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Buy and hold this stock forever!

Jul 26, 2022

Good morning!

‍The markets are in the red over concerns related to Walmart’s guidance and fears that what that company’s management had to say will spill over into other retail-related stocks.

As usual, there’s another side to the story.

Before we get to that, however, here’s a quick conversation about this week’s market conditions with the fabulous Richard Dean and Brandy Scott on the Business Breakfast in Dubai early this morning. (Watch)

Here’s my playbook.

Buy and hold this stock forever

All eyes are on Apple this week and bets are being placed to both the upside and downside. I don’t care much either way because Apple’s the kind of company that simply won’t take a header on anything other than a short-term basis.

The company is widely expected to report slowing earnings, cutting spending and the like. (Read) Most people will view that as a negative, but I think the reverse is true. Tim Cook is super savvy and trimming the fat now makes the company even stronger going forward.

That’s why I suggest using any short-term dislocation to pick up a few shares. Apple’s the kind of stock that creates legacy wealth over time, not just quick wealth at moments in time.

BTW, the medical pivot, a story I broke initially in 2014 or so and which we’ve talked about quite a bit, is gathering steam quietly. Apple shares do not even remotely reflect the potential which could be 3-5X the global iPhone market. Perhaps more.

Walmart biffs it but not for reasons you’re hearing about

The company announced weaker guidance and shares immediately went down 10% after hours as I write this section. People are focused on the guidance itself as if that’s a miss.

It’s not.

In fact, same-store sales are expected to be up but for critical necessities, not apparel which requires bigger markdowns to unload.

The company has simply got too much of the wrong inventory on hand to maintain profit margins. Hence the downbeat forward-looking guidance.

When I say buy companies that can maintain margins, I am NOT kidding!

Now, that said … there may be a quick scalp up for grabs if you’ve got the chops. I think computers may want to balance that out in the morning, particularly if retail investors rush in. Walmart stock might be good for a few points under the circumstances.

Meanwhile, I’ll continue to favour another retailer which is, not coincidentally, down less and showing far more resilience as I type.

Members of the One Bar Ahead™ Family know exactly what that is which is why I’ve recommended it! (Learn More)

Progress but not Pelosi

A former congressman was among 9 charged in an insider trading indictment unveiled in NY yesterday by federal prosecutors. According to the charges, Former US Congressman Stephen Buyer used insider information to profit ahead of deals that were not yet known to the public. Naturally, his attorney says he’s innocent. (Read)

Sadly, this stuff has become a game of technicalities as evident by the fact that stock savant Paul Pelosi doesn’t even bother trying to hide his moves lately. He still insists that he has no knowledge of wife Nancy Pelosi’s upcoming votes or materially sensitive information.

You and I may have been born in the middle of the night but, odds are, it wasn’t last night.

MyPOV is that our public officials should be leading by example and be a shining beacon of the best our country has to offer. Not bastions of impropriety and questionable ethics.

Am I missing something?

MCD: still lovin’ it

McDonald’s reported a beat on earnings but revenue fell short of expectations. Not really a surprise either way to my way of thinking because the closure of Russian and Ukrainian units took about 3% off the top. (Read)

International same-store sales jumped 9.7% fueled by strong overseas growth. This even as higher-priced items and value menu selections boost US sales.

Still lovin’ it!

How to play Shopify

Canadian e-commerce pandemic darling Shopify took a hit in the pre-market after announcing layoffs for about 10% of the workforce. I think there’s a case to be made for buying at $25 or less per share as the company comes back to earth. (Read)

Tactics that could be used under the circumstances include LowBall Orders or Selling Cash Secured Puts like the one I recommended yesterday in Trade with Keith.

Bottom Line

Your job as an investor or trader isn't to figure out where the markets go next.

It's to recognize that they're in motion, then act on the signals created when that happens.

As always, let’s make it a GREAT day!


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