☕ 45B reasons you may want to own this ETF

Good morning! 👋  

I sent out a tweet - I suppose you’d call it an “x” - last night saying that I saw two distinct scenarios come this morning’s opening bell: 

Looks like we got #1 even though rates have again ticked up a skosh and the fear of #2 remains. 

Cool beans. 

Here’s my playbook. 

1 –Treasury yields holding 4.1ish% 

Remember how this works...  

Big traders borrow gobs of money, so they use steady or falling rates as an opportunity to take on more leverage and buy. If rates rise, they tend to deleverage – meaning sell - as fast as they can because the cost of borrowing money is more expensive, which reduces their profits. 

For the most part, this is “big finance” so it’s not an issue for individual investors. 

I share this kind of stuff with you so that you a) know how things really work and b) can develop an intuitive understanding about what’s happening. That way you can calmly, rationally watch the news without running around like a chicken with your head cut off even though that’s exactly what many other investors (who don’t understand what I’ve just told you) do when the headlines rage. 

What to Do Today: Take a deep breath. Stay focused. Stick to the Plan. If whatever is jostling markets doesn’t interfere with the case for owning the stocks we talk about frequently (and most of the time it doesn’t), charge on! 

2 – Apple Watch, part deux 

Shares were off overnight as the herd digested news that Apple is going to sell its latest watches without the blood oxygen sensor feature that’s at the center of its fight with Massimo. The fear is that removing the feature will make ‘em less popular with consumers. (Read) 

It’s not a needle mover. 

Apple reported $39.8B in wearables sales last year and the watch itself is less than 5% of revenue. 

The real risk, if there is one, comes from the current administration which is openly anti-big-company, and would reportedly love nothing more than to drag Apple into an antitrust action a few weeks from now. 

The other thing, and this is something you’re not hearing right now... is that Massimo, the company which is alleging patent infringement, waited for Apple to launch the watch... then filed the lawsuit. I can easily imagine Apple filing a predatory patent countersuit. 

My $0.02: I’ll stick with Apple thank you very much. Shares btw, are leading the Nazzy higher (again) which suggests that more than a few investors and traders have a similar view. Chances are good that anybody who sold their Apple shares over the past few days will regret it shortly. 

3 – 45B reasons you may want to own this ETF 

I’ve seen some big numbers in my time, but this one caught me by surprise.  

Mary Callahan Erdoes, a JPMorgan Chase executive noted recently that, “there are people trying to hack into JPMorgan Chase 45 billion times a day.” (Read) 

Owning an ETF like the Global X Cybersecurity ETF (BUG) makes sense. It’s returned 41.61% over the past 12 months versus the S&P 500 which has turned in 22.62% over the same time period.  

I prefer a more direct approach to specific companies like the cyber security stock I recommended to OBAers which turned in 179.51% by comparison, but that’s not the point. 

What I want you to understand is the nature of the opportunity and the speed at which companies following along have grown versus the broader markets. 

MyPOV: Digitalisation is one of the single largest investing themes in human history. Anybody who is not on board really ought to take a hard look in the mirror and ask themselves why not. Simple as that. 

4 – Google: slackers beware 

“Quiet quitting” became a thing late last year with legions of GenZers thinking it was a pretty smart move to do just enough work to keep their job but not go the extra mile. 

They’re about to get a hard lesson in “fast-firing.” 

This time from Google, which announced that more job cuts are needed to meet company objectives. (Read) 

It might be time to take another look at Google. 

Microsoft is still the stronger player but quantitatively speaking the difference is large enough between the two companies that traders (and their computers) may try to close the gap. 

Speaking of which, the pairs trade idea I brought to your attention has played out as expected. MSFT tacked on 18.23% over the past three months while GOOG put in just 2.14% according to Yahoo!Finance. 

Now, the reverse trade could be interesting... long GOOG and short MSFT. 

Or just stick with MSFT. 

Simple. 

Keith’s Quick Tip: Investing is only complicated if you make it that way. So don’t... unless you want to. 🤦‍♂️ 

5 – TSMC posts double beat = proof positive AI has traction

Taiwan Semiconductor Manufacturing Company just posted a double beat – meaning that it beat analyst expectations on both the top and bottom lines. (Read) 

I wouldn’t have expected anything less considering the company makes roughly 55% of the world's chips.  

However, I don’t own it because I prefer two other chip makers with what I believe to be a) bigger upside and b) less risk from China, but that's just me. 

What I want to draw to your attention is that this is a great development because it reinforces the drive to AI that we talk about frequently.  

Bottom Line  

People fear losing money in the markets. That’s normal, but completely misguided. 

What they should really fear is not making more. 

You got this! 

Now, let’s MAKE it a great day. 

Keith 😊