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Aug 26, 2022

Good morning!

‍Futures are trying to shake off the past few days of selling and a 3-day slide.

Makes sense.

Traders are trying to get ahead of the Fed’s widely expected remarks from the Jackson Black Hole tomorrow.

People will quibble over whether the “hike” should be 75 basis points or 100. The real risk is 50 basis points.

The Fed has made a huge stink about being diligent, managing inflation – whatever buzzword salad you want to attach to it. Slowing down that program would signal business conditions are worse than many think and that, in turn, would panic the markets.

I can’t see Powell doing that but, then again, Powell didn’t “do” a lot of stuff when he had the chance. I believe he’ll go down as one of the most inept Fed Chairs in history when the dust settles.

Here’s my playbook.

It’s Apple season

In the stars. Team Cook sent out really cool cosmic-themed invitations yesterday to its September 7th shindig when, expectations are, we’ll get a first look at the latest iPhones. A new watch and other cool stuff are also reportedly set to debut. (Read)

What I’ll be watching most closely. Apple’s products are going to be spectacular no matter what, so that’s a given. I’m more interested in whether Apple will boost already premium pricing to nosebleed levels. That’ll tell us about two things: the supply chain and inflation.

$185 a share, then $200. Apple is trading at $167.53 as I type, and any inflation pressures are going to set the boffins in motion. Tech experts you’ve never heard from are going to tell you how bad this is and why price hikes will jeopardize sales. Traders will likely push prices lower in an attempt to scare investors out and take their money before pushing higher (again).

Do not miss the opportunity. Inflation rages but I have not heard of a single person who has given up their iPhone, their Apple Watch, or iPad. You get the idea.


What’s making headlines. NVDA reported weaker than expected results, which of course, goes to the analysts who put them up in the first place. CEO Huang knew exactly what he was talking about two weeks ago and reported preliminary earnings that – ta da – match up with what got reported yesterday. (Read)

If you’re tempted to sell, get your head screwed on straight. Nvidia’s data segment is up 61% YoY. The company’s products are the foundation stones upon which nearly everything is built. NVDA’s stuff supports the AI projects for both GOOG and AMZN. It’s going to support autonomous vehicles, medical care, and yes … gaming and crypto.

You know what to do. Buy stocks like you buy groceries, on sale.

PTON: don’t say I didn’t warn you

Wall Street has been pumping Peloton for months saying that the turnaround plan is going to be a big success. I told you the company was a bug in search of a windshield … repeatedly.

This is NOT a company going in the right direction. The stock is down 14% in premarket trading after the company announced wider losses on declining sales and rising costs. (Read)

How convenient. PTON announced the Amazon sales agreement a day earlier and caused shares to rocket up 20%. Then announced horrendous earnings that caused it to tank -14%. Nothing – I repeat – nothing happens by chance. Tell me the PR department didn’t know both events were coming … puuuulllleeeeeaaaase!

If you own it. Do two things.

First, kick yourself in the rear end. The warning signs have been as clear as they come for a year now. We’ve certainly been talking about ‘em for that long.

Second, sell shares and put whatever money you have left into a real company producing “must have” products and services the world cannot live without … something you know will be there and which has big fat juicy margins on offer.

I can think of a half dozen quality names I’d rather own including the one I’m recommending in the September issue which is “on deck” next week. (Sign up now)

Where do they find these people??!!

“Economists are expecting a recession” screamed the headline this morning on FBN. (Read)

Where on earth do they find these people??!!

We’re already in a recession and have been for months. The technical definition of a recession is 2 consecutive quarters of declining negative economic growth, usually characterized by high unemployment, low or negative GDP growth, falling income and slowing retail sales, according to the National Bureau of Economic Research.

Stocks to buy: Companies making must have products and services are your best bet and have been since late last year when I started recommending you buy ‘em in One Bar Ahead™.

Many are low-beta, high dividend offerings and have done quite well, thank you very much. Two of my current favourites are up 68.1% and 26.9% respectively over the past 12 months, for example. Others are proving to be stable steady-Eddies, exactly as intended.

If you’ve got this covered, cool beans – most people don’t.

If you’d like some help, I’d like to earn your trust, goodwill and business. Click here to learn more about One Bar Ahead™ and why it could just be the smartest move you’ll ever make.

Meanwhile, make sure you’ve got your hedges in place. The S&P could re-test lows and you’ll want to protect against that if you can, even as you plan for the longer-term profits on offer. (Learn more)

Amazon shutting down telehealth; Signify jumps

What’s driving headlines. Amazon made a rare and surprising about face by announcing that it’s shutting down the company’s telehealth service, Amazon Care. At the same time, Signify Health – which I wrote to you about on August 8th – has jumped given that Amazon is amongst the bidders. Apparently, United Health and Option Care Health are also bidding according to the WSJ. (Read)

What happens next. Signify’s board is reportedly meeting this coming Monday to discuss the bids. I have no way of knowing which way the wind is blowing inside the conference room, but I’d lean heavily in favour of Amazon. If successful, the Signify acquisition would be the second major purchase this year after Amazon plunked down $4B for One Medical.

What to do. If you’re sitting on a double in Signify or additional news creates one, I’d think seriously about selling ½ to create a free trade if it crests $30 a share. If you own Amazon, I think $185 is in the cards by year end based on a continued uptick in e-commerce and the company’s cloud business which is practically printing money. Amazon, BTW, still has aggressive plans for health care.

Bottom Line

The best time to make a trade or an investment is when nobody else wants what's on offer.

I’m with you every step of the way.



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