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📝 I won’t be unloading my Microsoft any time soon

Dec 28, 2023

Good morning! 👋

Can the markets extend their run for just another two sessions before we charge into 2024?

Definitely possible.

But in my best Obi-Wan Kenobi voice…

I’m sensing a “disturbance in the force” overnight – meaning that I’m picking up on the potential for some short-term, pre-holiday shenanigans.

Here’s my playbook.

1 – Float like a butterfly, sting like a bee

Big traders have a lot of money on the table which is why I won’t be surprised if there’s some last-minute profit taking today or tomorrow. Particularly late in the day.

This is one of the rare times when a triple-leveraged inverse S&P500 or Nasdaq ETF could make sense as a short-term speculative bet. Buying ATM index puts could also be a tasty way to harvest any sharp downside move if there is one.

In both cases, I’m talking about a quick 1-2 punch.

In and out in less than 24 hours.

No exceptions and using speculative capital ONLY.

Like boxing great Muhammed Ali, the goal is to “float like a butterfly, sting like a bee.”

Keith’s Quick Tip: Short-term chaos is almost always a long-term opportunity. That’s why I encourage every investor to learn to trade around core positions, even if they never intend to do so. Acquiring this knowledge helps ensure the discipline you need for long-term success rather than falling prey to short-term chaos.

2 – NYT sues MSFT

The New York Times filed a lawsuit against Microsoft and OpenAI accusing both companies of copyright infringement and mass exploitation related to copyrightable expressions contained in its newspaper and the other materials. (Read)

What a mouthful!

The situation reminds me very much of record companies in the era of digital sampling.

The only reason this case may have merit is because it’s the New York Times and they have very expensive lawyers, a nearly bottomless budget, and the ability to go after two exceptionally high-profile targets.

Harsh?

Yes, but I have quite a bit of personal experience in this department which is why I have the view that I do.

People who have been following my research for decades know that I am frequently 6-12 months ahead of Wall Street and the major news outlets when it comes to financial analysis, company commentary and more.

My thinking, terminology, and even the way in which we operate our business is regularly ripped off – err, “borrowed” – by folks who shall remain nameless with no credit given whatsoever.

Anyway, that’s neither here nor there.

You and I both know what they say about imitation, flattery and all that jazz.

The point I want to make is one that we’ve talked about before and that this case now highlights perfectly… our legal system is not ready for AI and, apparently, neither are our ethics.

Practically speaking, I won’t be unloading my Microsoft anytime soon. My target is still $500 a share.

3 – You can buy an Apple Watch again

Millions of investors freaked when Apple had to stop selling its much-loved Apple Watches recently.

I told you it wouldn’t be a needle mover.

Now a judge has paused the ban on Apple watches temporarily (Read)

Shares of Masimo fell on the news while Apple’s stock remained flat, having returned 50.24% YTD.

Buy the best, ignore the rest.

4 – The perfect stock for income-starved investors?

Many investors have had it with energy. So, they are understandably skeptical when there’s an inexpensive stock on offer with a generous dividend.

Take Antero Midstream, for example.

The company trades at just $12ish a share but operates at a 61% margin and has a current dividend yield of 7.10% this morning.

The bet here is that improving financial stability, lower capital expenses and accreditive acquisitions could further reduce operating leverage. And, in turn, translate to higher share prices while kicking off plenty of cold, hard cash.

I don’t own it but could make the case that taking a look might be interesting under the circumstances.

5 – Gene editing = First step in customizable medicine

OBAers know all about my long-term interest in gene editing as a cutting-edge enabler for customizable medicine and emerging biotechnology because we’ve been talking about it for years. In case you don’t or have just joined the 5 with Fitz Family, here’s a primer.

There’s tremendous long-term investment potential. However, picking winners at this stage of the game is a lot like throwing darts at the wall. There are dozens of companies out there, each of which claims to have bottled lightning.

I am particularly interested in the use of precision gene-editing therapies that have the potential to transform health care with one-time cures. And, of course, the AI that will help make that a speedier discovery process.

I think it may finally be time to put a toe in the water which is why I plan on sharing my latest thinking in the upcoming January issue of One Bar Ahead®