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It’s time to be ultra-selective about the stocks you own

Feb 07, 2022

Good morning!

Earnings season continues and all three indices are up modestly in early going as I type. Not sure it’ll stick.

Be ultra-selective about which stocks you own.

Here’s my playbook

1 – What to expect from the CPI reading

Economists are expecting 7.3% later this week or so but I think the reading may far hotter than that if what my family and I feel in our wallet is any indication. The situation reminds me of a bug in search of a windshield. My take with the fabulous Stuart Varney just ahead of the opening bell. (Watch)

The volatility that everybody seems to have forgotten about will be back and probably with a vengeance.

Hedges, stops, inverse funds … you know the drill!

2 – What to watch: Disney Earnings

The House of Mouse reports after the bell Wednesday; most people are going to be looking at streaming because streamers are having to spend gobs of money on content yet struggling to hold on to subscribers.

We knew that. The real value will come from integrated branding with Marvel Comics, Star Wars, Nat Geo and more. I’m also watching park attendance because there’s a lot of pent-up travel demand and this is where we’ll see it if people are indeed getting out again. (Watch)

3 – Peloton will be a headache for any company buying it

Amazon and Nike are reportedly circling. There’s also been speculation about Apple for a while. I get it but Peloton bikes are heavy, slim margin and don’t have upgrade cycles even remotely resembling tech. Many units will undoubtedly become very expensive laundry hangers. (Read)

4 – Like a 5-year-old

Meta threatened to shutdown Facebook and Instagram in Europe over EU regulatory concerns related to user privacy. Strike me as a lot like a 5-year-old throwing a play yard tantrum.

Actually, what they really said was that the privacy regs “would materially and adversely affect our business, financial condition, and results of operations.” (Read)

Imagine that … when you take away their ability to share people’s data without their permission Meta doesn’t have a business!!

5 – The real reason nobody’s watching the Olympics

Reports are that just 16 million people tuned into the opening which is 43% lower than 2018 Winter Games in South Korea according to Yahoo Sports. NBC, by the way, paid $7.75 billion to broadcast. (Read)

The politicians are trying to turn the Games into China’s problems – communist, dictators, protests and more – but the reality is that many people just don’t give a rip. Sad day for sports and for the athletes who have worked their entire lives to get to that level.