What nobody’s telling you about yield curve inversions

Good morning!

‍The markets are down in early going as traders try to choose between getting on the gas or tapping the brakes.

Makes sense.

The economy is breaking as consumers fight to keep their heads above water and retail sales growth is sluggish at best.

Just don’t let it throw you.

• The world’s best companies continue to put up the numbers.
• The world's best investors are buying.

Snapping up shares when everybody has kicked ‘em to the curb is EXACTLY the move to make even if there’s more selling ahead.

Slow down your buying, change your tactics, and refine your shortlist but whatever you do, keep playing offense!

Here’s my playbook.

What nobody is telling you about yield curve inversions

Loads of people have been yelling and screaming about yield curve inversions as a harbinger of doom because they “precede recessions.”

They’re right but guess what? Yield curve inversions also precede the end of Fed tightening cycles.

Don’t get caught “out” of the markets, especially now!

Rail crisis aversion trade idea

The numbers are staggering. A strike could cost this country $2 billion a day or more.

Rail stocks are on the move, including UNP, CSX, and NSC, following news that there’s a tentative agreement to prevent the much ballyhoo’d rail workers’ strike. (Read)

Trade idea. Not sure there’s much more than a short-term move higher on the table but longer term they could be great choices considering that rail moves 27% of US freight.

Ethereum merge: Nothing seems to have broken

The long-awaited Ethereum merge has taken place and nothing seems to be broken … so far. (Read)

What’s happening. The merge fundamentally changes the way ETH secures its network and verifies transactions. It also shifts from what’s called proof of work to proof of stake.

Optics. The real benefit is intended to be a more secure, dramatically more efficient protocol. However, it’s not an accident that slashing energy consumption by 99.95% will go a long way towards appeasing the White House, climate change warriors and institutional investors who didn’t want to run afoul of either.

Ether is up to $1,640 as I type.

If you can’t beat ‘em, buy ‘em

Adobe has just announced a $20b acquisition of Figma, a collaborative design tool that we use and love at the office here, and one which runs circles around Adobe’s own equivalent.

First, I hope they don’t butcher it. My teams and I use Figma and the last thing I want to see is a bunch of carpet-bombing emails, promotions and tie-ins to other Adobe products or Amazon-like intrusiveness.

Second, this is more proof that the days of hunting for small under-the-radar stocks is over. It used to be that you could buy shares in small companies like these when they first IPO’d then hold as they grew. Now, though, most cash-generating startups get acquired by the bigger dogs a la Apple, Microsoft, Google, and Adobe before they see the light of day or go public. And because it’s basically impossible (and highly illegal) to get insider information ahead of these acquisitions, buying the big dogs makes more sense than ever.

Please join me in Orlando

See you in Orlando this October 30 – November 01 for the MoneyShow.

‍I’m honoured to be first out of the gate when the conference starts. I’ll be sharing my thoughts on How to Get Ready for 2023! Hope to see you there, as always! (Register here and get 20% off)

Bottom Line
If you have the guts to be an investor or trader, buying stocks isn't something to fear.

Learning "how" can make all the difference.

If I can help, let me know.

MAKE it a great day!

Keith