8 minute read
It’s time to say goodbye to 2018, and potentially the run of the longest bull market we’ve ever seen. Oh the volatility! It was a real rough ride, wasn’t it? Admit it though: it’s what makes investing so exciting, the never-knowing-which-way-the-markets-go-ness of it all.
For our last blog of the year we thought we’d recap some investing moments to remind you that while it was a difficult year, it’s never as bad as we thought it was. It could’ve been a lot worse (we’re looking at you, 2008). We do hope that amidst all the volatility and heart palpitations that your Hatch experience made your 2018 a little bit (*cough* a lot) better.
Now it’s our turn to be smug: Hatch had a great 2018, with $3 million NZD invested in less than 3 months and we’re proud to have established a community of motivated investors. We’ve said it before and we’ll say it again: we couldn’t have done any of it without you! So to thank you, and to mark the end of an intense but stellar year, here are our top 10 investing moments of 2018!
10. Nvidia’s rollercoaster
Nothing like an earnings report to mess things up. NVIDIA (NVDA) shareholders endured some extreme volatility in 2018! Their share price fell as much as 19% after they reported earnings for the third quarter and missed revenue and guidance. Crypto’s dive impacted Nvidia’s share as they specialise in making hardware for digital currency mining. Thankfully, Nintendo Switches are going gangbusters and the chip maker benefited from surging demand in its core video game segment, as well as creating new revenue lines to support artificial intelligence and autonomous driving capabilities. All of this has resulted in Nvidia reporting revenue of $3.2 billion in Q3, up 21% year on year. If you’re in this car, buckle up!
9. Oil tanked
In the span of a few weeks over September, crude prices went from a 4-year high to a bitey bear market. The oil crash (crude was down more than 30% from its peak) was triggered by a series of factors that spooked traders who were expecting to see $100 per barrel, certainly not below $50. President Trump weighed in by celebrating the oil crash, tweeting: "Oil prices getting lower, Great! Like a big Tax Cut for America and the World. Enjoy!" What a nice guy! Luckily for the planet, our appetite for oil is slowing down and global oil supply is expected to outpace demand in 2019. Black gold? Maybe not anymore.
8. No one wants you, Crypto
Bitcoin sank to its lowest price in over a year in October 2018, the prices of other major cryptocurrencies like ETH, XRP and bitcoin cash fell alongside it. Who saw THAT coming? Oh wait, many, many financial whizkids actually. Bitcoin’s market cap dropped below the $100 billion level for the first time since November 2017 and the total capitalisation of the cryptocurrency market fell from roughly $210 billion to $180 billion. That’s still a lot of billions though. And possibly billions of tears from the bitcoin-believers who thought the crypto market would rise and rise and rise.
7. Microsoft took a bite outta Apple
Apple Inc. (APPL) became the first US company to hit a trillion dollar market capitalisation in 2018 but it was Microsoft (MSFT) who had the last laugh. Briefly. Sure, Apple became the most valuable company in the world in 2012, surpassing Microsoft with the rise of their iPhone sales pushing the company into the stratosphere. But Microsoft overtook Apple in market cap value for the first time in 8 years with a value of $812.93 billion in November, followed by Apple at, well, a very close $812.60 billion. It made Microsoft the world’s most valuable company, even if only for a little while! Microsoft failed in the mobile era with its Windows Phone efforts, but the company is clearly resilient and is now focused on cross-platform technologies, the cloud, artificial intelligence, and aims to secure the future of quantum and mixed reality computing. Watch your back, Apple!
6. October slayed the share markets
We kissed the sustained bull market goodbye over 6 days in October when shares just kept falling. What goes up, must come down! Looking for answers as to why you were seeing red each time you opened your Hatch account? Fears over rising US interest rates, general concerns about sustained global growth, and ongoing political risks (hi, potential trade war) were some of the factors that prompted investors to flee. Even the FAANGs lost their bite!
