Don’t abandon stocks; just make sure you own the right ones!

Good morning!

‍The markets are in holding higher as I type this morning following the jobs report. Good – more in a moment.

Here’s my playbook.

Fed now expects “growth recession” $%^&

The Fed has given up trying to engineer a “soft-landing” and is now focused on a “growth recession.”

This is called cognitive dissonance. That’s a $5 way of saying that reality doesn’t match the Fed’s expectations so they’re attempting to avoid the inconsistency by explaining away, rejecting, and avoiding information that contradicts the narrative. A rational person would figure out what’s not working and change course.

Now is NOT the time to be a hero. Best companies ONLY. Marginal names are going to get shellacked, but the world’s best companies will survive.

If you’re an indexer or passive investor, you may want to rethink that premise. You own the financial version of cable TV rather than just the channels you want.

Speaking of which, I’ll be sharing a new recommendation later today in the September issue of One Bar Ahead™. Like most everything else, it’s been beaten down lately, but it’s still putting up great numbers and pays a healthy dividend, too. Plus, it’s “low-beta” which is a fancy way of saying those who own it will have a smoother ride than those who don’t. (Get the stock)

More evidence Apple’s killing Facebook

Facebook exists only because of the Cult of Zuck and Wall Street’s self-interest in promoting the illusion that the company is still relevant.

Apple’s ad tracking charges crushed revenues and net income. The former was down 1% in July alone while net income dropped -36%.

You ain’t seen nothing yet. Apple’s “ask not to track” button alone cost Meta $10B in advertising revenue last year. It’ll get worse.

A leaked memo suggests Meta wants to charge money to use Facebook and Instagram. (Read) Meta is already struggling with declining growth and user counts.

Sub $100.

Jobs “as expected” – don’t get fooled

The headline. Jobs came in at 315,000 versus expectation for 318,000 according to Dow Jones.

Why markets are up. Traders are betting that the Fed will maintain course because the report was “as expected” rather than raising rates higher and faster if it’d been too hot which was the worry coming into today’s session.

Do not get fooled. The big money will do its best to create another rug pull, meaning they will try to engineer a sharp, quick run with the express purpose of sucking in the unsuspecting. Then, they’ll pull the rug (again).

Instead, play steady Eddie. Know what stocks you want to own and why. Then relax, turn off the TV and step away from social media.

G7 could upend global oil markets.

The thinking. Politicians hope capping Russian oil prices will blunt Russian reserves and deplete its war chest by depriving Putin of valuable currency.

Big backfire potential. The policy could roil global oil markets, particularly if China and India are not involved. Remember, both nations trade with Russia so getting them on board is going to be a challenge to say the least.

This is fertilizer all over again. Global fertilizer prices went berserk when Russian/Ukraine supplies were limited on global markets under similar thinking.

What to buy/own. Stick with the oil majors. They’ve got deep enough reserves, literally, to overcome any short-term supply concerns. Investors will recognize that.

Slackers everywhere will love this

Employers turned to monitoring software to enhance productivity amongst remote workers.

Now there’s a $30 “mouse jiggler” that makes it look like you’re working when you’re not by creating mouse movement that prevents your computer from going into sleep mode. (Read)

Thought bubble. Bad management resorts to monitoring. Great management builds on results because they trust people. Work for a great company or start one of your own.

Bottom Line

I’ve been involved with global markets for 40+ years. During that time, I've watched BS stocks go to the moon and great stocks go to hell.

It's much better to own overvalued stocks people want than great stocks people don't. But it’s always better to buy great stocks when nobody wants ‘em.

Most will never understand the nuance.

Let’s finish the week strong!

MAKE it a great day.

Keith