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☕ Moderna, a buy?

Sep 12, 2024

Howdy! 👋

After an early morning head fake to take out the weak hands, the markets are headed higher as I type.

Right on cue.

I’m very focused on the S&P 500 which would line up a 4th straight gain if this holds. And the Nazzy which is tracking because of all the tech. The Dow seems to be a dog for now, though.

My guts tell me they’ll flip flop by the time you read this, though. 🤷

Doesn’t bother me on iota.

Chaos creates opportunity!

Here’s my playbook.

1 – Looks like I’m not the only one who thinks Berkshire is baked

I told you that I was betting against Berkshire on September 4th because I didn’t like the chart and that Putskies (a bet that the prices decline) could be a great choice. (See #4)

Looks like I’m not the only one who thinks so.

Buffett’s been selling Apple and BofA. But news broke this morning that Vice Chairman Ajit Jain sold $139M worth of stock and reduced his ownership in Berkshire itself by 50%. (Read)

Jain, if you’re not familiar with him, is widely considered closest to Buffett so I’ve got to imagine this isn’t going to go over well with investors.

And yep, still putskies.

Berkshire A shares are down –5.93% while Berkshire B shares are off -5.20% since I initially penned that. The S&P, by comparison, is down too but just -1.64%.

Game on!

2 – Moderna, a buy?

Moderna shares have gotten clobbered this morning after the company slashed its R&D budget along with plans to scale back the company's drug pipeline. (Read)

I think it will find its footing pretty quickly.

Moderna is a key player when it comes to cancer care and, according to some, could rewrite the book. (Read)

Admittedly, I prefer a triad of players with stronger management, better research and expanding pipelines but that’s beside the point.

What you want to think about as an investor is an astonishing rise in cancers and other nasties that, I submit, will make tobacco pale in comparison when the lawsuits hit.

We are on the cusp of customizable medicine and it seems to me that’s a good thing because there will be an entirely new generation of millionaires created in the process.

3 – Boeing reminds me of Chrysler

CNBC is reporting that Boeing faces a strike if union employees don’t accept a tentative contract deal reached earlier this week. (Read)

The situation reminds me very much of Chrysler when Lee Iacocca walked into a tornado and reached a breakthrough deal with union employees that saved Chrysler by gutting wages, making key managerial changes, reintroducing production pride, quality and more.

Newly seated CEO Kelly Ortberg better “pull an Iacocca” and quickly if he wants to save the company.

The scuttlebutt here in Boeing’s backyard is that the unions are digging in ahead of the contract vote.

I think that’s shortsighted.

Boeing stock peaked at ~$440 in March 2019 and is trading at $160.35 as I write, a ~63% decline.

They’ll be lucky to have a job if the company can’t turn around and they’re not willing to help make that happen.

I also think there’s a very real possibility that Boeing gets booted from the Dow Jones Industrial Average (which is intended to track innovative companies at the core of America’s prowess).

No way, you say?

It’s happened before. ExxonMobil was sent packing in 2020 to be replaced by Salesforce.

Imagine the mental floss if Tesla is added as Boeing’s replacement??!!

Meanwhile, I have long told you to avoid/short Boeing and suggested buying Airbus instead – a pairs trade.

Airbus shares have returned 8.12% over the past 5 years while Boeing shares have lost -57.49%.

4 – VW feeling China’s wrath, more car makers will follow

I’ve summed up China’s global ambitions simply for years.

"The Dragon is coming to dinner on Tuesday; the only decision investors have to make is whether you’re at the table or on the menu."

VW is feeling the Dragon’s breath.

The company may close plants in Germany for the first time in history because of cost pressure and – ta da – rising competition from Chinese car makers and Chinese EVs specifically. (Read)

VW is also falling behind technologically speaking.

I suggest investors own at least one Chinese car maker but pick carefully because the game is just getting started.

Detroit’s next, mark my words.

Short, putskies or avoid American car makers save one.

Meanwhile, OBAers, stick to the plan – we’ve got this sorted. (If you'd like to join the OBA Family, I’m here and would be honoured)

5 – A dime worth $500,000+

There are only two dimes from 1975 that are known to lack the “S” representing the mint that printed ‘em and one goes up for auction. It’s expected to bring $500k, perhaps more. (Read)

Might be time to check the ol’ coin jar.

You?

Keith’s Investing Tip: Many people think in terms of gold, silver, and other metals when it comes to so-called alternative assets. Coins, art, old watches, stamps, fine wine and whiskey count too – pun absolutely intended. They can be a great portfolio stabilizer and fun to collect. Personally, I like the sense of history they provide and the stories they have to tell.