Nasdaq-100 index) when extreme low position or Fed's action is dovish.

Nonfarm Payrolls and Unemployment Rate show the economy is still hot. can still expect the company's earning growth.

Single stock

company	ratio of index	PE	EPS	growth expectation	RISK
MSFT	8.88%	37.74	11.0	high	low
AAPL	7.65%	27.03	6.46	moderate	low
NVDA	6.30%	74.13	12.06	high	high
AMZN	5.20%	60.17	2.95	moderate	moderate
META	4.86%	32.50	15.2	moderate	low
GOOGL	4.7%	24.32	5.85	low	moderate
AVGO	4.25%	45.8	27.87	moderate	low
COST	2.39%	47.47	15.31	low	moderate
AMD	2.29%	365.11	0.53	high	high
TSLA	2.26%	38.01	4.72	morderate	high
NFLX	1.94%	50.42	12.23	low	moderate
PEP	1.68%	25.1	6.59	low	moderate

high risk:

• NVDA: high PE, growth expectation is high
• AMD: high PE, growth expectation is high
• TSLA: high PE, growth low than expected

other risk

seasonal risk:

1. Months When QQQ Outperforms:
   1. November - This has historically been one of the strongest months for QQQ and the Nasdaq. From 1971-2022, QQQ averaged a 2.1% gain in November.
   2. April - The Nasdaq and tech stocks tend to see a bump in April, with QQQ averaging a 2.7% gain from 1971-2022 during this month.
   3. July - Coming out of the summer lull, July has averaged a 1.9% gain for QQQ from 1971-2022.
2. Periods of Outperformance:
   1. End of Q4/Start of Q1 - The October to January period has tended to be strong for QQQ, likely due to holiday consumer spending benefiting tech names.
   2. Summer Months - While seemingly counterintuitive, the May-August period has seen QQQ outperform from 1971-2022 versus other seasonal periods.

March is not on the list, be more cautious.

Geopolitical risk:

• red sea crisis, may make oil price surge and trade cost increase.