☕️ Moderna doubles: a quick counter-trade idea

Howdy! 👋 

The markets are green on the heels of Bessent’s buyback announcement. 

I’m not crazy about that (because I think the way our country’s finances have been run for a long time is an abomination) but that’s a discussion we’ll have another time. 

Meanwhile one of my favorite maxims comes to mind. 

Profits are always found at the edge of absurdity. 

Here’s my playbook.

1 – Bessent doubles Treasury buybacks 

The Treasury Department says that it will double the size of US government repurchases to steady bond markets. (Read) 

Yields, of course, tumbled while futures rose and all three indices have maintained that upside as I type. 

The Treasury Department says, “This increase in buyback operation sizes reflects Treasury’s desire to provide greater liquidity support in longer-dated nominal sectors where there is consistent strong sponsorship from market participants, as evidenced by the significant volume of high-quality offers Treasury routinely receives in longer-dated buyback operations.” 

Plain English is clearly not their strong suit. 

So here’s the translation… Umm, yeah… we noticed that everybody’s desperate to dump long bonds on us lately and we, being extremely reasonable people, decided to buy more of ‘em. Just the Treasury department doing its part to be sure nobody has to ask uncomfortable questions about why the bond markets need this much molly-coddling. Move along… nothing to see here. 

Trade Idea: If Treasury is leaning this hard on long-dated buybacks, that’s your cue to keep duration risk on a short leash like the OBA Family does with its bond-related choices. 

Keith’s Investing Tip: It almost always pays to listen when the bond markets tell you something that officials won’t. You are listening… right! 😀 

2 – Target: here’s what management hopes you don’t notice 

Target just posted its second straight quarter of real sales growth. Comparable sales rose 3.8% — blowing past Wall Street's 2.4% guess. Digital sales jumped nearly 9%. Every major category grew. (Read) 

Here’s the thing Wall Street is hoping you don’t notice. 

Target's earnings got a $752 million lift — from a one-time tariff refund. 

Not management’s prowess. 

I’ll pass (again). 

3 – Moderna doubles: a quick trade idea 

Moderna doubled overnight on promising cancer vaccine results. (Read) 

Awesome on two counts. 

First, if you’re struggling with cancer or know somebody who is, this could be a game changer if it’s for real. 

Second, volatility cuts both ways. 

Which gives me an idea. 

This sets up a quick speculative trade using what are called “at the money” puts – a bet the stock declines. For example… Buy to open 2 MRNA 8/28/2026 140.00 P @ Limit $14.65, Day (undoubtedly prices will be wildly different by the time you read this). 

My trade management plan is simple. 

I’ll exit within a day or two if it falls for any reason and there’s a profit. Or plan on eating the entire thing if it doesn’t. 

Moves like this are often based on nothing more than hope and hype.  

Let me explain. 

Market makers are already chasing delta to stay hedged. 

Once market makers finish hedging their short gamma and the forced buying dries up, the artificial lift underneath Moderna goes with it. There's no "new" buyer showing up to hold the price at these levels once that flow stops. 

This is simply a speculative trade idea that’s designed to follow along for the ride when the momentum chasers, short-covering and FOMO fades. 

Do NOT attempt to follow along if you have no idea what I am talking about, are not options savvy and cannot afford to lose any money you use entirely. 

Keith’s Investing Tip: The herd almost always overshoots the news when it first hits. So it can pay to look at the other side of the trade. Or not. 

Meanwhile, I’d think seriously about betting on other names in the space if you don’t already own ‘em. It won’t be long until the companies I prefer catch a tailwind if Moderna is on to something. The One Bar Ahead® Family has what I consider to be a great play list and I hope you have something similar. 😀 

4  – Digital leftovers: What in the world is Google up to? 

Spirit Airlines has been dead money for a long time – funny how going BK twice in a year’ll do that. Sigh. 

Anyway… here’s an interesting twist. 

Alphabet (parent company of Google) is buying Spirit's digital leftovers – meaning the company’s internal business data out of bankruptcy — employee emails, Microsoft Teams messages, spreadsheets, calendars, the whole back-office paper trail for a cool $10 million. 

Alphabet says it’s for training AI models and product development. 

I don’t buy that for a New York minute, but that’s just me. 

I think what’s really going on is that Alphabet is hunting for legal cover it can’t get anywhere else in the open market. 

Why would a company do that? 

Most AI models are training up on scrapped data and that’s increasingly problematic at the lawsuit level. But buying data from bankruptcy could ensure “clean title” and no lawsuits. 

Perhaps it's even simpler.  

Sometimes you don't outbid the other guys and gals because you want the thing badly enough that you outbid ‘em because you don't want anybody else walking away with it. 

Either way, this suggests an entirely new market in the making… buying dead business data. 

My guess, btw, is that insurance companies are not going to be far behind because those pirates will use anything they can scrape together to jack rates… err, provide better coverage. 

I expect two entirely new industries to develop… one that centers on wiping data of failed companies before aggregators or brokers get at it… and another that concentrates on swooping in to buy it before it can be sanitized. 

Keith’s Investing Tip: Data sovereignty isn't an abstract national security buzzword reserved for governments and chip factories. It’s an investable, thematic choice. 

5 – An extended discussion with the Income Architect 

I sat down with the sharp-as-a-tack Brad Cahoon – aka the Income Architect - to talk concentration vs. diversification, what makes a stock a "Must Have," the 6th Wave, the thinking behind various ETFs, gold, and the possibility of a market “floor” under prices. (Watch) 

I hope you enjoy it as much as I did, especially since we had considerably more time than TV allows which means we could get further into the weeds so to speak. 

Brad (and his viewers have) kindly asked me back so plan on more ahead. 😀 

Buy the Best, Ignore the Rest®. 

Bottom Line 

As crazy as it sounds, buy the future, survive the present. 

You got this — I promise. 

As always, let’s MAKE it a great day. 

Keith 😀