WYMTM - Ep. 11
This is what you missed this week in the markets.
A portfolio update (and closing AST Trades) were issued this week.
Energy Longs from The Report made subscribers a lot of money
Alibaba - A lesson in patience.
I’ve been trading this name since the IPO back in 2014 and they just completed (in Q1) a larger $4B buyback but the stock was effectively sideways. Everyone has a view as to why and, normally, with that type of commitment, the stock would be higher.
My view is simple. The stock just does not have enough demand - as simple as that is to say if people wanted it then it would be higher - especially given how “cheap” it is.
If you have the capital where you can just sit back, buy and wait, then using a little market timing ( I suppose) doesn’t matter - but in my world, regardless of fundamentals, I still want to look at some technical signal to back the thesis.
Right now this stock needs to clear a few price levels/areas of interest before a trade gets put on.
$76s need to clear for me to look long first
Low $60s get me interested as well - just waiting to put a position on
There was this Tweet I saw this week here of 4 wrestlers fighting a lion in a tug of war match with rope….as expected the lion won. The point is, you have to know your limits both in life and markets and as much as I think this stock SHOULD be trading higher it’s not. So, instead of being a hard-head and letting the ego get in the way, (many of you are really hard headed) I’ll just wait it out until price gives me a catalyst to get in.
The Market at Large
That dip this week was brutal - I went out to cycle (first time in 4 years) to get some cardio work in and came back to the market down a few handles.
Last week my thoughts were that you would get rotation out of Mag 7 names into Q2 and that the inflation/commodity trade would rage on. You saw oil run hard this week to the $89 target I had.
I get the obsession with the S&P500 for most - it’s relatively easy, you put your money in, you sit back wait and then tell everyone you’re a genius (just don’t tell them the part where you check quotes every 5 min to see if your account is okay).
The problem with that is the Fed, at some point, is going to cut and then inflation is really going to rage and then we have a new problem on our hands.
Then the other problem is not knowing how to short when the time comes or how to rotate our into other sectors/trade ideas.
The commodity and related stocks trade, so far, has done well - it performed well since January in various oil stocks and materials are just getting started.
I gave comment to US World Report on a few Natural Gas and materials names when he asked why I would own outright stocks v. commodity.
They cut my quote but this was it in that article -
Rather than invest in futures-based natural gas ETFs, buy-and-hold investors are better off with stocks or funds of natural gas producers or utilities, such as the first two funds on this list.
Owning companies instead of futures allows investors to not only take advantage of long-term share price gains, but also to benefit from share buybacks and dividends, which futures don't provide.
The technicals on the S&P500 have not changed much from last week so here is the same chart. My caution at these highs /this area still remains high.
Reader Q&A
Q: With inflation going on, how did you conclude that metals will be the play, is this past experience?
Q: When looking for share buybacks, is there a dedicated website for this, and what is the time frame when someone buys shares and the public knows about it?
Studying past history of cycles
A few websites discussed in the video
Will discuss on the weekly video on YouTube.
https://youtu.be/LgCt4SSJFik?si=9U5VOhtInu7hWU9J
The video from what you missed this week