☕ This dividend monster may finally have bottomed

Good morning! 👋 

Futures are down and NOT because of earnings.  

Traders are simply taking a step back before Fed Chair Jerome “JPow” Powell does his thing. 

The concern is one we’ve spoken about many times... that stickier than expected inflation data will cause the Fed to be “slower to lower.” 

If you’re just joining us, that may not make sense. 

Here’s the quick version... what’s really happening is that all the traders who borrow gobs of money to magnify their returns are coming to terms with how much higher rates will cost ‘em so they’re deleveraging to lessen the vig. 

The markets will adjust and that’s almost always an opportunity for savvy investors. 

Here’s my playbook 

1 – AMD: Can you spell “rug pull?” 

This is as predictable as it gets. 

AMD says it’s going to sell $4B which is in line with expectations, but the stock sells off anyway because the “street” doesn’t like that??!! 

Gimme a break. 

It’s a classic rug pull (and don’t say I didn’t tell you that was coming because I did earlier this week). 

Now what? 

Volatility has risen substantially which means that anybody interested in Selling Cash Secured Puts (to go shopping and get paid doing it) can potentially line up a nice pay day. It’s a high probability trade idea you don’t see very often so when you do....

MyPOV: It’s not enough to know “what” to buy these days. Serious investors and traders need to know “why and how” too. We talk about that in One Bar Ahead® regularly and I’d love the opportunity to earn your trust, goodwill, and business. (Learn more if that’s helpful) 

2 – Amazon: (I) missed it by that much 🤦‍♂️ 

This is also right outta the department of the obvious. The company widened profit margins substantially and profits tripled. (Read) 

I suggested buying puts into the close yesterday if the stock was tracking higher... only it wasn’t so I didn’t. 

Wish I had. 

The stock had a quick pop after hours and may now drop. 

That’s how trading goes and not a big deal. 

You win some, you lose some. 

Either way, there’s always another turn at bat. 

Keith’s Investing Tip: Many people get upset when they don’t get a shot at stocks they want because they’re more concerned about being right than they are about being profitable. It’s not uncommon to take several swings at a stock you want before you connect with it and you wind up with a position you like. 

3 – Big government = small wallet 

CVS Health is getting hammered after missing on both the top and bottom lines. 

That's not the real story. 

Operating income dropped 60% YoY. (Read) 

Sixty flipping percent! 

That takes some talent. 

Management is blaming the drop on increased Medicare utilization which is undoubtedly correct but not the right attribution in my mind. Management didn’t manage higher costs properly. 

This is more evidence that big government equals small wallet. 

If this were a stock that interested me, I’d take advantage of the drop to line up a pop. But it’s not. 

Short or avoid. 

4 – Don’t look now but this dividend monster may finally have bottomed 

Pfizer increased its profit outlook saying that cost-cutting initiatives and strong sales within non-Covid segments are hopping. Revenue topped $14.88 billion. (Read) 

This stock is a fav with the “yeah, but” crowd so use that to your advantage. 

5 – Another reason to take AI seriously (and buy MSFT) 

People still don’t take AI seriously which is why they continue to look at companies like Microsoft with suspicion. 

I’ve told you repeatedly that the company is struggling to keep up despite investing billions. 

Here’s another clue. 

Team Nadella signed a deal with Brookfield Asset Management to invest $10B to develop 10.5 gigawatts of renewable energy capacity between 2026 and 2030 for use in its data centers.  

To put that in perspective, CNBC reports that the deal is 3X the existing 3.5 gigawatts consumed by data centers in Northern Virginia, the world’s largest data center market. (Read) 

Bottom Line 

Risk is the price you pay for opportunity. 

As always, let’s MAKE it a great day. 

You got this – I promise. 

Keith 😊 

PS: There are still a few seats left at next week’s Investment Masters Symposium in Silicon Valley. I will be speaking twice, hosting once. I hope you’ll join us. Click here to learn more!