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What to do if you own BABA and TCEHY

Oct 24, 2022

Good morning!

ā€Thereā€™s a good case to be made for a melt up.


Hard to believe?


I get it ā€¦ but thereā€™s always a short-term reason to sell.


Just remember, weā€™re not short-term players.


Weā€™re ā€œin to win!ā€


Hereā€™s my playbook.


3 signs of capitulation

Many of the big banks say it wonā€™t happen because their high-muckety-muck analyst ā€œso and soā€ says so.


Donā€™t fall for it!


I see 3 and laid ā€˜em out for the incomparable Stuart Varney ahead of todayā€™s opening bell. (Watch)


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


What earnings apocalypse?

70% of SPX companiesā€Æhave beaten revenue estimates for Q3 whichā€Æis 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€“ thatā€™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 Streetā€™s sell side analysts are suddenly very worried about. (Read)


Where were these people a year ago? Oh thatā€™s right ā€¦ telling you to buy Peloton, Meta and Zoom ā€¦ all three of which Iā€™ve repeatedly said were bugs in search of a windshield.


Whatā€™s next. Meta will go sub-$100 but thereā€™s another stock that Iā€™m more concerned about as I type. Itā€™s time to switch horses.


Iā€™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 Peopleā€™s Congress. (Read)


Why Xi did this. Xi is as ruthless as they come and heā€™s packing the politburo with loyalists. Hu Jintao was a product of the peopleā€™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 ā€¦ both are even stronger buys now that Xi has made his move. Iā€™ll also be explaining that a bit more in the November issue of One Bar AheadĀ®. Upgrade to paid


So much for free champagne: AAL

Whatā€™s happening. American Airlines dropped a bombshell recently by announcing that itā€™s going to be getting rid of first-class seats on international flights ā€œbecause customers arenā€™t buying it.ā€ (Read)


Why you should care. Video has replaced the need to ā€œhop a flightā€ for meetings and corporate budgets are down. Permanently! Contrary to what the media would have you believe, airlines will never be ā€œback.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.


Letā€™s get a super STRONG start to the week.


I am with you every step of the way!

 


Keith

 

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