Morning! 5 with Fitz - 02/23/21

Keith Fitz-Gerald

February 24, 2021

Good morning!

Futures are down again after yesterday’s big tech slide but that’s an opportunity many can’t see.

Here’s my playbook.

1 – Many investors claim to be waiting for a pullback but lack the discipline needed when they actually get one

It’s a common tale I hear frequently from anxious investors worried they missed ___’s big run or didn’t get a chance to buy into ___ right before it doubled/tripled/became a 10-bagger. Many claim to be waiting for a pullback but predictably fail to take action when one actually shows up … like now.

That’s understandable … fear is a powerful deterrent … but it’s also a totally fixable problem if you know which tactics work under what circumstances. Especially if you already know which stocks to buy thanks to the OBA 50.

Big pullbacks are great for buying low using limit orders and a tactic I call the “LowBall Order”, for example. They’re also terrific for selling deep outta the money cash-secured puts on stocks where volatility has exploded, and premiums have become considerably juicier.

Especially when it comes to big names you may have missed or want to own more of, like the three companies I noted yesterday during an appearance on Varney & Co.

Watch now

2 – “Be like Cathie” … Wood

Tesla is off 14% in 48 days because the company’s value is “tied to bitcoin” according to Wedbush’s Daniel Ives. I’m not sure that’s true but, interestingly, I did point the linkage he’s being credited with discovering out in last month's OBA Fascinators.

It’s always nice to have vindication!

Contrary to what many think, it’s not too late to make a big bet on one of the best tech companies in the business so I’m going to be adding to shares alongside Ark Invest’s Cathie Wood who told CNBC that the Ark Innovation Fund is continuing to buy. Not sure which tactics I’ll use just yet, though.

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3 – Yellen bags on Bitcoin

I jokingly said last week that if Bitcoin crashed, you’d know why … because I finally bought some. Well, I bought a bit more yesterday so, naturally, the digital currency is off again!!??

I’ve kept my positions small deliberately to minimize risk as a safeguard against exactly the kind of selloff that’s underway now. Critically, I am planning to dollar cost average in, now that the digital currency has lost 16% in the past 24 hours.

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4 – The $15 an hour crowd makes this problem worse

Pete Mutchler, energy director of Mission Solar Energy in San Antonio, Texas (a city I really enjoy, BTW), said that the US cannot compete with cheap Chinese solar panels which is a not-so-indirect slap in the face to the President’s Green Energy plans. It’s also a canary in the coal mine because China makes 2/3rd of the world’s solar panels.

Competing on quality is clearly the answer but situations like this beg the question … “how” if companies are being beaten at price but forced to raise costs.

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5 – Headlines don’t have it right on J. Powell

The official story is that the markets are nervous about J. Powell’s mandated semi-annual testimony to the House and Senate but that’s not quite right. What they’re concerned about is an unexpected move in rates.

Break out your popcorn or your Pepto … totally your choice.

What I want to see is a) confidence, b) continuation, and c) concern. Professionally, I’d rather err on the side of doing too much to help the millions of Americans who are now in desperate financial straits than worry about various political machinations.

Honestly, I’m not too worried about what Powell says because the very concept of inflation in the era of modern financial markets is flawed … and because I have a clear path forward with our investments.

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Bottom Line

General Colin Powell once said that “once the dice have left your hands, there’s nothing to do but watch how they come up.” To which I add, that’s why it makes all the sense in the world to control the “throw.”

Do NOT allow yourself to get distracted by inflation fears. Rising yields have historically correlated to some of the best investment returns … ever!

Now, as always, let’s get out there and make it a terrific day!


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