Three Toxic Stocks to Sell ASAP
Every week, my inbox is flooded with questions, many of which can be summed up simply as, “Which of these stocks should I buy?”
But, in times like these, I think the more important question to ask is, “Which stocks should I sell?”
Making real money in volatile markets isn’t just a matter of buying the right stocks at the right time. To keep your profits, you need to know what stocks to sell and keep off your portfolio. You need to know what toxic stocks could lead you to ruinous losses, even as the crowd around you rallies them higher.
04/29/2022 Buy, Sell, or Hold Transcript
Hey everybody! Shah Gilani coming to you with your BS.H, as in Buy, Sell, or Hold.
And don’t forget, I’m recording this on Thursday. It’s a little bit after 1:00 pm ET on Thursday. So, the Dow’s up 575 points right now, at 1.72%. The Nasdaq is up 2.69%, working back some of the losses they made the other day. Where we’ll end? Hmm. Who knows. It’s a tough market out there.
What was front-burner news today? Something you’d think would carry to a selloff, but it didn’t. The markets rallied on first-quarter advanced GDP look. Guess what? It was negative, down 1.4%. So, we don’t have any growth. No GDP growth. We have a contraction of 1.4%.
Now, two consecutive quarters of negative growth is the definition of a recession. Are we heading towards that? Well, we got one quarter under our belt with a negative, but that’s advanced one month. Now, we’ll get a second, third, and final look at GDP. So, we are probably going to see it get a little better, but it looks like it’s gonna be negative in the first quarter.
What did the market do? It rallied. SO, let’s talk about BS.H and start with Meta Platforms Inc. (FB), because it rallied big time. Earnings came out after the bell and the stock popped big time.
Okay. Earnings were not impressive. The only thing that appeared to be a positive to me… Some of the numbers were okay, but really on a sequential basis, that’s one thing. But overall, given the trajectory of a “growth company” with a platform shift to the metaverse, I’m unimpressed.
What the market liked was, what they were thinking would be negative momentum on active user growth was better than expected. It was negative in the fourth-quarter of last year (which was the first time that Facebook actually lost daily active users). So, everyone thought, “okay, if we get another quarter of that, that’s not good.”
But they reversed it! But not meaningfully. 31 million over the quarter in new daily active users. That’s a positive. Can they continue with some form of momentum there? Who knows.
Bottomline, I’m unimpressed. The numbers were unimpressive. You shouldn’t be impressed.
It had a nice pop. If you own it a lot lower, then good for you. If you bought it to try and catch a bounce, good for you…
Where’s the stock gonna go? The whole metaverse thing… They’re already cutting spending, and they’re gonna spend $10 billion on the metaverse. They’re hiring thousands of new people. It’s a sell.
Don’t go all Willie Nilly thinking, “yay! It’s turning back around. It’s going to be the growth stock of old!”
No. Right now, take your money. You got a nice little pop in it. If you own it lower, sell it. If you own it higher… I don’t know why you’d wanna hold onto it. You know, a wing and a prayer, maybe you think it’s going to fill that gap – in which case, you are hoping and praying. I would say the gap is between 245 and 295. If you think it can get back to 295, good luck with that.
I’m not into Meta anymore. I loved it. I thought it was a great stock. Had a great ride with it…
Look at the chart. It looks like death warmed over. It’s a sell people. Sorry.
Next up, The Walt Disney Company (DIS). A lot of people asked me about Disney since earnings are coming out on May 11.
If you look at the chart, it’s awful.
Now, last quarter, when earnings came out in February, the stock had a little bit of a run up because, you know, the news on streaming was good. They acquired new subscribers. Yay. And then the stock simply fell out of bed.
So, I don’t know that they’re gonna beat on some tremendous level now and all of the sudden the stock’s gonna pop. No, people. I hate to say Disney is a sell, just like Meta.
Where’s it going to go? You have better places to put your capital. Sorry, it’s a sell.
I know the company. I love it. It’s wonderful. It’s got the cool stuff, the theme parks and the streaming and the films and blah, blah, blah. Sell it.
Next up, The Boeing Company (BA).
Folks, don’t buy stocks that are falling outta bed. You don’t try to catch falling knives in a market that is this volatile. Boeing looks like its on death-watch. It’s not going out of business, but if you look at the chart… Why would you want to own it?
If you still own it, you want to sell it. If you’re one of those people that likes to hold onto you losers, sure, hold on to it for a little bit. See if you can get some kind of bounce at some point. But if you endured so much pain for so long, take your capital and go find something else that can make you money.
Boeing is not going to, all of a sudden, jump 25%, 50% in the next year. There are plenty of other plays that you can make that kind of money on in the next year. You can make 100% in two years or more. Boeing is not one of them. Meta is not one of them. And Disney’s not one of them.
I hate to say, but they’re all sells. I’m not trying to be a Debbie Downer here, but don’tbuy stock that are making new lows. Don’t buy stocks that are changing their business model, especially when you don’t know what that new business model will eventually be. Whether it’s going to be adopted by the people they expect to use it.
And of course, I’m talking about Meta.
Now, last, I’m gonna give you one more, because, crazy enough I got a lot of questions about this one: Twitter (TWTR).
If you owned it, if you managed to buy it lower in the low 30s and you got this nice pop out of the Elon Musk deal, good – hang on.
But, right now it’s slipping. If you don’t own it and you’re thinking about buying it, don’t buy it here. Maybe to $54 and change where Musk has his bid to buy the whole company. It’s not worth it, okay. Because he hasn’t bought it yet.
There are other things that could happen. Stranger things have happened to Elon Musk and some of his business deals, so I wouldn’t buy here. There’s no upside. There’s no worthwhile upside for me, but I wouldn’t short it here.
If you own I, hold onto it. See if you can get the full $54 and change out of it. But, if you’re nervous that the deal, for some reason, might fall apart, then maybe put a stop at $45 and get out. If you’ve bought it lower, you made some money. If you own it higher, and a lot of people do own it higher, just try and hang on.
Then, hopefully that $54.20 deal closes and you get a little more out of it than where it’s trading now. Which is, right now, not so good looking at $49 and change.
Why is it not trading higher? Because there’s a possibility that the deal won’t close. So, Twitter is a hold right now. Hold it until it goes below $45, then just get out with whatever you’ve got. Move on.
Meta, formerly Facebook, is a sell. Don’t try to catch it just because it had a nice bounce today.
Disney is a sell. Ain’t no momentum people. Earnings out on May 11. Even if it beats estimates, where is the stock going to go? They beat last time, the stock popped for a second, then it collapsed and is still falling.
And Boeing. You’re gonna get really burned if you try to catch a bottom here. There are plenty of other stock plays to make and I’m gonna start giving you some good ones that you might wanna buy. There are some good deals around right now. Some cheap stocks that you want to accumulate.
Next week, I’m gonna give you more positive stuff. Have a great weekend. I’ll catch you on Monday.