The markets always have other ideas which is why…

Good morning!

Looks like I was premature in my assessment that traders would be comfortable with Powell’s mea culpa. Instead, the selling continues!

Here’s my playbook.

1 – The markets always reward discipline

There’s a lot of fear creeping in around the edges right now, but I want you to try hard not to let it get the better of you.

The markets always reward discipline!

Not sometimes, not some of the time, not part of the time … always!

Today’s headlines are scary but that’s just all they are.

News used to be about information but now headlines are intended to rile you, to make you upset, to get your attention and to click by playing to your emotions.

Wall Street knows this which is why they’ve continually tried to make it easier to “trade” as opposed to invest. HOOD, as in Robinhood, is a great example of what I’m talking about. The company makes most of its money by giving bigger, better-capitalized traders including dark pools access to order flow so they can separate you from your money.

Reality is different. The S&P 500 has produced a compound annual return of 10.9% for the past 50 years.

Let that sink in.

You know what to do!

2 – Rivian’s post-earnings selloff – cool!

Rivian has sold off after the company cut 2021 EV production expectations. (Read)

Now it’s time to take action!

Selling puts and a few well-placed LowBall orders could make tremendous sense at these levels. I’ve recommended both as a way to get settled in for the long haul.

There are really only three EV companies that matter and Rivian is one of ‘em.

3 – $100 oil … gee, where have I heard that before?!

Goldman Sachs is in the headlines this morning saying oil could hit $100 and that demand might reach a new record high in the next 2 years. (Read)

I thought to myself now where have I heard that before?

Oh, that’s right … silly me. I said so on national TV during a conversation with Maria Bartiromo on November 24th. (Watch) And I recommended Chevron last September to the One Bar Ahead™ Family in anticipation of the very same thing Goldman sees happening. (Learn More)

Chevron’s up 20.2% since, versus just 2.95% from the S&P 500 over the same time frame, giving everyone following along a juicy 17.22% advantage – alpha in Wall Street speak!

It’s not too late to buy but I sure wouldn’t wait much longer!

Energy is a continuum, not an on-off switch.

4 – Financials are a no-brainer

I am a huge fan of keeping it simple. The Fed will tighten and that means any stock that is even halfway challenged will suffer. The best, on the other hand, are where you want to be.

Financials are a no brainer.

They generate huge fees, benefit from higher rates and the best have world-class leaders like Jamie Dimon who understand how money really works.

My favourite is still JPMorgan.

5 – VC investments are already up 403.4% YoY

Many folks are still enamored with sector-based investing and that’s okay if you’re content to receive the same tired old drivel everybody else does.

I’m not.

Thematic investing is the future, especially when it comes to identifying the next great generation of millionaire makers. Tomorrow’s profits cross over multiple sectors which means you’ll miss the profits if you can’t see the bigger picture.

Like vertical farming, for example.

Tomorrow’s farms will go straight up and probably in formerly but now largely hollowed out urban cores. Abu Dhabi is giving $150 million in incentives to vertical farmers who build there. China plans for a 51 story vertical farm that will grow enough food to feed 40,000 people a year. (Read)

Other cities will follow, innovation will blossom and profits will grow … pun absolutely intended.

Bottom Line

Market success is about managing risk.

Not avoiding it.

You got this – I promise!

Let’s finish the week strong.

Keith