What could go right (other than everything)

Good morning! 👋

It’s still very early and very quiet, but I’m thinking about one thing and encouraging every investor to do the same... what could go right.

Yes...

...there’s a debt crisis.

...politics are a wreck.

...geopolitics are complicated.

...a recession looms.

And...

YES... the world’s greatest companies are still putting up great numbers despite it all.

That’s why investors need to focus on the heroes so that they don’t get left with the zeros, something we talk about frequently. Speaking of which, the super-savvy Stuart Varney asked me about that this morning, and I hope that what I had to say sinks in. (Watch)

Here’s my playbook.

I disagree with Loop (on Apple)

Loop Capital downgraded Apple from a buy to a hold, citing fears that the company will fall short of its June quarterly revenue guidance. Shares fell 1% in premarket. (Read)

They’re off base.

Why?

Market mechanics.

  1. Apple is one of the most widely held stocks in the world, which means that virtually every pension fund, endowment, and many hedge funds own, trade, or hedge it. Same goes for gazillions of investors piling on through index funds, ETFs, and mutual funds. That gives the stock super depth even if results miss.

  2. The macro picture: If there’s a debt ceiling agreement and the Fed stops hiking, Apple is gone like a rocket even if results miss.

I think shares will catch a bid pretty quickly. In fact, I’d bet it will have happened by the time you read this today.

$200…

Then $250 in short order.

OBAers: Always do what Wall Street does, not what it says. Especially when it comes to a stock like Apple that is a proxy for capital flows.

Did the Fed just hint at a pause??!!

Minneapolis Fed President Neel Kashkari cautioned against reading too much into a June pause in the current rate hiking cycle during an appearance on CNBC. (Read)

What he said next made me do a double take.

If we were to skip in June, that does not mean we’re done with our tightening cycle. It means to me we’re getting more information.”

Yes, it does.

Like, information showing that the Fed has screwed up royally with its policies—causing trillions of dollars in damage, wiping out a generation of investors, and destroying any semblance of public trust.

But that’s just me.

I think he just floated one heckuva trial balloon.

The window is closing, and investors who have gone to the sidelines because of their need to feel “safe” may get a rude awakening if the markets take off without ‘em.

In the old days, you could wait for “confirmation” or a trend to resume, but thanks to the rise of computerization and indexing, you’ve got to be in the scrum when the fight starts, or you risk missing a substantial portion of the next bull run.

Ford: all show and no go

Ford’s holding a Wall Street investor event today.

My guess is that the corporate PR folks will do everything they can to create a cross between the mojo Steve Jobs used to create and the mojo that Musk does create. The risks of a backfire are extremely high, pun absolutely intended.

I think the presentation should have been titled, “How we’re gonna catch Elon”…

Anything else will fall flat, and what’s happening with the stock price suggests I may be on to something.

Ford’s a great product, but it’s being held back by legacy thinking, costs, and production; contrary to what execs think, 2nd generation EVs are not gonna miraculously unlock profitability.

Any excitement-induced bounce may make for a great putsky.

$11 a share.

World’s most powerful passports

What’re you gonna do about a falling dollar?

If you’re like many, travel.

Here’s a surprising list of the world’s most powerful passports. (Read)

Remember: Money is like water—it will always flow to where it’s treated best. In life and in the markets.

Meta strikes again

Ireland’s Data Protection Commission (DPC) accuses Meta of having transferred consumer data across the pond, contrary to the EU’s strict data protection laws. Accordingly, the DPC is slamming Meta with the biggest fine since the law took effect five years ago—a whopping $1.3 billion. (Read)

El Zucko isn’t happy, of course.

What I find interesting is that apparently, he’s not contesting the court’s findings, just the amount of the fine. It’s a fluid situation.

Ummm...

  • Data leaked to Cambridge Analytica around 2016 cost Facebook $725 million.

  • In 2019, the FTC charged Facebook with a record-breaking $5 billion fine.

I’ve made no bones about the company’s behaviour, which, I believe, starts in the C-Suite.

Short or avoid, knowing full well Wall Street wants to “defend” the stock, at least for now anyway.

Bottom Line

People who play only one side of the opportunity miss half the potential.

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

Keith 😊