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Is Disney about to get a full Nelson?

Oct 10, 2023

Good morning! 👋

Finally, a headline that gets it right.

Source: Yahoo! Finance

We’ve talked about this so many times I’ve lost count, but “better late than never,” as the old saying goes.

Remember… the real key to market movement is Treasury yields. Not the usual blather you hear in the media about inflation-sensitive stocks, shifting sentiment, etc.

The relationship is super simple.

Prices tend to rise when yields drop (because big, leveraged traders have to pay less vig for all the money they borrow), and prices tend to fall when yields rise (because the cost of all that money goes up).

At the risk of sounding like a broken record...

Market mechanics matter, which is why any investor who understands how they actually work has a huge advantage over those who don’t. Especially when it comes to picking stocks for the long run that’ll be there when it counts!

Here’s my playbook.

Pepsi beats and raises $PEP

Super-simple story here.

Pepsi beat Q3 estimates top and bottom line… then raised full-year guidance. (Read)

It’s a perfect example of what I’ve been talking about on TV and in One Bar Ahead® for weeks. And now that earnings season is upon us, we’ll talk about it some more.

The best companies will continue to put up great numbers, which is, naturally, why you want to “buy the best, ignore the rest.”

LEAPS might be a great play here.

If I were Peltz $DIS

Reports are circulating that Disney is “surprised” that activist investor Nelson Peltz is back and that there may be a proxy war.

I’m not.

Disney has been its own worst enemy for years. Iger’s on the right track, but I think he’s probably nowhere near as aggressive as Peltz will be when it comes to returning the company to prowess.

The Financial Times did a great write-up saying that the company “must make asset sales or suffer a full Nelson,” a clever pun on a wrestling hold by the same name. I think they’re absolutely on the right track. (Read)

If I were Peltz, I’d hold a garage sale, clear the balance sheet, and get back down to business providing great theme parks, great brands, and a great entertainment experience.

Disney was a favourite stock of mine for years, but I still have not repurchased shares and, sadly, am in no rush.

Selling Cash-Secured Puts could be a great way to get paid while waiting for the stock to find its footing. There’s not a lot of premium, but that’s changing, so it’s worth keeping an eye on, IMHO.

FTX Trial: Lawyers on speed dial

Disgraced crypto king Sam Bankman-Fried’s ex-lover, Caroline Ellison, is widely expected to take the stand this week. (Read) Lawyers will attempt to determine whether FTX’s unprecedented collapse was the result of simple bungling or fraud.

I’ve got to imagine that there’s a slew of VCs bracing for the worst.

  • If it’s bungling, then they are arguably off the hook when it comes to their own investments.

  • If it’s fraud, I think it’s very likely that some really big names have their lawyers on speed dial because there will be serious questions about the level of pre-investment due diligence, who knew what and when.

What does that mean for crypto prices?

Probably not much, at least not immediately anyway.

Longer term, I think the story is very different because a fraud finding in the SBF trial could quickly snowball into a story about market manipulation, the scale of which will shock both unsuspecting investors and the cryptoratti alike.

If you’re trading crypto, I submit now’s the time to start checking short interest and exploring put options. Not for nothing, but chaos always creates opportunity!

GM: Make it stop!

Canadian autoworkers are now piling on with their American kin. According to various reports, the 18,000+ member Unifor union will strike, which impacts Chevy Silverado and Equinox production if I understand that correctly. (Read)

Tesla, meanwhile, has sent two production pool trucks along the notoriously challenging Baja 1,000 route and apparently, they’re doing just fine. (Watch)

Pairs trade idea: Long Tesla and Short GM.

Tesla’s manufacturing plants are 20 years ahead of the big three, which are being hamstrung at the worst possible moment.

Nearly 50% of Buffett’s portfolio is invested in one stock

Diversification hasn’t worked like it used to for more than a decade. Worse, investors who were counting on it have been held back.

Concentration is the only way to go, and I’m not the only one who thinks so.

Unka Warren’s conglomerate, Berkshire Hathaway, has nearly 50% of its $340 billion portfolio tied up in just one stock, according to SEC filings.


Should you buy right now?

There’s a very simple answer, and it’s one that we talk about frequently in One Bar Ahead®, my premium research journal. Upgrade to Paid

I’d love to have you on board if you’re interested.

Bottom Line

Investing is a journey.

First, you learn how to lose.

Second, you learn how to learn.

Third, you make money using what you learned.

As always, let’s MAKE it a great day—you got this!

Keith 😊

Straight to your inbox from Keith himself!

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