☕ Should you buy Reddit and what to make of DOJ v Apple

Good morning! 👋  

Wall Street is headed for a winning week despite a slip in early going. 

All three indices have notched new records recently much to the consternation of perma-bears and the doom and gloom crowd. 

As I noted earlier this week, I think the Fed’s latest remarks could be a “train leaving the station” moment.  

The world’s central bankers are undoubtedly talking behind closed doors or on their version of the “Bat Phone.” Chances are better than average they’re all going to cut at some point. 

Still, don’t make the mistake of thinking it’ll be smooth sailing. 

DO plan on being invested. 

If you’re feeling paralyzed or uncertain, recognize that’s a) normal and b) you’re not alone. 

Concentrate on what it takes to win. 

That way you can think about how to make it happen rather than worrying about all the reasons you couldn’t or shouldn’t get started. 

Here’s my playbook. 

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1 – Will the DOJ sue McDonalds next because they don’t have Burger King on the menu? 

The DOJ’s case against Apple is so misguided and so dimwitted that it’s an insult to actual dimwits. 

I picked up a few extra shares yesterday and didn’t mince words when the super-savvy Liz Claman asked me about it. (Watch) 

Apple has built one of the most successful companies in history by creating one of the most popular products in history, the iPhone.  

What’s next? 

• Are they going to sue Ford because Chevy parts don’t fit? 
• Will they go after McDonald’s because they don’t allow Burger King on the menu? 
• Or penalize Delta because it won’t carry United’s passengers? 

I’ll have a breakdown and a few recommendations in today’s OBA AMAs.  

Btw, you can join the party by clicking here if that’s of interest or if you’d like some help sorting out today’s challenging markets. I don’t believe in slimy marketing so let me just say I’d love the opportunity to earn your trust, goodwill and business. 

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2 – Reddit: should you buy it? 

Reddit shares popped nearly 50% yesterday when it IPO’d on the NYSE at the very top of its range. 

Should you buy it? 

That depends on how you see the company. 

Reddit is often described as social media for people who hate social media.  

What makes it different is that the content is socially curated and promoted by voting, the goal of which is to send highly-thought-of stuff to the front page. 

MyPOV is that it’s an n+1 company and probably a pretty darn good one at that. 

I prefer “zero to 1” choices, to borrow a term from billionaire Peter Thiel. 

My $0.02 is simple. 

IPOs are a huge con game.  

To be fair, they weren't always that way. Proven companies often “went public” because they needed money to grow operations, build new products, services and more. You could make a buck if you bought in. 

These days IPOs are an insider’s exit. More often than not, companies going public “might” make a profit somewhere down the line but are still losing money hand over fist. What's more, the offering is rigged so that insiders, early investors, lawyers and bankers collect huge riches when the public gets duped, err, invests. 

I suggest you give any company that goes public these days a few quarters to prove itself. Then if does and after the hype dies down, decide. 

Including Reddit. 

Keith’s Investing Tip: There is NEVER a rush to buy anything in today's markets. If you’re a trader and after the fast money, you’ve got to act more quickly but that’s different. If you’re an investor, you can act calmly and deliberately. 

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3 – FedEx pulls a hat trick 

FedEx put up some great numbers yesterday while also announcing a $5B buyback. (Read) 

Shares jumped considerably overnight. 

Talk about a hat trick! 

Millions of investors are betting that the company will continue to track higher but I’m not on board with that program just yet for three reasons: 

1. The company doesn’t know if it has a new contract with USPS; and, 
2. The overnight delivery unit continues to struggle with falling volumes as customers shift to more economic ground transport options. 
3. All the cost cutting in the world won’t matter if Amazon presses. 

Trade Idea: Consider a few ATM putskies or bearish spreads if there’s a counter-trade brewing. The herd almost always gets ahead of itself in situations like this. 

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4 – Airbus dreading a “Boeing” moment 

CFO Thomas Toepfer told CNBC that the company is “not happy” with the issues Boeing is having. (Read) 

I wouldn’t be either – it's bad for the entire industry. 

Meanwhile, the pairs trade I suggested continues to track. Airbus has returned 18.93% YTD while Boeing has lost –26.93% over the same time frame. 

That gives me an idea. 

Toepfer’s comments make me think it might be time to bet on a reversal, meaning buy Boeing and consider shorting or avoiding Airbus. 

Here’s why. 

• The investing public is hyper-sensitized to aircraft problems at the moment which means that any incident Airbus could experience may lead to a violent market reaction and quick selling. 
• Management that is focused solely on prevention risks could be neglecting other important aspects of its operations that, in turn, can lead to unintended consequences or new problems that are not currently visible to the investing public, or to Airbus management itself. 
• Finally, a singular focus on prevention often reduces management flexibility when it comes to responding to dynamic or unforeseen instances because valuable resources that would otherwise be brought into play are already committed to specific preventative measures rather than adaptable strategies. 

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5 – Failing kidney? You might get an oinker 

I’ve been following the gene-editing industry closely for quite some time now because I believe it will play a massive role in the ongoing development of customizable medicine. 

Specifically, what we are learning about editing genes will allow for new, previously unknown or even unthinkable medical advances. 

Like receiving a pig kidney if yours are failing. 

Science fiction? 

Nope. 

In fact, surgeons just implanted a gene-edited pig kidney into a living patient for the first time. (Read) 

Imagine what happens when we combine AI, 3D printing and gene-editing! 

I’ve already recommended a cutting-edge gene-editing company to the One Bar Ahead® Family and there will undoubtedly be more as this continues to play forward. Upgrade to Paid 

Invest accordingly. 

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Bottom Line  

Anybody can pick stocks.  

Knowing how the game is played is what gives you the edge.  

Learn. 

Because that’s how you get ahead and stay there! 

As always, you got this. 

Let’s finish the week strong and MAKE it a great day. 

Keith 😊