Don’t fall for it … short-term noise never beats long-term profit potential!
Sep 14, 2021Good morning from Las Vegas!
I’ve had a busy few days here at the MoneyShow teaching savvy investors how to find and buy stocks they love forever, trade volatility, identify the best REITs and more. I sure hope you’ll join me (and thousands of like-minded investors and traders) sometime at a future show if this kind of stuff is of interest.
Speaking of which, the markets are down despite a better than feared inflation reading and that’s par for the course.
Here’s my playbook.
1 – Short-term noise does not interfere with long term profit potential
You know the drill because we’ve talked about it many times. Short-term noise is just that … noise. The so-called recovery trade and stocks like BofA, GE and more are dead money. But choices like Apple, Microsoft and others are very much where you want to be … for the next 10 years or more.
2 – Musk outsmarts power-hungry regulators (again)
Regulators are hell-bent on preventing car companies from selling direct to consumers because it interferes with their version of reality and reduces their control. So, Musk recently opened a showroom in New Mexico on Indian lands where the regulators can’t touch him.
Frankly, I love it because this is exactly the kind of thinking that makes Tesla (TSLA) worth $1,000 a share even though it’s trading for just $746 as I type. Cathie Wood, incidentally, thinks Tesla is worth roughly $3,000+ a share so I may yet be conservative!
3 – Get a taco subscription
We’ve talked at length about how and why companies embracing the subscription model build in phenomenal revenue capacity. Now, Taco Bell is doing the same thing.
Wonder if you can go “long” hot sauce?
Taco Bell is owned by Yum Brands (YUM) which means the impact will be limited but certainly worth a look if it can mirror that across other offerings.
4 -Suddenly “everyone” knows a correction is coming
If I had a dollar for every time somebody told me that an “expert” was calling for a correction, I’d be sitting on a beach somewhere drinking something tasty. But I’m not.
Permabears have been wrong for more than a decade and I really feel for these folks. It’s tough to be so consistently on the wrong side of the markets knowing you’ve missed one of the greatest bull runs in recorded history.
The real takeaway and the one you want to focus on is that corrections are necessary and an important part of moving higher. They’re also a sign the markets are working normally.
Not surprisingly, what you want to be doing right now is taking profits on winning positions, tightening up stops just in case and, critically, thinking about what to buy “if” the markets pull back. At least in my humble opinion, anyway.
Thinking thematically helps and the 5 D’s we talk about are a great place to start.
-----
Playing to win is different than playing not to lose
The world is changing radically and that means you’ve got to adapt your thinking if you want to keep up. And critically, which stocks you buy if you want to get ahead.
Learn more
-----
5 – What to watch for in Apple’s new products
The vast majority of people are going to concentrate on gee-whiz features as part of the new iPhones, Apple Watches, AirPods and more but that’s not where the action is. For that you’ll want to think about what these things enable … higher margins, higher price points and higher subscription revenues.
And, if you just can’t get past the iPhone itself, here’s something to think about .. estimates suggest that nearly 250 million iPhone users (out of 975 million) have not upgraded in three years so there’s an entirely new upgrade cycle ahead, too!
I’ve said it before and I will say it again … Apple hits $3 trillion within 6 months and $200 a share. Wedbush’s Dan Ives recently said the same thing, albeit a few months after I did but the point is that I now have company for what many deemed an outrageous target at the beginning of the year.
Read more or watch Apple’s virtual roll out here
Bottom Line
Many people worry about the rise of technology because they fear it will eliminate their way of life and that’s a valid thought. However, things are different from an investing perspective.
The most valuable companies 10 years from now will be those that empower people to live better lives. Not make humankind obsolete.
Invest accordingly … and start today (if you have not already).
I will be with you every step of the way.
Let’s make it a GREAT day!
Keith :)
