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What to do if you own BABA and TCEHY

Oct 24, 2022

Good morning!

‍There’s a good case to be made for a melt up.

Hard to believe?

I get it … but there’s always a short-term reason to sell.

Just remember, we’re not short-term players.

We’re “in to win!”

Here’s my playbook.

3 signs of capitulation

Many of the big banks say it won’t happen because their high-muckety-muck analyst “so and so” says so.

Don’t fall for it!

I see 3 and laid ‘em out for the incomparable Stuart Varney ahead of today’s opening bell. (Watch)

PS: There will not be a warning bell if the rally gains legs - I hope you’re on board!

What earnings apocalypse?

70% of SPX companies have beaten revenue estimates for Q3 which is 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 – that’s 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 Street’s sell side analysts are suddenly very worried about. (Read)

Where were these people a year ago? Oh that’s right … telling you to buy Peloton, Meta and Zoom … all three of which I’ve repeatedly said were bugs in search of a windshield.

What’s next. Meta will go sub-$100 but there’s another stock that I’m more concerned about as I type. It’s time to switch horses.

I’m 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 People’s Congress. (Read)

Why Xi did this. Xi is as ruthless as they come and he’s packing the politburo with loyalists. Hu Jintao was a product of the people’s 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 … both are even stronger buys now that Xi has made his move. I’ll also be explaining that a bit more in the November issue of One Bar Ahead®. Upgrade to paid

So much for free champagne: AAL

What’s happening. American Airlines dropped a bombshell recently by announcing that it’s going to be getting rid of first-class seats on international flights “because customers aren’t buying it.” (Read)

Why you should care. Video has replaced the need to “hop a flight” for meetings and corporate budgets are down. Permanently! Contrary to what the media would have you believe, airlines will never be “back.”

Airline stocks are still a no-go this morning to my way of thinking.