☕ Investors focus on earnings, traders focus on rates

Good morning! 👋 

Let's tackle the elephant in the room. 

Yesterday's inflation report came in higher than most economists expected, and the markets took a header. Today's wholesale report is less than expected. 🤦‍♂️ 

Where they hire these people and what constitutes “expected” is beyond me.  

Anybody who buys food, pays for insurance, takes care of family members, pays for medicine... a dozen other things... knows that prices continue to increase or at least remain stubbornly high. 

The average insurance bill is up 20%+ according to something I read recently. My breakfast cost 100%+ more than it did a few years ago. Try buying building materials, paying for a car repair. Education. 

Who the heck are they kidding??!! 

No matter. 

In fact, the only thing that matters is what we – YOU and I – are going to do about it. 

Time for some tough love. 

• If you sold stocks yesterday (and I hope you didn’t), you’re a trader.  
• If you rode out yesterday’s selling while buying a few shares (and I hope you did), you’re an investor. 

To be clear, there is nothing wrong with either.  

The point I want to make is that you don’t want to think you’re one and find out the hard way that you’re the other. 

I personally bought a few shares yesterday in many of the names we talk about frequently and which form the core of the OBA Model Portfolio. My plan is to do some more shopping today if the pre-opening euphoria wears off like I think it will. 

Call me crazy, but I can’t resist a good sale! 

Buying great stocks never goes out of style when they’re on sale, even if you’re not getting a “rock bottom” price. 

Think about that. 

While I didn’t particularly like all the selling any more than you did, I can’t help but have a huge smile on my face. 

Many of the dividend producers that form the core of the One Bar Ahead® Model Portfolio were green. Those that weren’t held their ground, falling less than the broader markets. 

People ask me all the time why I recommend the stocks that I do. 

There's a very simple answer. 

Because I’ve studied the markets for more than 40 years... what it takes to make money through and thin, which kinds of companies to buy, why and when. 

The cost of waiting for the perfect moment to invest often dramatically exceeds the benefit of perfect timing. 

I’ve learned that every stock has its own “DNA” - meaning a unique signature that defines how it behaves when things are good and, importantly, when things are rockier than we’d like. 

I know that owning three kinds of stocks – Foundation Stones, Global Growth & Income and what I call Zingers – is how you truly master your money. 

It’s a great mix –> more profit potential, less risk.  

No worries. 

Today’s markets don’t have to be complicated, but people make ‘em that way because they think that’s what they need to do. 

It’s bull---t. 

The real path to profits is simple, efficient, and effective. 

1. You line your money up with big sweeping themes backed by trillions of dollars that will get spent practically no matter what the Fed does next, who’s in the White House, or how Wall Street tries to jack the system in its own interest. There are just 5, btw and we cover’em in One Bar Ahead – the “5 Ds” 
2. You buy “must have” companies making products and services the world can’t live without. “Nice to haves” are a risk you don’t want in your portfolio, especially these days. 
3. You use the right tactics to constantly maximize profit potential and control risk as part of the buying process.  

Play to win! 

Anyway, this is a lot to think about. 

If you’ve got all this covered, fabulous – my hat is off to you. The vast majority of investors do not because Wall Street doesn’t want you thinking clearly nor independently like I do. Their m.o. is to keep you uncertain, unsettled and convinced there’s another shoe ready to drop so you’ll stay in the system. 

If you’d like some help and you’re enjoying the 5 with Fitz, perhaps you’d enjoy becoming a member of the One Bar Ahead® Family of investors that’s now 40+ countries strong and counting. You can learn more here. I’d love the opportunity to earn your trust, goodwill, and business. 

Speaking of which, I’ve taken up enough of your time today, so I’ll get off my soapbox now. 

Here’s a quick(er than usual) look at the “morning” 5: 

1.  Wholesale prices fell less than expected – Yesterday’s “hot” report is already in the rearview mirror as evident by the fact that wholesale prices came in at just 0.2%, less than expected. The 10YR fell and traders wasted no time getting on the gas – meaning buying. I expect the euphoria to wear off by the time you read this. LowBall Orders, Selling Cash Secured Puts or simply adding a few extra shares could be just the ticket, especially with tech today. Selling ATM covered calls could be juicy, too. 
2.  ECB signals rate cuts upcoming – central bankers are no different than a herd of cows. They like to believe that what they’re doing is thinking independently but today’s financial markets are closely linked which is de facto evidence they’re not. Where one (central banker goes), others follow sooner or later.  
3.  Walmart deploys autonomous forklifts – We have talked about this so many times but it merits repeating. The higher wages, accommodative work crowd had better be careful what they wish for because the only thing they’re doing is accelerating the introduction of robotics that’ll ultimately replace ‘em. Contrary to what they believe, management isn’t stupid. It’ll boost Walmart’s bottom line eventually; meanwhile, I’d rather own another big boxer which, btw, had a nice green day yesterday. 
4.  Dropping EV resale prices aren’t the real problem. American consumers didn’t used to worry about EV resale prices says the article. Now, they do says Pat Ryan, CEO of CoPilot, a free car-shopping app, particularly when they owe $50k on their $40k Tesla. Stuff like this makes me nuts... the real problem is financial literacy and debt. My good friend and personal financial expert, Suze Orman, told Chris Wallace in a recent interview that 95% of Americans lack financial literacy. I agree. Stop buying stuff you can’t afford then grousing about what it’s worth (when you overpaid in the first place)! Buy stock and a used econobox then laugh all the way to the bank as you build wealth. Repeat. 
5.  Bayer AG wants to save $2.15B - so it’s getting rid of 99% of the employee manual and eliminating middle management in favour of letting 100,000 employees self-organize. CEO Bill Anderson, who has been in charge since June ‘23 calls this “dynamic shared ownership.” Will it work? I dunno but the stock is down more than 50% over the past 12 months. Reminds me of “WeWork.” I can see bottom fishing – a punt really – at $2. 

 Bottom Line: 

If your investments are not working, the problem isn’t the markets, inflation, the Fed, China, or anything else. Chances are it’s the person looking out at you in the mirror who’s holding you and your money back.  

As always, MAKE it a great day! 

You got this – I promise. 

Keith 😊