Morning! 5 with Fitz - 01/12/21

Keith Fitz-Gerald

January 12, 2021

Good morning!

The markets are like an old-fashioned country song lately … two steps forward, one step back … shuffle, shuffle. Next thing we know the pickup truck will work, the dog will come home and the rain’ll stop. That’s what happens when you play one backwards, or so goes to the old joke.

It’s too early to break out the bubbly, though.

My guts tell me that yesterday’s selloff was a taste of the profit taking that I think could still be out there. Some consolidation would be entirely normal and I’m thinking 2-5% would set things up for the fabulously strong tail end of this year.

Here’s my playbook.

1 – Money doesn’t do politics, but politics thinks it does money

Many investors and traders I’m talking with tell me around the world tell me they’re encouraged by the notion of a Biden economic plan but not for reasons you might think. They don’t like Democrats nor Republicans per se, what they’re focused on is the possibility of “free money” for everyone. Everybody knows the debt is disastrous and the policies will be radically different. What they – the markets – are hoping for is something that’s not overtly punitive.

Meanwhile, I’m keeping my hedges in place and, importantly, warming up my “buy” list!

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2 – Musk has only 1% of the car market and is already the world’s richest man

Pierre Ferragu of New Street Research says Tesla could be the largest car maker in the world by 2030 and, I agree. But that’s only part of the picture.

Tesla, like Apple, will no longer be defined by the products it made when it started. So it’s important to stop thinking about Tesla “like a car maker.”

Tesla is about rewiring the entire electric system – that’s why Elon Musk is so very terrifying to so many staid CEOs in industries ranging from cars, to space travel, to power grids. He is completely rewriting the rules and is the very definition of a “UII” company (as outlined in the most recent issue of One Bar Ahead).

You ARE getting left behind if you are not on board. Buy even a share if you have to … $1,000 a share is the next stop, although not in a straight line.

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3 – Walmart to create new fintech firm

Bang … right on cue. Walmart is going to team up with Ribbit Capital, the money maker that backed Robinhood and Credit Karma, to create a new fintech startup. I’ve got about a dozen firms I’m tracking right now and they’re all going to play in one way or another.

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4 – The real reason Beijing clamped down on Jack Ma

A few years ago, I suggested that China would develop the world’s first nationally backed digital currency and, it would appear, that I was right. China is now testing a digital currency by creating a lottery to give customers access to a few Yuan they can spend anyway they want … digitally.

This is also why the Alibaba/Ant Group situation is so critical. Jack Ma threatened to derail Beijing’s digital plans singlehandedly. Bitcoin is a play to get away from national currencies but China’s digital experiment IS national currency.

Big difference!

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5 – Social silence (and what to buy now)

Facebook, Twitter, and other stocks are on the rebound this morning following heavy handed censorship of President Trump and other conservatives. I wouldn’t buy either, frankly.

Social media stocks are going to be under tremendous pressure in the months ahead and I don’t see the fight ending favorably for investors like us. Traders and speculators, perhaps, but they’re simply too many headwinds.

Instead, concentrate on Apple (AAPL) which is building true social networking into its entire platform rather than just a platform. And, it has a moral compass.

An added plus, the company takes privacy far more seriously and, I might add, made the conscious decision to abandon the social media space for many of the same reasons.

Remember Ping?

Most people don’t and that makes my point nicely.

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Bottom Line

Don’t get distracted by the headlines. The biggest single risk at the moment is an emotional override that prevents you from lining up the next 10 years of profit potential.

I will be with you every step of the way!

Make it a great day,

Keith :-)

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