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Why I want more shares after the froth settles down

Jan 31, 2023

Good morning!

Earnings roll on, with some impressive numbers this morning from the likes of GM and MCD.

Will I be buying?

That’s the question the fabulous Maria Bartiromo put to my good friend Ray Wang and me during an early-morning Word on Wall Street. (Watch)

Here’s my playbook.

MCD smashes expectations

MCD posted super-strong numbers this morning, easily topping Wall Street estimates.

No surprise. Inflation-strapped consumers have given up on their fancy-pants restaurants and are increasingly up for Big Macs, McNuggets, and more as budgets get tighter. Shares are up 5.8% over the past 12 months versus the S&P 500, which has dropped 9.9% over the same period, according to Yahoo!Finance. (Read)

I’ll let the froth die down, then consider a run at ‘em. The company is a long-time fav of mine, but I missed the most recent run because I thought consumers would prove to be more fickle than resilient, and I underestimated the Clown’s resolve.

Thankfully, the markets move in both directions!

LowBall Orders or Selling Cash-Secured Puts steep and deep could work nicely.

UPS doesn’t deliver

UPS posted mixed results by biffing the top line but exceeding EPS estimates for the bottom line. Some of the numbers that stand out to me: UPS’s supply chain business revenue fell -18% while freight-forwarding volume dropped at the same time. International shipping revenue also fell -8% as volume dried up. (Read)

I’m not surprised. In fact, I warned you specifically about this months ago. The company will face severe pressure in the years ahead as costs rise, the world goes increasingly digital, and volume-based shipping declines. CEO Carol Tome agrees, BTW, which is why she has chosen to focus on a “Bigger Not Bigger” strategy as she attempts to defend margins.

Not buying it.

FDX is at risk too… just in case you’re wondering.

What I would give to get my hands on Twitter shares right now!

Elon Musk wants you to use Twitter to pay for schtuff—and I think it’s a great idea. (Read)

Naysayers are gonna get shellacked yet again.

What I would give to get my hands on Twitter shares right now!

OBA Perspective: Love’m or hate’m, the one thing you’d think people would have figured out by now is NOT to bet against the man.

Tesla’s 10-year total return is a jaw-dropping 6,566.40%, even after all the selling. That’s an average annual return of 52.107%, according to averageannualreturn.com. It’s also enough to turn every $1,000 invested on January 31, 2013 into $66,648 as of last night… even after all the selling!

There are very likely 10–15 “Teslas” out there right now, perhaps more. Upgrade to Paid

Be “in to win” or you won’t… win!

EXXON made $6.3 million per hour

People ask me all the time why it pays to “invest in the best and ignore the rest,” especially when it comes to big trends shaping our planet.

Simple.

The best companies continue to put up great numbers, despite economic conditions and headlines that threaten to derail lesser choices. Case in point, Exxon just posted record profits of $56 billion for 2022—or $6.3 million per hour—according to Reuters. (Read)

I like another major even better, though. One Bar Ahead® Family members who are following along as directed just had the opportunity to capture total returns of at least 107%. BTW, it’s still a great investment with plenty of upside to come, especially if you’re reinvesting—and I hope you are! Upgrade to Paid

Stocks bottom 6–12 months before earnings

Many investors are surprised to learn that stocks have historically bottomed 6 months before the economy, but in some cases as much as 10 months ahead of time.

Anybody waiting on the sidelines is at severe risk of never catching up. If the data holds like I think may be the case, that points to last October’s lows as the turning point. I can understand why many folks feel like there’s another shoe to drop, but the daunting reality is that those same folks have already missed a 12.3% run up in just a little over 3 months.

REMEMBER: Many people want to be “right,” but professionals and savvy investors know that they can be profitable even if they’re wrong!