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I worry about this household name

Jan 25, 2023

Good morning!

The doomsayers are out in full force this morning on fears of a recession. Frankly, the headlines make my head spin.

We’ve seen this playbook so many times that it’d be laughable if it weren’t so predictable.

Wall Street’s sole purpose is to separate you from your money. The big trading houses want you unsettled, uncertain, and emotionally charged because they know it’ll make their job easier.

Keep your head screwed on straight.

More than 70 S&P 500 companies have reported Q4 earnings, and 65% of them have posted stronger-than-expected results.

Invest in the best, ignore the rest!

Here’s my playbook.

MSFT: Let’s review what REALLY happened

The press is all over Microsoft saying that its guidance is “gloomy.” Call me crazy, but I didn’t hear that word once on the call. This is yet more sensationalist claptrap from journalists paid to attract eyeballs and boost advertising dollars on the websites and networks where they work.

Let’s review what REALLY happened:

Microsoft beat on earnings, which shows that it can manage expenses properly and prudently.
The growth of Microsoft’s cloud computing division, Azure, “slowed” to just 31%.
The company earned $52.75 million after taking a $1.52 billion charge to ensure that it takes care of the people it’s laying off and to consolidate leases.
More than 80% of enterprise customers use 5+ MSFT products—including more than 60% of the Fortune 500, which uses cloud-delivered Windows (as opposed to the desktop variety most home users are familiar with).
MSFT is the ONLY company with integrated end-to-end identity security, compliance, device management. Team Blue processes 65+ trillion signals a day!

If that constitutes failure in your eyes, then that’s on you.

MSFT’s 10-year total price return is still 952.8% while the information technology sector as a whole has dropped -27% over the same time, according to Finbox.

I know what I’ll be doing today.

Google’s layoffs impact thousands, including 27 massage therapists

CNBC reports that more than 100 people of 1,800 in California who were recently cut were from the company’s YouTube Campus in San Bruno, CA… including 27 on-site massage therapists. (Read) 🤦

Pain at the pump = profits in your portfolio

At the risk of sounding like a broken record, I’ve repeatedly encouraged you to buy Big Oil because demand was being improperly priced into the equation at a time when supply was really the issue. There’s a lot of upward pressure on prices, and I am no longer a lone voice in the wilderness. (Read)

Don’t let lower prices at the pump fool you!

My favourite choice has a lot of room to run as oil heads for $100 a barrel. That’s saying something considering it’s already tacked on 41% over the past 12 months while the S&P 500 has dropped -8.92% over the same time frame. Upgrade to paid

Possibly the best dividend you can buy

One of the surest ways to protect against a recession is to buy great stocks kicking off gobs of income. Growth is a bonus.

Altria (MO) is a popular choice, but I worry about the negative impact of healthy living on share prices over time. But still, Altria has raised dividends 53 years running and has an astounding 8.39% yield as I type.

That’s why I’d rather build my stake in other key dividend producers where there is relentless demand for the products they make. Especially as our society changes. Case in point, I’ll be sharing a new recommendation next Friday, and there’s still time to get on board if you like. Upgrade to paid

OBAers: I’ll also be making an adjustment to the Fund Folio as a part of that. So please stay tuned!

This will be a $10B market in <7 years

345 million people in 82 countries around the world can’t get enough to eat. That’s up 155% from 135 million people in 53 countries pre-pandemic, according to the WFP. It’s a crisis of unprecedented scale, and population growth makes the problem worse. (Read)

Eating fake meat isn’t the half of it, though.

Bugs may be your new “scalable” protein.

The EU legalized the addition of acheta domesticus to be added to flour, bread, pasta, etc., as an “authorised novel food for the general population.” Yep, crickets. (Read)

Believe it or not, there IS an investment angle. The insect protein market may be worth nearly $10 billion just 7 years from now, by 2030. The projected growth rate CAGR may be 25%–30%.

I’ve got my eye on Ontario-based Entomo Farms, which presently offers products for human consumption and pet food applications. Here in the US, I’m watching Aspire Food Group, which rears food-grade crickets. They’re both private… for now.

In case that’s a firm “bleeeech” from you, consider this. There may not be a choice, which means traditional food prices—beef, chicken, fish, etc.—will go through the roof if those who want to enjoy “bug free” food pay up. I’ve got my eye on a few.