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There’s another bull coming, and you will miss it if you’re not buying this

Jan 10, 2023

Good morning!

The markets are under pressure again this morning as traders are forced to contend with the US 10-year yield, which has jumped 0.067% higher to 3.584% as I type. That’s not a lot, but it’s enough to force anybody at the margin to worry about margin.

Try not to let the headlines derail you if you can.

And remember who’s buying.

Warren Buffett added to several key positions in 2022 and even made several new purchases because, like us, he knows that’s how you play the game.

Chaos creates opportunity!

Here’s my playbook.

What to expect with bank earnings

Earnings expectations are so low, they’d pass for a limbo contest.

Higher deposit costs will likely cause execs to talk about how they intend to line up new sources of funding. I see that counterbalanced by weaker loan demand… unless consumers suddenly pile through the front door looking for loans. 🤦‍♂️

Loan loss provisions will tell us a lot about where banks think the economy is really going. Jamie Dimon remains the smartest CEO in the bunch as I noted earlier today on Mornings with Maria during a conversation with the super-savvy Jackie DeAngelis and the venerable Dennis Gartman. (Watch)

MSFT + ChatGPT = nail in Google's coffin

MSFT plans to invest $10B in the ChatGPT creator, implying a $29B valuation. The way I read the headlines, MSFT plans to integrate ChatGPT, or elements of its logic, into programs like Word. Will the software company produce a “dumb” version just for classrooms so that students can’t use ChatGPT to cheat? Certanly begs the question.

MyPOV: This is also another nail in Google’s coffin when it comes to search traffic dominance. (Read)

I think there’s a great pairs trade on offer. Long MSFT/Short Google.

Social media lawsuit: What took so long?

Seattle public schools are suing social media giants saying that their platforms have a negative impact on students’ mental health. (Read)

The only surprise here is that the lawsuit took so long to launch.

My two cents: Silicon Valley has been inhabited by a bunch of spoilt brats who have never owned up to the destructive and divisive nature of the technology they’ve foisted upon the rest of us. Whether they win or not, the lawsuit is looooonnnnnggg overdue, IMHO. It’s also why I won’t touch Meta with a 10-foot pole anytime soon. I still think the stock will hit $50 a share.

Too bad Lambo is owned by VW

Lamborghini set record sales in 2022 and is sold out until 2024. The company’s Urus SUV represents more than 50% of sales, with 5,367 out the door. Keep in mind these things start at $229,495—of course, it’s a twin turbo and does 0–60 in 3.6 palm-sweating seconds, so there is that.

Amazingly, Lambo is sitting on an 18-month waiting list and already has 3,000+ orders for the Aventador hybrid’s successor, according to Fox Business. (Read)

I’d love to buy shares, but Lamborghini is owned by VW. Ferrari, though…

REMEMBER: Money is like water—it will flow to where it is treated best. Luxury goods at the extreme upper end of the scale can be an ideal place to start, even in a recession.

There's another bull market coming, and you will miss it if you don't buy

People tell me constantly that they’ll buy XYZ when they get the chance, only to balk when the time comes. Especially when it comes to all things digital.

This makes no sense whatsoever because the business case for owning this stuff is stronger than ever... and getting stronger by the minute as our world digitizes.

Many people like the Zscaler Zero Trust Exchange because it helps protect cloud-based information by controlling access. The stock is down -62% over the past 12 months—at a time when gobs of companies MUST update their networks.

I prefer a competitor because it works by detecting and responding to threats in real time. That, and it’s held up better under super-challenging market conditions having fallen “only” -50% over the past 12 months. Plus, it is the “cheapest” in terms of valuation, which means it could bounce back fastest when the time comes. Upgrade to paid