I found out on the radio news this morning that NASDAQ is in a new bull market. How so? The index is 20% more expensive today than it was in mid-June. I guess the conclusion, communicated by the cheerfully relieved tone, is that it’s safe to begin investing again.

That may be correct, if a bit tardy, since the lows of mid-June seem to be not only holding but left far behind. (An aside: I was looking at Asana, a stock I don’t own and know little more than the ticker symbol ASAN). It had a high of 141 last November, but had fallen to 16.60 by this June 16th. It bounced off that low three times in the second half of July before rising to the current 29 or so. One could reasonably argue that it has stopped going down. Same story with Peloton (PTON), although the low of 8.22 came a bit later in time. It’s now 13.41. Same story for Roblox (RBLX), a stock I do own, which has gone from 24 to 53. …and for Robinhood (HOOD), another holding of mine. The figures there are 6.81 and 11.05 (although my idea of buying it in the low teens a while ago based on net working capital of 11-ish wasn’t my finest hour). )

Anyway, I think the much bigger story is the extraordinary volatility of prices in percentage terms over the summer. In the case of ASAN it was moving up or down by 10% a week before the apparent breakout. I’ve had it in my mind since mid-June that we’re now going sideways for a while as we sort stocks into ones that have strong long-term fundamentals and those whose strength is mostly a function of the extraordinary economic and stock market environment of 2020-21 and which, therefore, have a limited remaining shelf life.

Do I want to make a big bet on the direction of market sentiment? No. It seems to me that I can either:

–take a value approach and look for firms like HOOD that are trading at discounts to asset value. The two main flavors of value are: with or without a catalyst for change. HOOD falls into the second category, I think, which I find much less risky. ASAN, by the way, has about a dollar a share in tangible assets. Clearly, to me anyway, the bet is on intangible assets I know nothing about.

–take the time to learn more about what I own or am interested in buying: stuff like industry structure, relative market share, barriers to entry …what allows a firm to have higher margins and faster revenue growth. One reason I’ve always liked retail is that I can visit the stores (the best way I’ve found to distinguish between, say, TGT and WMT) and use the company’s products.