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Buy this stock before AND after earnings

May 02, 2022

Good morning!

There’s no doubt that we’re in a bear market in my mind … Zero!

But, to a point I made ahead of the opening bell this morning with the fantastic Stuart Varney on Fox Business, there’s always something to do. (Watch)

Here’s my playbook.

1 – Bear markets are the stuff of legend

Bear markets are no fun.

However, they’re also the stuff of legends.

Years from now people talk about how they bought XYZ or PDQ when it was just $___ dollars. And anybody who didn’t will feel the burn.

2 – Anybody playing “long only” is missing half the profit potential.

Bear markets are no fun but they’re not the end of the line either.

There’s always something to do.

Buy puts, hedge using inverse funds … then, when you have those covered, go on the offensive!

Here’s a great primer. (Read)

3 – Buy this stock before AND after earnings

Pfizer will report before the bell tomorrow, and I think they’re going to knock the proverbial leather off the ball.

Paxlovid (the oral COVID pill) recently came online, the fourth booster is making the rounds, and most importantly, the company is beginning to implement mRNA treatments for other diseases.

Plus, if that’s not enough for ‘ya … the dividend is increasing in June to $0.40/share, which brings the yield to around 3.2%. (Read)

4 – Be like Buffett: Activision

Berkshire Hathaway apparently owns a LOT of Activision right now (~9% of outstanding stock) to bet on merger arbitrage.

In case you missed it, Microsoft announced earlier this year that they’d like to buy ATVI for $95 per share, or around $20 more than where it’s trading right now.

Buffett and Co are betting that the deal will close, and that the $20 gap will be closed – hence the arbitrage. (Read)

You can take the same trade.

‍The potential upside is around 25% right now if the deal goes through.

‍The potential downside is that the acquisition deal falls through because regulators pitch a fit or the Beltway Boffins decide it’s “not competitive” for some unfathomable reason. Not that anybody inside the Beltway could spell competitive, but I digress!

Might be worth a small position or a flyer.

5 – Why I’m watching Starbucks carefully

Starbucks will also announce earnings this week. It’ll be the first posted with newly re-returned CEO Howard Schultz at the helm. The stock is an excellent proxy for global consumer demand and, in that sense, much like Mcdonald's. (Read)

Bottom Line

Current market conditions are challenging but here’s the thing most people fail to grasp.

What you do when the market sucks will determine your financial future when it doesn't.

Let’s get out there and MAKE it a great day!

You got this – and I am right with you every step of the way!



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