Enough already—time to pull a J.P. Morgan!
Good morning! 👋
Imagine that... the markets are down as investors eyeball yet another round of Beltway BS related to the debt ceiling.
Take a deep breath.
The markets will get roiled even if there is a deal.
Computerization, leverage, and liquidity... all of which we talk about regularly.
As always, that’s something you can use to your advantage.
Chaos creates opportunity.
Remember: The big money will use every trick in the book to separate the weak from their hard-earned $$.
NVDA, which reports later today, will be a good example. I expect clickbait artists masquerading as journalists and storyline sell-siders to highlight falling PC sales, etc. as a reason to be concerned.
AI, chips, and data centers are not going away.
Use any volatility to your advantage, even as others fear it.
Here’s my playbook.
Debt ceiling: time to pull a “J.P. Morgan”
Many people don’t know this, but back in 1907, after several weeks of crisis, billionaire investor J.P. Morgan locked banking execs in his private library on Madison Avenue.
Then as now, the economy was struggling, people were getting laid off, there were bank runs, businesses couldn’t get credit. Panic began to creep in around the edges as the government froze like a deer in the proverbial headlights.
So J.P. Morgan, who bluntly “had had enough of this ____,” summoned banking executives to his library and locked the door. At four in the morning, the bankers reached a deal that saved the day.
I say it’s time for a repeat.
Lock Congress in chambers with no TV cameras and no assistants. They are not allowed to leave for vacation, Memorial Day, or anything else until they come to a resolution. Yellen and Powell will be required to watch from the peanut gallery.
Take away the microphones and remove the press so that they can talk freely about fixing the problems without the added pressure or temptation of public posturing.
Set a hard date for a solution. Cancel all pay, bonuses, and benefits if they fail to meet it and until they do. Hold as many votes as needed.
Meanwhile... blast shields up. Hedges in place. Sharpen your pencil and get your “buy” list ready.
Apple deal may be death knell for Intel
Apple announced a multibillion-dollar deal with Broadcom yesterday for new US-made chips. (Read)
I think it could be the beginning of the end for Intel; the stock could be sub $20 within the year.
Don’t shoot the messenger, BTW.
People didn’t like it much when I called META a bug in search of a windshield at $350 and said it would fall under $100. Or when I labelled Robinhood as possibly the biggest self-pump & dump of all time the day the company filed for its IPO.
Here’s my take with the fabulous Charles Payne (Watch), plus why understanding the difference between heroes and zeroes could make a huge difference in your results.
Speaking of Meta...
Why GIPHY sale could be just the tip of the Zuckerberg
Meta is bound to take a hit.
The words “fire sale” come to mind.
In 2020, the company purchased GIF database and creator GIPHY for $315 million and apparently got just $53 million from Shutterstock. A $262 million loss.
According to media reports, the UK has forced the GIPHY sale, but I think that’s only part of the story. (Read)
MyPOV: The real issue leads right to the C-suite. Zuckerberg is surrounded by “yessers,” meaning people who don’t challenge him. I wonder how many other “deals” he’s made will come home to roost.
META stockholders could be in for a rude awakening.
Better than Ozempic?!
Novo Nordisk’s Ozempic has been all the rage lately.
But, as is usually the case, there’s another story.
A new Pfizer drug that has shown similar results in mid-stage trials, both for reduction of blood sugar levels—its primary indication—and the weight loss effects many seek. (Read)
At the risk of sounding like a broken record... do NOT underestimate Pfizer’s ability to innovate! Even if you’re in the “never mRNA” camp, there’s so much else to like about this company.
Shares have bucked the markets recently and tacked on 7.11% over the past week versus the S&P 500, which has underperformed by 6.24%.
I hope I’m smart enough to buy more (and plan to)!
Oppenheimer says password crackdown will be good for NFLX
Netflix (NFLX) is cracking down on password sharing in the US and in over 100 more countries. (Read)
Shares are down -48.53% off all-time highs set in November 2021, which means they’d have to return approximately 94% from here just to reach those highs again... at a time when competition is intensifying.
The company is a one-trick pony that has to constantly churn out new content. Worse, it’s adopting advertising now, even though it was specifically created for consumers who fled cable TV to avoid the endless stream of commercials.
Streaming is becoming a commodity.
In OBA terms, it’s a “nice to have,” not a “must have”... and that weakens the investing case.
The world’s best companies are always innovating.
Apple was once a failing computer company.
Amazon was once a tiny online bookstore.
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