5. Nike just did it by taking a knee
Nike’s (NKE) controversial ad campaign featuring former NFL quarterback Colin Kaepernick had an unexpected fallout: record high share prices in September. Sure, there was a small stumble after the rather public backlash to the sassy endorsement deal, but the shares bounced back. Swoosh! Need a refresher? In 2016 Kaepernick took a knee while the national anthem played during a football game to protest the way some police officers treated African-Americans. Before this endorsement deal, Nike was silent on the NFL controversy, however, this campaign makes it clear that Nike has its knee firmly in Kaepernick’s camp. Whatever your political views, the overall takeaway from courting controversy seems to be a positive one for Nike. It’s inspiring a new generation of politically conscious consumers to support Nike’s brand with 170,000 new Instagram followers taking them to 80.5 million followers after the ad.
4. FAANGS don’t suck your blood, they just suck
Well, well, well, look who’s lost over $1 trillion dollars in value. How many zeros is that anyway? Too many. FAANG stocks took a beating in 2018 amid investors' concerns that the seemingly never ending growth surge of the Beatles of technology companies could come under threat. October and November were harrowing. So, what’s to blame? Although there were a few of the usual suspects like rising interest rates and ongoing global trade tensions behind this selloff, the correction was perhaps being anticipated for some time now.
3. Elon’s highs and lows
Elon is an unpredictable guy. Remember that time in 2018 where he said he would get a submarine to help free the Thai cave boys and called the real heroes paedophiles? Not his best moment. And then there was that time he tweeted that he was working himself to the bone and relies on Ambien to sleep. Yikes. Oh and what about when he smoked weed on a live webshow? Pretty dope, bro. Yeah, Tesla (TSLA) shares fell 6% for those shenanigans, but nothing tops the time he burned down his own company’s share price by an impressive 21% when he tweeted he’d secured funding for a private takeover of Tesla. And that was also super illegal. The decline chopped $5.4 billion USD off Tesla's market value and he had to pay a $40 million fine. Say what you will, tech’s bad boy is still owning it with Tesla and SpaceX.
2. Facebook broke the rules
Facebook (FB) casually exposed data on up to 87 million Facebook users to a researcher who worked at Cambridge Analytica which worked for the Trump campaign. Whoops! Facebook’s failure to get Cambridge Analytica to delete all traces of data from its servers meant they were able retain predictive models that came from millions of social media profiles throughout the US presidential election. This scandal has been described as a watershed moment in the public understanding of personal data and resulted in a massive fall in Facebook's share price. That was a good time to buy! Their shares dropped and so did their popularity: 1 in 10 Americans have deleted their Facebook accounts thanks to the scandal, and 1 in 20 Brits did the same which goes to show that people are paying attention to big business’ values, or lack thereof, and reacting accordingly.
1. Pot got real hot (there will be puns)
First you gave us Justin Trudeau and his smouldering, sexy politics, and then you gave us legalised marijuana and bold companies to supply it. Oh Canada! Will you never stop delighting us! On October 17, 2018, recreational marijuana became legal for purchase in licensed dispensaries throughout Canada. Needless to say, investors smelled the opportunity, hoping to eventually cash in on what’s predicted to be a lucrative market. Are Canadians insane in the membrane? Maybe. Canada’s reefer madness started with Canopy Growth Corporation (CGC) a year ago in October 2017. Then Tilray (TLRY) happened, causing quite the buzz on Wall Street after posting its best day having been allowed to import pot into the United States for medical research. Tilray shares reached a smokin’ valuation of over $20 billion in wild trading over one week. What will happen to the reefer revolution in 2019?
Bring on 2019 already
We can’t predict what’s going to happen but there are murmurings that it’s going to be a year that will test investors’ nerves. There’s no reason for worry or panic though, from a long-term investing perspective, volatile markets can be a great time for investors to take advantage of shares with strong fundamentals at a discount. If you’ve been waiting to invest in the companies and brands you interact with on a daily basis, 2019 might be the year for you to get off the sidelines and into the fray. So here’s to 2019, happy investing!