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☕ JPow strikes again, here’s your next move

Feb 01, 2024

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Good morning! 👋

Fed Chair Jerome “JPow” Powell strikes again saying March rate cuts are unlikely. The markets, of course, tanked almost immediately.

This would be laughable if it weren’t so sadly predictable.

Here’s my playbook.

1- Take profits if you haven't already

On Monday, January 29th, I recommended to the OBA Family that anybody who fancied a speculative bet “consider buying a few SPY 02/05/2024 488.00 Puts which last traded at $2.71 per contract” at the time I penned that. Those same puts closed yesterday at $5.44 according to Yahoo!Finance, a quick 100.738% gain (but have since pulled back to $4 and change).

I also said that it would be an appropriate time to consider hedging using the specialized inverse funds I recommend. All three have held up their end of the bargain, rising nicely as the S&P 500 headed into the basement.

Now it’s time to take some money off the table.

Smiling is, of course, encouraged. 😊

2- Peloton offers dismal quarterly guidance

Honestly, I’m amazed that this company is still around.

At the risk of sounding like a broken record, putting a tablet on a bicycle just isn’t enough.

Management now expects sales growth by June. 🤦‍♂️

I’m not buying it and, for the record, never did or will.

Keith’s Investing Tip: Make it a priority to invest in companies making “must have” products and services the world cannot live without. Peloton is a “nice-to-have.” ‘Nuff said.

3- An Apple a day

This is the one I’ve been waiting for.

Apple is one of the single most widely held companies in the world which also means it’s among the most liquid, an advantage for savvy investors like us who understand why that’s important.

It’s also “must have” - which I just mentioned.

Wall Street analysts are going to fawn over the tiniest nuances, the vast majority of which don’t matter in the scheme of things.

Zoom out.

There's only one Apple and consumers can't buy enough of what it makes.. They snap up iPhones, watches, iPads every time there's a new release. Nearly half of all buyers are new to those products.
Services will be critical. The company has more than 2B installed devices around the world, every one of which is a source of new revenue even if they never made another iPhone. Services are also far higher margin offerings than hardware.
Then there’s India where Apple is about to kick Google’s asteroids and China where Apple continues to be the number one in-demand Western brand bling amongst ultra-picky Chinese consumers.
And finally, I am waiting with baited breath for anything Apple has to say about AI. I beleive this is the year that’ll happen and the stock will be gone like a rocket when it does.

You know what to do.

And, if you don’t or would like some help, I’d be honored. (Click here to join the OBA Family)

4- Meta on deck, El Zucko says sorry – sorta

I have long maintained that Silicon Valley’s socialratti are a bunch of spoiled brats who have never been held accountable or acknowledged responsibility for the chaos they’ve unleased on the rest of us.

Starting with El Zucko himself.

Yesterday, he was challenged to apologize to a packed Senate gallery filled with the families of those children who have come to harm because of Meta and, arguably, as the result of decisions Zuckerberg himself made with his executives. (Watch)

Call me crazy but the “apology” he issued fell dramatically short.

You may agree with me on this or you may not and that’s okay.

Our job as investors is to figure out what this means for Meta stock.

My expectation is that Wall Street will continue to defend the stock because, being the hypocritical crowd that they are, there’s a lot of money on the table.

Chinese retailers Shein and Temu may account for a significant portion of advertising revenue. I never thought I’d say this, but China could determine what happens next for Team Zuck.

Facebook is reach and frequency and – if you buy off on that argument – owning shares could be the thing to do.

I don’t and won’t, but fully recognize that I am evidently in the minority on this one.

Sigh.

5- Lewis Hamilton joins Ferrari

I’ve been a Ferrari fan for as long as I can remember and an F1 fanatic the entire time.

But this is something I’d never thought I’d see.

F1 sensation Lewis Hamilton – who may be one of the greatest F1 drivers ever – is apparently departing Mercedes to join Ferrari. Shares of RACE are up $34.53 and 9.98% as I write.

The move could a) signal a return to Ferrari's dominance on the track and b) catapult sales to an entirely new level in the showroom.

Race on Sunday, sell on Monday!

Of course, the fact that Ferrari expects higher earnings this year could have something to do with it too.