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Many investors are making a mistake I haven’t seen since the Dot Com era

Oct 31, 2022

Good morning!

‍The markets opened to the downside this morning which makes plenty of sense given last week’s incredible run higher. Some profit-taking would be entirely normal.

The Dow, meanwhile, is on track for the best month since – drum roll please – 1976!

How can that be?

Simple.

71% of companies in the S&P 500 that have reported as of last Friday turned in an EPS surprise while 68% have reported a revenue surprise.

All eyes are on the Fed … the market believes that there will be a “pause” but I don’t see that coming. I think the Fed will be stupid enough to believe its own ____.

Here’s my playbook.

Not all tech is the same

Many investors are making a mistake I haven’t seen since the dot com era. They’re lumping “all” tech together.

Not all tech is the same. There are two kinds of tech. Tech that is growing because it is device-centric and tech that grew because it was socially centric. The former is the future while the latter is the past.

My thoughts with the fabulous Stuart Varney this morning ahead of the opening bell. (Watch)

Why the chip shortage matters (in ways most people don’t recognize)

I talk frequently about Keith’s Rule of the Backpage … as in the real investing and trading opportunities are found while news is still on the back page, not the front page when “everybody” knows something.

Take the chip shortage, for example. Many investors have reflexively dismissed this as old news. That’s a mistake. You’re probably using 2-3 dozen chips to read this. The chip shortage is so bad that even Toyota is giving out just one smart key, as opposed to two. (Read)

There are only a handful of chip makers in the world capable of rising to the challenge. I’ve recommended two in One Bar Ahead® and they’re poised for some serious upside. Upgrade to paid

Where does META go from here?

$50 a share.

End of discussion. (Watch)

Size matters.

Game on. Musk has accused the Twitter board and their lawyers of deliberately hiding evidence from the court system prior to his purchase. (Read)

If you had invested $1,000 in Twitter on November 7, 2013 when it went public, you would have made a whopping total of 22.10% or 2.25% a year. Your investment would have been worth $1,221.01. With that much money you could buy 76 Cookie Monster aprons according to finmasters.

Not to rub it in but if you had invested $1,000 in Apple on the same day, you would have made 848.68% or 28.46% a year. Your investment would be worth $9,486.80. And you could buy 9,486 tacos at Jack in the Box, also according to finmasters.

Keith’s Corner: There’s a reason why I insist investors “buy the best, ignore the rest.”

JPMorgan wants your rent

JPMorgan Chase wants your rent. The bank has created a digital payments system to link property owners and managers with their tenants. (Read)

I suspect what JPM really wants to do is get a handle on rent levels, occupancy data, and more. I see the information being used as a core element in JPM’s new credit score. Anybody owning Experian, TransUnion or Equifax better think twice.

Pairs trade idea: Try long JPM / short one or all of the credit bureaus.