What to do if you own BABA and TCEHY
Oct 24, 2022Good morning!
āThereās a good case to be made for a melt up.
Hard to believe?
I get it ā¦ but thereās always a short-term reason to sell.
Just remember, weāre not short-term players.
Weāre āin to win!ā
Hereās my playbook.
3 signs of capitulation
Many of the big banks say it wonāt happen because their high-muckety-muck analyst āso and soā says so.
Donāt fall for it!
I see 3 and laid āem out for the incomparable Stuart Varney ahead of todayās opening bell. (Watch)
PS: There will not be a warning bell if the rally gains legs - I hope youāre on board!
What earnings apocalypse?
70% of SPX companiesāÆhave beaten revenue estimates for Q3 whichāÆis above the 5 year average of 69% and the 10 year average of 62%. Ergo, things are - to a point I've made repeatedly - stronger than people think.
People are pricing the markets like they're going out of business ā thatās almost always a sign of better days ahead.
And an opportunity!
UBS on META and GOOG
The digital advertising collapse is very real, a narrative that Wall Streetās sell side analysts are suddenly very worried about. (Read)
Where were these people a year ago? Oh thatās right ā¦ telling you to buy Peloton, Meta and Zoom ā¦ all three of which Iāve repeatedly said were bugs in search of a windshield.
Whatās next. Meta will go sub-$100 but thereās another stock that Iām more concerned about as I type. Itās time to switch horses.
Iām going to be making a special recommendation later this morning. Become a paying subscriber to get access and other subscriber-only content. Upgrade to paid
Make peace or be a bag holder: Alibaba/Tencent
Both stocks are getting hosed this morning after Chinese President Xi Jinping forcibly removed his predecessor Hu Jintao from the Peopleās Congress. (Read)
Why Xi did this. Xi is as ruthless as they come and heās packing the politburo with loyalists. Hu Jintao was a product of the peopleās movement (the true proletariat) and a proponent of western engagement. Xi is a princeling (meaning the child of party elite) and an absolutist when it comes to power.
What to do now. Both stocks are down hard this morning; both will fall father. Make peace with that possibility or you will be a bag holder.
Believe it or not, there are two Chinese stocks still worth owning. Just 2 ā¦ both are even stronger buys now that Xi has made his move. Iāll also be explaining that a bit more in the November issue of One Bar AheadĀ®. Upgrade to paid
So much for free champagne: AAL
Whatās happening. American Airlines dropped a bombshell recently by announcing that itās going to be getting rid of first-class seats on international flights ābecause customers arenāt buying it.ā (Read)
Why you should care. Video has replaced the need to āhop a flightā for meetings and corporate budgets are down. Permanently! Contrary to what the media would have you believe, airlines will never be āback.ā
Airline stocks are still a no-go this morning to my way of thinking.
Bottom Line
It never feels like a great time to invest.
History shows that it almost always is.
Letās get a super STRONG start to the week.
I am with you every step of the way!
Keith