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I’m with Dan (again); a “tidal wave” of growth after earnings

Jun 27, 2023

Good morning! 👋

Futures are up as Wall Street waits for a slew of data to end the first half of 2023.

That’s being interpreted negatively—thanks, very predictably, to the spin doctors and click-bait artists keen to attract your attention.

Yet even after all the selling last week and yesterday’s downdraft...

Both the S&P 500 and Nasdaq are still on pace to finish June more than 3% higher while the Dow is poised for a monthly advance of nearly 2.5%.
The Nazzy has gained more than 9% this quarter and is on pace for the best first half of any year in 4 decades.
The S&P 500 and Dow are on track to finish the quarter up more than 5% and 1%, respectively.

Do NOT get distracted!!!

Here’s my playbook.

I’m with Dan (again)

Wedbush’s Dan Ives is one of the very best tech analysts in the game and someone I respect tremendously. Not surprisingly, we share many of the same thoughts when it comes to the future, which companies will win, and why.

But I loved how he phrased what he sees next, especially since I can’t put it better.

“A tidal wave” of growth in tech after earnings season.

Hooyah! (Watch)

Key Point: Most investors are still thinking in terms of diversification, which is like playing not to lose. The world’s best investors, on the other hand, are thinking about being “in to win”—something we talk about frequently because it implies concentration.

Dan and I both see 10%–15% growth ahead after earnings.

I hope you’re on board with the right companies because not all are going to make it. In fact, many won’t, and that’ll catch many investors by surprise.

Biden’s $42B internet initiative is DOA

President Biden says he wants to spend $42B on a new high-speed internet initiative.

Meanwhile, Unka Elon has been there, done that, AND has the T-shirt to prove it.

Case in point, Musk is already rolling out Starlink 2.0. (Read)

SpaceX is the world’s single-largest satellite operator with more than 4,400 units already deployed. This means he can already provide satellite access to a huge swath of the planet at higher speeds and with lower latency than traditional satellite internet.

And now the government wants to step in??!!

Strikes me as a waste of tax dollars.

Key Investing Point: Private industry almost always does it better, cleaner, faster than any government enterprise could. Mail, solar, rail...

Invest accordingly!

🤦‍♂️ Zombie buildings + $1.5T in real estate mortgages

What could possibly go wrong?

Other than everything, I mean.

For the first time in modern financial history, building owners—and I mean those who own billion-dollar skyscrapers, hotels, and commercial real estate—may simply walk away from trillions of dollars in mortgages instead of refinancing. (Read)

I’ve got to imagine that the pucker factor is off the charts in more than a few swanky bank boardrooms because this means legions of lenders are at risk in ways they didn’t anticipate.

Reminds me of what happened in Japan in the 1990s when real estate crashed there as it became clear that banks had lent billions based on real estate collateral that suddenly wasn’t worth a fraction of what everybody thought.

Investing Implications: REIT investors are at significant risk, especially if those REITs own office towers and commercial space that has traditionally been the backbone for many portfolios. I also think regional banks are in for SVB 2.0 if they don’t get a handle on this in a hurry.

Meanwhile, not all REITs are the same, which is why I’ve gone with a super-specialized medical alternative that’s boosting divvies and has a rock-solid rent roll. Upgrade to Paid

If you’ve got this covered, excellent!

If not, do not dally.

The Fed’s so-called “stress tests” are coming up, and a few trillion in risky real estate loans—at a time when defaults could skyrocket—probably won’t help.

Deutsche Bank: You could be SOL if you own Russian shares

This just in.

Deutsche Bank has apparently told investors who own Russian shares that they may be SOL... but for a reason even I didn’t see coming. (Read)

Apparently, the bank can’t find ‘em!

Imagine owning an ADR like BABA or AZN and being told the same thing one morning. I know Russia has its own challenges, but Развалюха!!

Apple’s new watch

I really feel for Samsung, Fitbit, and every other aspiring wearables company.

Apple will reportedly release a new Apple Ultra Watch this fall. (Read)

Mind you, that’s in conjunction with the iPhone 15 and a 2nd-generation Vision Pro, as well as a lower-end model. And as if that’s not enough, the company also expects to ship new M3-powered laptops and new OLED-screen iPads by next year.

I hope I own enough.