Around the Horn on Fins, A Technical View of What's Working, What's Not, and Where We Go From Here.

Just some thoughts, none of this is financial advice, and if you want actual picks it’s behind the wall.

Brazil and Latam look strong across any timeframe you look at. Full credit to Cluseau for catching the Argentine banks move early with names like Grupo Galacia (GGAL) and others up big. The Brazilian ETF (EWZ) also looks strong and two of my core names in StoneCo (STNE) and Nubank (NU) both look solid. It’s also worth noting that these have held in there in the face of a stronger dollar of late. With warming relations between Argentina and hopefully Brazil, this is a pocket of EM that is worth owning to me. I’ve been impressed with the fundamentals and now the narrative is also improving.

European banks still look strong, though momentum feels like it’s topping out. The golden rate and credit environment that drove record EPS growth is now fading as cuts begin. BFF Bank (BFF) crushed it and was probably a 35% or 40% return since April. Barclays (BARC) has also been strong as has Deutsche Bank (DB). All of the larger money centers in Europe had the best environment ever over the past few years. BNP Paribas (BNP) is now entering the “I’m getting interested zone” as it technically looks like death after a bunch of bad press. Challenge is, it’s still not outright cheap at 7x despite it looking like it has a date with the 200-week moving average. What’s funny looking at BARC below is you had this post rate rise time window where everyone knew (at least I did) that the EPS situation was going to get way better, and yet the stock didn’t move in 2023. Just took a little time.

Large-cap banks, especially Citigroup (C), look technically strong. Both on the daily and the weekly and almost across the group. This environment is made for them: strong capital markets activity, equity trading, and higher rates all provide tailwinds. The lack of core organic lending growth (non-NDFI) does linger in the background as a tailwind, but that’s tomorrow’s problem. No matter who you look at, WFC, JPM or BAC they all look fairly strong despite carrying rich valuations. This call of mine on C in October of 2023 looks stunning in hindsight. And if you wanted to get cute about it (which I don’t personally) the play would be to short JPM from a valuation persepective against the cheaper C.

As good as big banks charts look, private equity now lives under the 200-day like it’s a permanent address. KKR (KKR), Apollo (APO), Ares (ARES), Blue Owl (OWL), the fundamentals appear solid, but the sentiment is gone. This is one of my bigger “misses” from this year. Mainly that I didn’t go heavier into the Long Large Cap Banks & Short Alts into this year. I think the thesis is still intact though, for what it’s worth. Mainly that the Biden era regulations on banks pushed them away from marginal risk taking that was gladly accepted by Private Equity & Private Credit. As the regulatory pendulum swings back to easier for banks, I think the relative PE/PC advantage is less and they must continually seek riskier and more levered cyclical plays. Counterpoint to me would be they have a ton of dry powder, which they do.

BDC’s too follow this trend. No comment other than don’t be a hero trying to bottom tick these. What purpose does that serve?

In payments, Shift4 (FOUR) is sitting right near Munger’s “buy great companies at the 200-week moving average.” The question is whether it still qualifies as great. PayPal (PYPL) lives at that same line and keeps testing investor faith, mine included. If you can’t rally on an OpenAI partnership then you may in fact be a value trap. The entire payments space has been tough lately, if anyone has any names they love there I’m all ears. I just can’t get excited about the sector anymore with AI sucking capital out of the other sectors like a black hole.

These haven’t really been on my mind at all but the consumer finance sector actually looks pretty good. Synchrony (SYF) and Capital One (COF) both look excellent on long-term charts. COF spends heavily on AI; if any bank is going to turn data into dominance, it’s them. SYF keeps shrinking the float and quietly winning the compounding game, with hat tip to Colarion here. COF trades at 10x 2026 earnings and SYF around 8x 2026 earnings, so neither is outright expensive and what’s weighing them down is obviously the fact that they’re financials and no one cares (a joke) and also that there are potential recession fears on the horizon, or at least a “K Shaped Economy” weight from stresses amongst the lower income cohort of Americans.

