📝A powerful start to the final week of 2023

Good morning! 👋

Welcome back from what I hope was a fabulous Christmas if you were celebrating and a great weekend otherwise if you weren’t.

There are a lot of folks still enjoying time with their families – including yours truly - so, with your permission, I’m going to keep things a bit shorter than normal.

Let’s get to it!

The markets look like they want to run higher in the early going but I wouldn’t be surprised to see some late week shenanigans.

I say that because holiday-shortened weeks are typically characterized by lighter volumes and wider spreads – meaning the difference between the cost to buy a stock and the price at which the seller has shares on offer. Technically speaking, prices tend to become less efficient this time of year – meaning that they take longer to adjust to new inputs - and can jump around more than they would otherwise.

This sounds scary if you are not used to thinking about the markets in these terms, but I encourage you not to let your emotions get the better of you.

Chaos creates opportunity!

Here’s why.

Wall Street’s computers are programmed to recognize statistical abnormalities that often have nothing to do with the underlying fundamentals. The rise of passive investing and computerization has magnified the impact, a topic I addressed last week with the super-savvy Charles Payne. (Watch)

This is why you see stocks like Tesla bounce around so much whenever a headline breaks, for example. Or a company like Nvidia turn into a ping-pong ball around earnings.

Not to get too far off in the weeds but imagine a rubber band. The harder you stretch it, the more it wants to “snap” back. That’s all that’s happening mathematically.

Here’s the cool part.

Once you reorient your thinking, you can learn to recognize the uncertainty that grips most investors when this stuff happens as a sign that there’s a short-term market reversal nearby. Then, spring into action.

The path forward is as simple as it is elegant, especially on holiday-shortened weeks!

• Buy the best, ignore the rest.
• Focus on companies with fortress-like balance sheets that are making “must have” products and services the world cannot live without. “Nice to haves” don’t count.
• Use the right tactics to take away Wall Street’s advantage while boosting your profit potential at the same time.

Speaking of which, where do I see the markets going and which stocks will help get you and your money there?

The fabulous Ashley Webster asked me about just that when I popped by for a quick discussion as the opening bell did its thing. We also talked about big pharma, Intel in Israel and more. (Watch)

You know what to do!

Bottom Line

You are never powerful in life until you are powerful over your own money!

 --Suze Orman

As always, let’s MAKE it a great day – you got this!

Keith 😊

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