Buy this, sell that

Good morning! 👋

There are risks you can control and risks you cannot.

Stick to the former.

Especially when JPow starts yapping.

Asking the Fed to deal with inflation is like asking a barber with scissors in his hand if you need a haircut.

My colleague Steph Pomboy—aka the Macro Maven—put it brilliantly, noting that “the only thing more ridiculous than the Fed trying to forecast rates and economic conditions is the ‘journalists’ asking questions about those forecasts. These guys couldn’t forecast wind in a hurricane.”

Indeed!

Here’s my playbook.

Why all the selling yesterday?

My email lit up after yesterday’s Fed announcement and the ensuing selloff.

...What the fruitloops just happened?

...But I thought the end of hikes was a good thing?

There’s actually a very simple explanation.

The whipsaw is a textbook example of market mechanics.

Big, leveraged traders swept prices higher to take out all the breakout entries that had been placed ahead of the Fed in anticipation of a pause or a cut while simultaneously dragging in the FOMO/MOMO money.

Remember, Wall Street can see your orders and pays for order flow.

Once that was done and they’d cleared the shelf, so to speak, they orchestrated a rug pull with the specific goal of taking out the trailing stops and busting those who had let go of their hedges.

Next, they’ll grind to burn the premium. My guess is that they’ll draw in some of the bottom fishers first because, well, you never waste a crisis. I think the green lasts a few bars at most; in fact, it may be gone by the time you read this.

Fortunately, there is a solution—and it’s one savvy investors in the OBA Family know all too well.

The way you win is to take away Wall Street’s advantage by NOT playing their games in the first place.

This isn’t rocket science.

• Zoom out
• Use tactics that take away their advantage
• Adopt a different time scale

I’m here if you’d like a little help. Upgrade to Paid

Zucked again

I’ve made no bones about my distrust of Meta CEO Mark Zuckerberg over the years. He’s brilliant, ruthless, and now reports suggest a “rager” too. (Read)

I still won’t touch Meta shares with a 10-foot pole.

Ford expects to lose $3 billion this year 🤦♂️

Ford’s EV unit expects to lose $3 billion this year... but still says it’s on track for 8% pretax margins by 2026. (Read)

Which proves a point I make frequently: Nobody ever went broke on accrual accounting.

What you want to pay attention to is that Tesla’s operating and pretax margins were already 17% and 16.84%, respectively, in 2022. Not only that, Tesla’s pretax margins have been positive since 2020.

It’s yet another classic case of conventional legacy costs sinking a once-proud household name that simply can’t compete.

Go Elon!!!

I hope I’m smart enough to buy more TSLA.

Meanwhile, boy oh boy, am I glad I finally dumped my Ford.

Block just became uninvestable

Noted short-seller Hindenburg Research has gone after Jack Dorsey’s Block, saying the company’s flagship app facilitates fraud. (Read)

Normally, I’d encourage some caution given the way short-sellers like Hindenburg play their trade. But in this case, I’m inclined to take what they’re alleging seriously.

Hindenburg’s report cites extensive screenshots, employee messages, and what appears to be clearly informed privileged information. What really catches my attention, though, is that Hindenburg managed to open fake accounts under the aliases of Elon Musk and former President Donald Trump.

It’s probably too late to short, but I sure as heck wouldn’t bet on a rebound either.

Shares are down 16.23% in the premarket as I type.

Zoonotic spillover

You’d think we would learn from COVID, the bird flu, swine flu, and heck, even the flu-flu.

But noooooo.

Makes me deeply suspicious that vaccine makers recently saw the need to publicly state that they’re standing by to protect us from a zoonotic spillover. (Read)

What do they know that we don’t?

Or, as the case may be, what have they already done that we don’t (yet) know about?

Sigh.

Keith’s Rule of the Back Page Applies: If you’re not familiar with it, you should be. The biggest profit potential often comes from the “back pages” while stories are comparatively unknown and unfollowed. By the time something hits the front page, it’s already done. That’s why I remain most concerned about the Marburg outbreak and will continue to hold my pharma shares anyway.

Bottom Line

The most successful money mavericks concentrate on being profitable, even when they’re wrong and even when stocks they’ve purchased are going against ‘em.

It’s a nuance, but one that can make a huge difference.

As always, MAKE it a great day!

You got this.

Keith 😊