Some stocks are at “what the heck” levels

Good morning!

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Turns out the Fed doesn’t know squat.

Then again, everybody else has known that for a long time.

Futures are flat to slightly down as I type.

Here’s my playbook.

When will the selling stop?

That’s the question on the minds of millions.

Three things come to mind:
The Fed grows a backbone (not likely)
Russia pulls back or at least tones it down (not likely)
Presidential energy policies get reversed (no way in hell)
Many Americans are watching their dreams of a comfortable retirement vanish in front of their very eyes. Meanwhile, our leaders don’t give a rip about anything except themselves and millions around the world have had it.

What to do: Stick with the very best companies with an emphasis on those that remain stable during recessions like CVX and TSN for instance.

That’s the backbone part, BTW.

One bright spot

There have been 11 tightening cycles since 1965. Eight of 11 have been followed by recessions. “J Pow” considers 1965, 1984 and 1994 to be successful landings which means that he has a 27% chance of getting it right if the pattern holds.

Not great odds.

Why we care: Buying right is always something you want to do because the markets reward discipline. Not fear. Once the markets price in the recession fully, the average upside is 40% as it comes back.

Meanwhile, blast shields up!

I have you covered: I’ll be releasing a special 5 Minute Guide to Hedging later this week. So, if this is of interest, stay tuned!

Be like Buffett (even if you don’t have billions)

Many investors talk a good game when it comes to buying low and selling high but few ever do that. Instead, they chicken out when the time comes.

Warren Buffett isn’t most investors.

He’s purchased several stocks recently including Occidental Petroleum Corporation (OXP). I prefer Chevron because I think it’s got a better portfolio but so what.

The point: Buffett is doing exactly what savvy investors worldwide should be doing … finding opportunities and buying into the panic.

This stock is now at “what the heck levels”

SNAP got obliterated yesterday on “surprise” guidance and remarks that conditions have deteriorated faster than management anticipated.

Not.

Management screwed up … pure and simple.

Not surprisingly, SNAP lost a staggering -43.08% in a single session which puts it in “what the heck territory” as I noted earlier today during a conversation with the fabulous Maria Bartiromo. (Watch)

I’ll be sending out a quick trade idea to play the situation in Trade with Keith shortly so keep an eye on your texts if you’re on board.

Musk and Twitter

Elon is asking all the right questions for all the right reasons. I think there’s a good possibility that he writes a check for $1 billion to walk away. Or hits Twitter with fraud and misrepresentation to force disclosure of actual users, bots etc … then uses that information to renegotiate a substantially lower price. (Read)

And there’s something else: Selling puts could be a great way to buy on the cheap if you’ve got the guts.

What to expect: I think there will be a major woodshed moment at the upcoming Twitter shareholder meeting today. (Attend)

Rounding up … more media!

I stopped by Yahoo! Finance yesterday and had a great discussion with the team about SNAP, AAPL, CEO Elon Musk, the TWTR saga and more.

What I had to say may surprise you. (Watch)

And I was honoured to return to the Cow Guy Close with my dear friend and colleague, the extraordinary Scott “the Cow Guy” Shellady.

We talked about recession, housing, what the Fed needs to do but probably won’t and more. (Watch)

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Bottom Line

The biggest results often come from the toughest times.
Regroup, study, learn.

Repeat.

Success will follow!

You got this.

Let’s get out there and make it a fabulous day!

Keith