Worried about big losses? Look at this chart:

Good morning!

‍It’s nice to see some green on the screen as I type but I’m not holding my breath. I think it goes red by the time you read this. Yeesh!

Got plans this weekend?

I hope so because there’s more to life than the markets. Invite friends over for a BBQ or take a walk with loved ones.

10 out of 10 investors and traders recommend it!

Meanwhile, here’s my playbook.

Worried about big losses?

You’re not alone if you are.

Millions of investors are asking why they shouldn’t sell it all and run for the hills. I get it but here’s the thing …

That’s your emotions talking.

“Staying in” is exactly what you want to do if you can.

The data show a very different picture.

Take Berkshire Hathaway, for example.

Warren Buffett’s company has had 4 drawdowns since 1980 of more than 35%. Yet, the company has still managed to achieve a 19% annualized return.

My point: The markets go up and down over time. That’s how they work. Critically, large drawdowns – a $5 way of saying losses – don’t necessarily prevent fabulous long-term returns.

Emotions are what trip up most investors. So get those off the table as quickly as you can if yours are out of control.

Here are a few thoughts on why from a discussion I had yesterday with the fabulous Charles Payne who asked me about it on Fox Business. (Watch)

Take a hard look at this chart, especially if your nerves are getting the better of you.

Remember that the markets reward discipline.

Buy low and sell high is how you play the game.

Period.

This WILL pass.

But if you’re still worried about losses, I wrote a little report recently that may help you sleep better, Your 5 Minute Guide to Hedging.

Musk speaks (to Twitter employees)

As expected, Musk laid out plans to make Twitter something worthy of owning and he pointed to China’s WeChat as an example. "If we can recreate that with Twitter, we’ll be a great success," Musk noted.

I agree.

Musk also noted that the company needs to “get healthy” which many are taking as a sign that there are layoffs in the future.

I’d expect nothing less.

Buy or sell?: I’ll have a special update and instructions in this week’s One Bar Ahead AMAs a few hours from now. I apologize in advance for holding something like this back but putting that information out for free wouldn’t be fair to the One Bar Ahead™ Family, all of whom pay for first and early access to my research and thinking.

Understand this if you’re tempted to play Chinese stocks

Companies like JD.com and Alibaba are all on the move this morning.

Tread lightly.

They’re super tempting to Westerners who don’t understand how the game is played. (Read)

What you need to know: There’s a big difference between companies operating exclusively in China and under the microscope because they may not be in the peoples’ interest versus those operating globally with Beijing’s blessing because they bring interest to the Chinese people.

Two companies that will eat inflation for lunch

The White House has made big energy public enemy #1 lately.

The President is fond of stage whispering, “they’re not drilling” when he’s asked about high gas prices and members of his administration continue to double down on corporate greed.

Inconveniently, reality differs.

ExxonMobil invested $118 billion over the past 5 years versus a net income of $55 billion which resulted in a 50% increase in oil production over that time frame according to the company. Moreover, company lost more than $20 billion during the pandemic and had to borrow another $30 billion to maintain the investments needed to be ready for post-pandemic demand (Read)

Chevron is now the largest renewable energy company in the United States. (Read)

Put politics aside: The world will use more oil in 20 years than we do now. That’s reality.

If you don’t own big oil yet: Buy some. My choice is still Chevron for reasons that we’ve talked about many, many times. The company is investing heavily in renewable energy, has a lock on dinosaur juice, and pays a very healthy dividend. Plus, it’s a built-in inflation and recession beater.

Even after all the selling, it’s still up 43.16% since I recommended the stock versus the S&P 500 which has dropped by -19.32% over the same time frame.

$5 trillion reasons the Metaverse won’t be what people expect

Consulting giant McKinsey & Co has come out with a new report stating that global spending related to the metaverse could reach $5 trillion by 2030.

I think that’s conservative.

What to focus on: Most investors are caught up in everything that makes the Metaverse pretend – avatars, entertainment, and the advertising surrounding it – but the real money is going to be in industrial applications. (Read)

For example, companies like BMW are using the Metaverse to replicate warehouses and factories … then test hundreds of versions of layouts, logistics, manufacturing and more at almost no cost whatsoever.

Chipotle recently ran a build your own burrito mini-game in a Roblox (metaverse) campaign with rewards that could be used in the real world. More than 6 million people showed up.

Three guesses who’s gonna have great numbers in the next few quarters.

Why you should care: For all the hype around the Metaverse itself, the real profits will go to companies that find a way to bring that to the real world.

Sorry Zuck, your stock still isn’t worth the certificates it’s printed on.

Bottom Line

Take ego out of the game as early as possible.

Your portfolio will thank you.

Now let’s get out there and make it a GREAT day!

Keith