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Morning! 5 with Fitz - 10/22/20

Keith Fitz-Gerald

October 22, 2020

Good morning!

Futures have given up some ground overnight as I type. Not much, mind you but still enough that the possibility of a down open exists. The usual reasons and suspects are involved.

There’s the Pelosi/Mnuchin stimulus fiasco, election uncertainty and coronavirus concerns. All three indices, though – the S&P 500, the DJIA and the Nasdaq remain up for October after a gutless September.

Soooooo, with that in mind, here’s what I’m watching.

1 – I wish I had a bigger position

Tesla popped 5% overnight after reporting a 5th consecutive quarter of profits. And, mind you, they’re already up 400% in 2020 alone. I think the run is really just getting started and, as you know from my media appearances, I think the story is a whole lot bigger than just vehicles.

I wish I had a bigger position – might have to do something about that!

2 – Boeing’s “big move” more like a “Hail Mary”

Boeing is reportedly holding conversations with customers are a new single-aisle aircraft capable of carrying 200-250 people that would put it between the 737 MAX and the 787 Dreamliner. This would be the first new aircraft launched since 2004 when Boeing debuted the Dreamliner.

The move is being billed as a competitive answer to Airbus but it strikes me more as a “Hail Mary” at a time when the company is reeling from the MAX’s prolonged grounding.

I’m not a fan longer term even though the stock has popped a bit overnight. I don’t think travel returns to 2019 levels until 2025 and, even then, the optics have changed. I’d rather put my money – and have – in tech related choices where virus and travel are not impediments.

3 – I was just talking about this (yesterday)

ExxonMobil CEO warns about jobs cuts ahead for US and Canada. The company has lost 70% of its value, numbers are down, demand is down … now this. I’d be very worried if I were a dividend-oriented investor because the embers are smoking. Only matter of time …

I do not own shares, incidentally.

4 – Is Arizona about to flush itself?

Like many states, Arizona is struggling to make ends meet so it’s asking residents to approve a 5th tax bracket for wealth residents with additional taxes on the wealthy including an additional 3.5% tax in incomes over $250,000 and $500,000 joint filers.

History shows this very, very clearly that higher taxes stop money flowing in, reduce innovation and will cost jobs. What they should be doing is fostering an environment that makes Arizona more competitive.

Big government = small wallet.

5 – Will the last person in NYC turn out the lights?

Paul Singer is moving his $41 billion hedge fund from midtown Manhattan to Florida. The former is increasingly anti-business, high tax and clearly a s---t-show while the latter has no individual income taxes, no estate taxes and no capital gains taxes.

Carl Icahn … already relocating to Florida

Ken Griffin’s Citadel … opening offices in Miami next year

Balyasny Asset Management … expecs Miami offices to be ready by year end.

Bluecrest Capital … already in Miami

Verition Fund Management … Boca Raton

ExodusPoint Capital Management … North Palm Beach

There are thousands of jobs at stake because the money management firms employ loads of people who, in turn, patronize everything from hotels to restaurants, service businesses. Billions are leaving which will, in turn, worsen the burden on those who remain because don't or cannot leave.

The Bottom Line

I hear frequently from folks that they’re “too busy” to invest. That’s as lame as it gets. Investing doesn’t require a lot of time to do it right. Even one share at a time can make a monster difference.

Case in point, Apple went public on December 12, 1980 at $22 per share. The company has split several times and paid dividends which gives it a cost basis of $0.12 per share according to Yahoo!Finance. Apple closed at $116.87 yesterday which translates into a 97,219% return on your money. Every $1 spent back then is now worth $973. Every $10,000 is now worth $9.73 million.

Kinda changes one’s perspective, eh?

Make it a GREAT day!

Keith

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