In what I’ll call the “more speculative” segment of consumer finance and Fintech, it’s good to see Sezzle (SEZL) completely unwind its pump from earlier this year. I can’t remember who it was but I remember some random on X telling me that the move in SEZL was fundamental in June and July. I really need to start making better mental notes of this and shorting when I read things that are so patently naive like this. And along those same lines, Upstart (UPST) looks like it wants to just continue life below its 200 day moving average for the foreseeable future. Don’t say I didn’t warn you on this one, because I absolutely did. It serves up AI automated debt consolidation loans in the mid to high 20’s percent interest rates, not exactly the thing you want in a K Shaped economy.

SoFi (SOFI) and Dave (DAVE) both remain strong. And while I’m at it, Cathie Wood’s ARKF, the “Fintech Innovation Fund” also looks strong. The mental fluidity needed to own these names below and call it Fintech, is actually quite impressive. This is momo by any other name, and momo for now is strong like a bull. The same way I try not to be a hero buying below the 200 day, it’s hard to short things that are this strong although the counterargument would be that it’s all flows and once the flows are gone you should look out below. Oddly enough PLTR is somehow a “Fintech” now although no one including Cathie knows why or how.

And moving on lastly to the crypto and predictions market experts, Robinhood (HOOD) feels like it’s flattening out. This one for followers is a triple from April, which is nice, but the question on go forward revenues gets challenging. They’ve added predicion markets in competition with Kalshi and Poly and business appears to be booming. I question whether or not somewhere there are going to be legal challenges to the whole “prediction” market. It all just seems too scammy. Coinbase (COIN) our favorite crypto, stablecoin, prediction market maker on the other hand looks a touch weaker. This one could actually be a decent short against a BTC long at some point. The argument being that the pump in the crypto brokers has far surpassed the actual activity coming down the pike, especially given the technicals on BTC below.

In crypto, Ethereum (ETH) is marginally stronger than Bitcoin (BTC), but BTC does not look good. Bulls are in dire need of a dip buying wave. BitMine Immersion (BMNR) and MicroStrategy (MSTR) are likely accumulating again, or maybe reflexivity finally runs out of rope. If anyone more fluent than me knows of a catalyst for the next wave of crypto buying from retail let me know. I’m looking at a 9% YTD return for BTC as of today (11/5) and am wondering where the next buyer is.

Last two individual names for today, I quite publicly said Chime (CHYM) and Circle (CRCL) were going to be shorts and they were. This is what hype driven exit liquidity looks like, and this is why I warn people not to blindly buy IPO’s, especially when investment banks pump these things. I actually think CRCL could be a buy at some point, if crypto ever turns back. But again, stretched valuation time periods are not ones to be heroes, better to let things resolved themselves technically before trying to time a dip. Take a look at either of these and tell me how excited the IPO bag holders are at CHYM are? Or the CRCL IPO $240 pop people saying that stablecoins were going to disrupt the world? The reality so far for stablecoins is everyone’s adopting their rails and abandoning the stock.

And lest we forget the elephant in the room, the black hole for capital. AI and semiconductors are getting the pullback they needed. Zoom out to weekly or monthly charts and they look exceptionally strong. But click on social media and they’ll have you convinced that the 3% move was actually 30%. Lesson in there … the short-term shakeout was overdue because things can’t go straightline forever. This capex is not stopping, and unless we get a recession you could argue they’re expensive (they are), but the earnings growth is there, and the sector is a magnet for capital. Tread lightly in places where we are clearly extended but keep the bigger picture in mind, I’m probably a buyer of these should we see any 10% pullbacks.

Why charts? I’m a visual person first of all. But second of all, Newton’s Law of Inertia reigns supreme in all parts of life. Objects in motion tend to stay in motion. Hope you all have a banger close to the year and a great November.

The best is ahead,

Victaurs