Play offense … or get played by somebody who is
Aug 20, 2021Good morning!
Futures were down overnight but flat ahead of the open. All the usual stuff is in play including a potential Fed tapering, and fears of another economic slowdown related to the rapid emergence of Covid variants. Companies like Apple, Charles Schwab and others are now delaying a return to offices until January. More will follow.
Here’s my playbook.
1 – 5 easy ways to protect your money
I wrote a special Five with Fitz yesterday. Please read carefully if you have not already done so. It’s a simple 5-step plan any investor can use to protect his or her money from what’s happening and from the Fed, in particular.
Let me repeat that … ANY investor or trader.
Click here if you prefer to watch the video version
2 – Play offence… or get played by somebody who is
Volatile markets are scary – I get that. But they’re also a dynamic source of profit potential. The world will be a very different place 3-5-10 years from now and that’s what you want to focus on if you can.
There are dozens of ways to harness the volatility.
You don’t just “have to buy stocks” like most people think. Some of my favourite tactics include using LowBall Orders, Selling Cash-Secured Puts, buying inverse funds, or using spreads. Things that can dramatically put the odds in your favour, not Wall Street’s!
If you don’t know how or what these terms mean, LEARN! It’s not difficult and absolutely worth the effort. The last thing you want to do is squander the opportunity, even if there’s more selling to come!
Here’s my take with the fantastic Charles Payne (and my shopping list, too)
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Anybody can pick stocks but knowing HOW to buy’em is critical
Education is key. I’ve always believed anybody can be a fabulously successful investor or trader with the right perspective, knowledge, and tactics at their fingertips. That’s why I spend a tremendous amount of time educating the One Bar Ahead™ Family. Knowledge isn’t just power as the old saying goes. It can be a profitable advantage.
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3 – AMC’s CFO dumps $1.5 million in stock
SEC documents show CFO Sean Goodman sold 45,405 shares of stock for estimated proceeds of $1.5 million. Ordinarily I wouldn’t give a second thought because “liquidity events” happen all the time. I don’t know if this was a pre-planned sale but assume it is.
What makes his sale suspect in my mind is that he’s done so after a supposedly “transformational” Q2 and raising $1.25 billion in new capital. I also find his actions curious considering that he’s sold ahead of a new policy CEO Adam Aron intends to float to the board requiring vested shares over a several year time frame.
Something doesn’t pass the sniff-test here.
4 – Tesla-bot
Tesla CEO Elon Musk introduced a humanoid robot prototype at Tesla AI day earlier this week noting that the Tesla Bot would do work people don’t want to do. Lately that’s just about everything apparently - given the record number of job openings in America, but I digress.
The robot uses the autopilot system, cameras, programming and “all the same tools that were used in the car.” This further reinforces the point I’ve been making for the past several years … anybody who thinks Tesla is about cars at this point has already lost the plot.
Musk is one of very few executives on the planet with the smarts and the capital to back up his thinking. Underestimating him is a serious mistake.
$1,000 a share is not only doable, but probably conservative.
5 – China’s regulatory blitz strikes again
I mentioned to Stuart Varney a few weeks back that I’d sold every last Chinese stock I owned, and would not be going back anytime soon. His eyebrows shot up as I made my case.
The regulatory blitz continues, and Chinese stocks are getting hammered yet again.
Just yesterday, China’s Ministry of Industry and Information Technology (MIIT) “rebuked 43 apps, including Tencent Holding's WeChat messaging app, for illegally transferring user data” as reported by Fortune.
Even scarier, President Xi Jinping said that the CCP is considering measures to redistribute the wealth accumulated by tech leaders and other highly successful entrepreneurs. US regulators are a walk in the park compared to what’s happening there.
I’d think very, very seriously about what you’re hoping to accomplish if you own Chinese stocks or ETFs at this point. Diversifiers are arguing that the stocks are so “beaten down” that you’ve simply got to invest or something similar.
No, you don’t.
Beijing does not care how much of your wealth gets destroyed!
The big money is liquidating Chinese holdings and rotating money back to US alternatives which is helping prop up our markets. The last thing you want to be doing is spending your cash on their trash.
Bottom Line
Many people worry about how far stocks can fall when the selling starts.
Flip that around.
The biggest bounces often come from quality stocks that get hit hardest.
Your job is to make sure you know how to find 'em!
You got this – I promise!
As always, let’s make it a fabulous Friday.
Keith
PS: I’m super excited to be speaking to the AAII Greensboro Chapter tomorrow morning at 10am EST. My topic could be just the ticket if there’s more selling ahead: Three Stellar Stocks to Buy After the Next Big Sell-Off. Sign up via the AAII website. I’d love to “see” you there!
