Storied VC says investors are unlearning the lessons of the last bull market. Jeff Bezos says you should listen.

Read: Why a fragile stock market faces danger from rising real yields as ‘TINA’ trade fades

Unicredit’s chief economic advisor Erik F. Nielsen told clients that despite a dismal April, stocks are holding up better than he expected, but maybe not for much longer: “The problem is that asset allocation is always the result of a probability game, but as the odds change with a deteriorating world economy, cash and other zero-yielding holdings might well become more attractive as a parking place for awhile.”

Onto our call of the day , which comes from Bill Gurley, general partner at Benchmark Capital and a venture capitalist who made a $11 million bet in Uber UBER, -3.81% in 2011. Several of his more than a half million followers on Twitter sat bolt upright after this Twitter thread:

“An entire generation of entreprenuers & tech investors build their entire perspectives on valuations during the second half of a 13-year amazing bull run. The ‘unlearning’ process could be painful, surprising and & unsettling to many. I anticipate denial,” tweets Hurley, who adds three points to this:

1. Previous ‘all-time’ highs are completely irrelevant. It’s not ‘cheap’ because it is down 70%. Forget those prices happened.
2. Valuation multiples are always a hack proxy. Dangerous to use. If you insist, 10X should be considered AMAZING and an upper limit. Over that silly.
3. You may be shocked to learn that people want to value your company on FCF [free cashflow] and earnings. Facebook trades at 14X GAAP & is growing 23%. What earnings multiples are you assuming?
4. Revenue & earnings QUALITY matter.

Gurley linked to his blog from 2011, where he explained that discounted cash flows “are the true drivers of value for any financial asset, companies included,” and that price/revenue is a “dangerous technique because all revenues are not created equal.”

Among those reacting to Gurley was Amazon AMZN, -2.34% CEO Jeff Bezos, whose stock is facing its worst year since 2008, after the company’s first loss in seven years:

To some, Gurley’s comments were a warning of tough times to come for the tech sector:

On the flip side, others say big stock drops in the current inflation environment aren’t abnormal:

The buzz

Warren Buffett’s Berkshire Hathaway BRK.B, -1.10% BRK.A, -0.29% bought $51.1 billion worth of equities in the first quarter in what he called a “casino” market. Chevron CVX, +0.03% and Occidental Petroleum OXY, +2.05% are on that list and he also bought up nearly 10% of the videogame maker due to be bought up by Microsoft, Activision Blizzard ATVI, +2.80%. He and vice-chairman Charlie Munger tried to reassure investors at the first in-person shareholder meeting since 2019 over the weekend.

More than 100 companies are still due to report this week, such as Pfizer PFE, -1.25% and Moderna MRNA, +7.40% and Starbucks SBUX, +0.04%, with Clorox CLX, +0.64%, Expedia EXPE, -1.31% and MGM MGM, -0.11% due Monday.

NIO NIO, +1.79% and Li Auto LI, +1.95% shares are down after reporting sharp drops in April deliveries due to rising COVID cases in China. Fresh data over the weekend showed China factory activity hitting a six-month low.

Elsewhere, experts are keeping an eye on new COVID subvariants surging in South Africa.

The Institute for Supply Management index for April is coming after the market open, along with construction spending, in a week that will give us not just a Fed meeting, but jobs data at the end of it.

Civilians in an embattled Mariupol steel mill in Ukraine began evacuating on Sunday. EU energy ministers will reportedly hold an emergency meeting on Monday to discuss Russia’s recent gas cutoffs for Poland and Bulgaria, as Germany vowed to wean off Russian oil by late summer.

The markets

Stocks DJIA, -0.10% SPX, -0.06% COMP, +0.34% have opened slightly higher, but choppy, with bond yields TMUBMUSD10Y, 2.985% TMUBMUSD02Y, 2.690% also climbing after massive gains in April. Commodities are mostly headed the other way, with oil CL00, -3.00% and gold prices GC00, -2.66% lower. Natural gas futures NG00, +2.43% are rising. The dollar DXY, +0.49% continues to surge across the board, but not against the Russian ruble USDRUB, -0.45%. Asia stocks traded lower, though most markets were closed for a holiday. London was also on a break, but Europe stocks SXXP, -1.22% are lower, after suffering a Nordic-market driven flash crash earlier in the day.

The chart

The latest weekly Commitment of Traders report from the U.S. Commodity Futures Trading Commission showed hedge funds dumping corn, hogs, sugar and cocoa amid an overall negative market mood.Peak Trading Research noted shorts added on cocoa futures were the second biggest on record, traditionally a buy signal.

Those futures have gained in 17 of 19 one-month periods after record short positions have been added, said Peak Trading. Here’s their chart:

The tickers

These were the top searched tickers on MarketWatch as of 6 a.m. Eastern Time:

Random reads

An Italian football match has become the first to be viewed simultaneously in the Metaverse.

An animated series created by Meghan Markle for Netflix is getting the chop

Headed to Miami’s inaugural Grand Prix? Be prepared to shell out more than $1,000 for tickets.

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