☕ Why this could be a “slam dunk” earnings season

Good morning from Orlando!👋 

Boy, I love this east coast time zone stuff. 

I’ve already been to the gym where I got in a blistering 70-minute workout, had a lovely coffee and, shortly, breakfast with my bride. 

All before the opening bell! 

Here’s my (quicker than usual) playbook before I head into today’s meetings: 

1 – Earnings revisions are the most negative on record since December 2022 

Many people will interpret that as a sign of weakness but from an investing and trading standpoint, it’s a sign of strength. 

Why? 

Because low/negative revisions set up a “slam dunk” earnings seasons for the simple reason that companies will find it easier to “beat.” 

2 – Not all tech is the same 

ASML’s shares dropped ~16% yesterday after ASML published the quarterly report a day early due to a ‘technical error’. (Read) 

And the global chip market went with it. 

Do NOT take the bait. 

Not all tech is the same. It was mainly global chip makers who got pounded while US players held up their end of the bargain better. 

Buy the best ignore the rest. 

3 – Amazon goes nuclear  

News is breaking as I type that Amazon is going to develop small module nuclear reactors. (Read)

I still won’t touch the stock but, no doubt, quite a few people will. 

Keith’s Investing Tip: Amazon is a widely held stock and popular, which means that Wall Street will a) defend it and b) have an incentive to drive prices on stories like this one. My guess is a choice like Zap Energy will get there first, probably before the regulatory paperwork for the new nukes is even filed. And, full disclosure, I am an investor 😀 

4 – Walgreens still not a healthy choice 

Walgreens posted earnings with both sales and profits exceeding Wall Street expectations, but the company also announced that it would close 1,200 stores within 3 years. (Read) 

Stock +16% on the news but has still returned –75.42% over a 5-year period compared to 121.38% from Walmart or 110.18% from VOO, a popular ETF. 

5 – Morgan Stanley puts up the numbers 

First Goldman, now Morgan Stanley. 

I wouldn’t expect anything less. 

The company chalks up gains to wealth management, trading and banking results. (Read) 

Should you buy it? 

Morgan Stanley has had one heckuva run but I worry that it doesn’t have the breadth or the balance sheet strength if and when there’s another downturn. My favorite, on the other hand does. (Learn More) 

Bottom Line 

85% or more of all buy/sell decisions are wrong – meaning investors buy when they should be selling and sell when they should be buying.  

Keep your emotions out of the equation.  

As always, MAKE it a great day.  

You got this - I promise.  

Keith 😊 

PS: I will be attending the Money for the next several days so there will not be a regular 5 with Fitz. But I will be posting on Twitter and Instagram as time permits!