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Your Omicron playbook

Nov 30, 2021

Good morning!

The markets are going to be like an old-school country dance song in that there’s gonna be a lot of one-step forward, two-steps back for a while. That’s frustrating for many folks who are not used to it but doesn’t have to be for the simple reason that volatility creates opportunity .. and lots of it!

Here’s my playbook.

1 – Buy the best or you will regret owning the rest

Early scientific data suggest that Omicron isn’t as lethal as other variants but does spread much faster and more easily. That could change in an instant but for now, it’s what we’ve got.

You’ll want to buy the very best companies you can for the simple reason that everything else is a risk you don’t need or want.

Think in terms of those that are capable of growing sales and protecting margins when people are scared to go out or don’t want to. Microsoft (MSFT), for example, is a great place to start while BestBuy (BBY) is a logical avoid.

2 – This changes everything

Australia’s highest court has ruled that online publishers can be held liable for public comments made online. Frankly, it’s a long-overdue move that will prompt major changes in how companies engage the online world. CNN, for example, immediately restricted Facebook page access to Australian customers.

I think it’s only a matter of time before we see similar rulings or legislation here in the United States and in Europe. Companies will move ahead of time because the C-Suite simply doesn’t want the liability. (Read)

3 – AMZN will destroy FedEx and UPS within the next 5 years

I don’t know if you recall Christmas 2013, but I do. That’s the year last-mile delivery companies like FedEx, UPS and others failed to deliver Amazon’s packages in time for the holidays.

I said at the time that Amazon would take matters into its own hands and become one of the world’s largest logistics providers as a way of regaining control, boosting profits, and growing vertically. I also cautioned against owning FedEx and UPS because Team Bezos would ultimately destroy both by competing head-to-head. That day has come. (Read)

No surprise to me that the FTC has ordered both companies to provide supply-chain information. (Read)

Buy AMZN but think very seriously about continuing to own FedEx and/or UPS if you do. I own the former but not either of the latter for this very reason.

4 – Dorsey: not worth the brain damage

@jack is hitting the road which should not – I repeat NOT – come as a surprise. He’s steadfastly refused to shakedown users for every last nickel and dime. Twitter’s shares initially rallied on the news he was stepping aside but ultimately ended the day down nearly 3% when investors realized that the devil could be in the details or at least a board seat. (Read)

The official story is that Dorsey wants to move the company beyond its founders – namely him – but I think there’s a good chance he’s simply said ***it when it comes to the thought police, Australia’s recent troll ruling and more. I’d think seriously about the same thing if I were in his shoes.

Love him or hate him, Dorsey’s great at reading handwriting on the wall.

5 – Proof China’s not at the top of the food chain … yet

Turkey just abandoned the Lira in favour of the US Dollar in an effort to stem that nation’s currency crisis. It won’t work but that’s another story.

The real takeaway here is that Turkey has chosen the US Dollar to stabilize things, not the Yuan.

This tells me two things: a) China isn’t at the top of the global food chain yet and b) the country will redouble efforts related to the Digital Yuan as a means of attacking the US Dollar and by-passing traditional currency exchange systems. (Read)