Key insights
- The article discusses potential market risks associated with upcoming IPOs from major tech companies like SpaceX, Anthropic, and OpenAI. The author expresses concern about "institutional dumping" onto retail investors via 401Ks, predicting a market correction or crash. Strategies suggested include raising cash, selling cash-secured puts on IPOs, and buying call leaps on potentially oversold large-cap stocks. This sentiment suggests a bearish outlook for the near-term US equity market due to speculative IPO activity and potential outflows from retirement funds.
SpaceX, Anthroipic and OpenAI are all going to IPO soon. Youtubers have already warned that "insects on wallstreet" are trying to find the scapegoats to dump this crap on. The targets it seems, are 401K, and other funds. Hence the prediction that markets will at least correct, if not crash because of these "institutional dumping" events.
I have already raised some cash, as dry powder. I have also rebalanced my 401K to 99% cash. I will wait till this IPO mania settles down. I will check if I can raise more cash.
After the IPO, I am mainly going to try and do one of two things.
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CSPs to build positions: I will sell very deep OTM cash secured puts on Anthropic. If youtubers are right, it will go down and premiums will be high right after IPO so the cash secured puts will pay me for getting a great point of entry.
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Slingshot trades: Meta is such a dead stock right now. So was AMZN sometime back. So if any of these names crash as a domino effect of these IPOs crashing, then I will buy deep ITM call leaps (long expiry) hoping for a slingshot action in the price. Ideally, such robust businesses should not go below certain valuations so when they do, we basically grab'em.
How do you plan to play this out? Would love to hear your thoughts.