Take a deep breath, remain focused, play to win!

Good morning! 👋

Stock futures are little changed as I sit down this morning. All three are in the red, along with the bellwether US 10-YR, which has dropped to “just” 3.694%. Oil, of course, is up to $69.57.

My guts—and 43+ years of market-related experience—tell me that this may change by the time you read this. Wall Street is acutely aware that they’re behind the proverbial 8-ball, which is why I can easily envision ‘em getting on the gas.

Speaking of which...

Here’s my playbook.

Blinken says “cracks,” but I say “false flag”

The fabulous Stuart Varney asked me about the impact Russia could have on the markets this morning ahead of the bell, and my answer might surprise you.

Taking a deep breath on days like today makes sense.

Secretary Blinken says that the mutiny reveals cracks in Putin’s regime, but the far more likely and dangerous possibility is a classic false-flag operation. (Read)

If you’re not familiar with the term, a “false flag” operation refers to a covert action designed to deceive and make it appear as if it was carried out by a different party or entity.

What many investors fail to realize is that a false-flag operations can create geopolitical tensions or even trigger conflict, particularly in an oil-producing region, because it causes fear of disruption in the global oil supply chain, leading to increased uncertainty and higher oil prices due to concerns over supply disruptions.

Meanwhile...

1. Buy defense stocks, which have, not coincidentally, underperformed YTD; and,
2. Buy oil or at least oil companies with significant reserves.

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Never fear another bear market again

With headlines like the ones we’re seeing today and last week’s selling, it’s logical to fear a return to the downside.

Don’t.

Take a hard look at this chart I shared with interested investors and consulting clients in WI last week. Heck, pin it to your mirror or monitor... even your forehead if you like.

The markets have a very defined upside bias over time, which is why you want to be “in to win” rather than “not to lose” like everybody else.

Down days almost always give you the opportunity to buy quality stocks at discounted prices, allowing for potentially higher returns in the long run. More importantly, you cannot have buying without the occasional bout of selling.

The other thing to think about is that big down days—heck, even bear markets, for that matter—are a natural part of market cycles. History shows very clearly that the markets eventually recover and reach new highs.

You can absolutely use both to your advantage.

Wall Street’s at it again: $TSLA

This would be pathetic if it weren’t so true.

No scratch that... it’s still pathetic.

Much of Wall Street missed Tesla’s run, which is why they’re keen to load up or take profits and reload. So, they’re creating headlines intended to shake skittish investors off their game.

Goldman, for example, is out with a report downgrading Tesla “to neutral from buy”—whatever that means—citing the difficult pricing environment for EVs as well as Tesla’s recent run higher. Shares are down -1.9%, as expected.

This is NOT surprising, which is why learning to “read” Wall Street’s actions can be to your advantage.

Wall Street will deny it, but there’s a huge body of evidence suggesting that “the Street et al.” manipulates stocks by creating headlines for the investing public in order to influence market sentiment and drive stock prices in a certain direction.

By strategically releasing news or reports that align with their desired outcomes, market participants, big prop shops, traders, funds, etc. can create short-term volatility and capitalize on price movements for their own gains.

Anybody who learns to read the language has a huge advantage over time.

The reason most investors fail is because they do not have the structure of knowledge needed to overcome short-term market turmoil and remain focused on the longer-term picture.

Case in point, Tesla has returned 3,792.60% over the past 10 years versus the S&P 500, which has tacked on 173.06% over the same time frame.

There’s obviously no guarantee that this will continue, but there’s no guarantee that it won’t either.

I hope I’m smart enough to buy more shares!

AMZN reminds me of Wells Fargo

Back in 2016, it was discovered that Wells Fargo employees had secretly opened approximately 1.5M checking and savings accounts and more than 500,000 credit cards for customers without their consent. The Consumer Financial Protection Bureau (CFPB) fined the bank $100 million for that “widespread illegal practice.”

Now it appears that Amazon may have been operating from a similar playbook.

According to Fox Business, the company enrolled customers in its Amazon Prime program without permission... and then made it intentionally hard to cancel via “coercive or deceptive user-interface designs known as ‘dark patterns’.”(Read)

I’ve suggested you stay away from AMZN for some time now, and this only reinforces my contention.

Where there’s smoke, there’s fire, to paraphrase an old adage.

Putskies or bearish spreads may be interesting.

Hmmm.

NASA works with SpaceX on possible space station

NASA is planning to partner with seven companies as part of its Collaborations for Commercial Space Capabilities-2 (CCSC-2) initiative. One of the companies is SpaceX, which is being tasked with building an “integrated low Earth orbit architecture” involving its Dragon and Starship vehicles. (Read)

Some industry insiders have suggested that Starship may be big enough to make it a commercial space station. That’s HUGE, pun absolutely intended. 🤦‍♂️

In other related news, SpaceX just notified the FCC that it’ll start to use the second-generation Starlink constellation to beam internet data to customers. (Read) According to PCMag, Starlink has become so popular in the US that the company had to launch hundreds of additional satellites into orbit.

SpaceX is a private company, so there’s no direct investment (yet)... but don’t underestimate the indirect booster effect this could have on Elon’s other enterprises.

I, for one, am glad I own TSLA. Aren’t you?

Bottom Line

Wall Street is growing frustrated, which means that volatility won’t be far behind.

Don’t let that sway you.

The stock market is filled with individuals who know the price of everything, but the value of nothing.

—Philip Fisher

Value matters.

Let’s MAKE it a great day and a strong week!

You got this—I promise.

Keith 😊