Purple bananas

Good morning!

The Fed’s preferred inflation gauge rose more than expected in August.

Like that’s a surprise.

Comedy hour begins now.

Here’s my playbook.

It is still NOT TOO LATE to hedge

What’s happening. Inflation rages and, while slowing, is still running at 4.9% a year annualized. The Fed is warning about more hikes. Fears about China and Russia add to the nervousness. And corporate earnings season is around the corner. (Read)

There is ALWAYS a way to play offense.

• Hedge if you’re gonna
• Exit if you must
• Puts, inverse funds and volatility if you wanna dance.
• Add to long-term core positions very selectively (yeah, remember those?!?!)

Pessimists find it very hard to make money over time. Be an optimist.

$META: a “death spiral”

Meta is now trading at the lowest levels since 2019 and is one of the worst S&P 500 stocks of the year. TikTok has cleaned Meta’s clock and Apple’s iOS changes cost El Zucko at least $10B in revenue.

People thought I’d lost my mind when I said months ago that the stock was going sub $100. Now, the argument seems to be gathering steam with CNBC calling what’s happening a “death spiral.” (Read)

Wall Street may try to defend the stock using the imminent restructuring and hiring freeze as justification.

Don’t fall for it. The business model still stinks. To paraphrase Laura Martin, I’m not sure the company has a viable core business model that works anymore.

**TWK Subscribers: The Meta trade is starting to accelerate. Well done if you’re following along.

Google’s going heavy on shopping

Google has been on a shopping feature binge recently, announcing 9 more new features to turn their search engine into a fully shoppable experience. This round of updates includes new visuals like 3D shopping, recommended complementary products, Google Lens-based recommendations, and even the upsides and downsides of each retailer’s website user experiences. (Read)

Why you should care. Google’s move reinforces the notion of unified commerce. It also highlights the massive amount of profit potential up for grabs. BTW, I’ve got a new recommendation in the bullpen that taps into this if you’re interested. Upgrade to paid

What BofA really said about $AAPL

What everybody thinks BofA analyst Wamsi Mohan said, “Apple sucks.”

What Mohan really said, “shares have outperformed significantly YTD ... and have been perceived as a relative safe haven. However, we see risk to this outperformance over the next year.” (Read)

Translation. Apple is still a great company and we [BoA] continue to like it enough to keep a buy rating. We just think performance will fall in line with everybody else.

MyPOV. There is not another company on the planet making $105,116 a minute. Hopefully I am smart enough to keep my shares and buy more!

A share of $NKE now costs less than a pair

A tip o’the hat to my friend Sharmila who aptly pointed this out today on Twitter.

Why you don’t want to own it. Nike is the quintessential definition of a “nice to have” stock. The company is selling premium products into the teeth of a recession to frightened consumers who are struggling to make ends meet as inflation rages. That it has an inventory problem shouldn’t be surprising.

“Must have” stocks are holding up better, even though they too are under plenty of pressure and could fall farther.

Bottom Line

Everybody who calls you stupid for buying into declining markets – and there will be plenty of ‘em - will call you lucky down the road when you're living off the wealth doing so consistently creates.

Let’s finish strong!

Keith