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☕ The only chart you need to see if yesterday's selling freaked you out

Feb 14, 2024

Good morning! 👋

The markets look to go green after the Dow suffers its worst session since - oh, I dunno - March 2023.

Shiver me timbers!! 🤦‍♂️

The lottery ticket mentality that drives today’s headlines is intended to draw you into the minutia when what you really want to do is step back and maintain focus on the bigger picture.

Don’t believe me?

I get that a lot so let me put it to you this way.

Did you see Warren Buffett, Ray Dalio or Ron Baron running for the hills?

Me neither.

In fact, I bet every one of ‘em took advantage of the downdraft to do a little shopping.

I did and certainly hope you did, too.

At the risk of sounding like a broken record...

When in doubt, zoom out!

Here’s my playbook.

1 – The only chart you need to see if yesterday's selling freaked you out

There are all kinds of reasons not to invest – rates, the Fed, politics, Russia, China, XYZ doing PDQ – but profits are always currency of success.

What the fruit loops are you waiting for??!!

Keith’s Investing Tip: It never feels like a good time to invest but history shows that it’s almost always a great time to invest.

2 – Lyft makes a $2B boo-boo

I haven't seen something like this in a long time.

Lyft initially stated its margin expansion as 500 basis points or 5% for 2024 and the stock jumped 60%. What they meant was 0.5%. (Read)

The company inadvertently exaggerated the increase by 10X.

Shares, of course, tanked when that became clear and, in the process, ultimately lost more than $2B which is staggering considering Lyft ended the day with less than a $5B valuation according to CNBC if my memory is correct.

MyPOV: The massive round trip – meaning up and down – highlights just how casino-like the earnings game really is. Do NOT play it, unless you’re a punter. Wall Street’s big traders have figured out how to game the system and you will lose dang near every time if you try to square off against ‘em. The far better and more profitable alternative is to trade like the big money, not against it, something we talk about all the time in One Bar Ahead® Upgrade to Paid

3 – What is it with airplane doors lately?

According to the FAA, a single engine Diamond DA 40 aircraft, carrying two people was midair when the pilot reported losing its door flying over upstate NY. (Read)

Meanwhile, Boeing’s orders and deliveries are apparently drying up. (Read)

I suggested a pairs trade mid-December – long Airbus and short or avoid Boeing – which continues to play out well. Airbus shares have returned 3.19% while Boeing has lost –17.77%.

Sadly, I continue to think that what’s happening could be the end of Boeing as we know it.

Meanwhile, continue to watch for a Chinese maker to offer a long-haul aircraft to global markets within the next few years. Using stolen – err, carefully researched – technology and specifications.

4 – So much for rate cuts?

The CPI came in hotter than expected yesterday which, of course, is like a big ol’ bucket of cold water on Wall Street’s hopes for a rate cut.

I’m not surprised.

As you know, I’ve been saying consistently that I thought the Fed would hold steady or even hike in Q1.

Invest accordingly
Best names only
Now is NOT the time to be a hero

Companies like Apple aren’t “hot” stocks and it’s a mistake to think about ‘em that way. They’re choices that will be there when you and your money need ‘em somewhere down the line.

MyPOV: I made the comment yesterday on Twitter that the market is the only store on earth where people fear a sale and that stands, especially this morning. The odds of a higher close tomorrow are 53.0% but the odds of a higher close 5 years from now are 82.9%. A decade from now, that number is 93.4%. I’ll take that bet any day especially when it comes to the big, world-class names we talk about frequently. Especially those making “must-have” products and services.

5 – Talking markets with the Cow Guy

Scott “the Cow Guy” Shellady is a super-sharp colleague and somebody whose analysis I respect tremendously. He very graciously asked me to spend a few minutes with him on his show yesterday on RFDTV.

We had a wide-ranging discussion I think you’ll find interesting. (Watch)

And, hopefully, profitable!