Editor’s Note: As Chief Investment Strategist of Total Wealth, Shah believes in making his track record of recommendations easily accessible to all readers within seconds – and that’s why he’s compiled an Archives page.
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 …
A year ago, the Fed had no plan to combat rising prices. Now they want the world to know they’ve got a plan to beat back what looks like increasingly sticky inflation because now their credibility is at stake.
That plan, which should be pre-set, steady, transparent, and formally announced as “forward guidance,” is instead going to be made up every six weeks when the Federal Open Market Committee (FOMC) meets.
Whether to raise the fed funds rate 25 basis points, 50 basis points, or 75 basis points (a basis point is one one-hundredth of a percentage point) at the FOMC’s upcoming May 3-4 meeting, or any subsequent meeting, isn’t set. And that is upending both stock and bond markets, and proof the Fed’s out of control.
The Fed raising rates isn’t going to kill inflation. There’s no way they could ever raise rates enough to kill it, and that gives us an opportunity.
The supply chain nightmare is catching up to e-commerce heavyweight Amazon.com (AMZN).
This time last year, analysts’ consensus estimates put AMZN’s earnings per share (EPS) at $15.79. In anticipation of this Thursday’s earnings report, that estimate fell 40%. That’s a huge year-over-year crunch – one that made some investors sell one of the best long-term investments out there.
As I mentioned in Monday’s Watchlist, sometimes the best way to profit is by going against the grain. Now, I’m saying it again. Don’t follow the crowd.
If Amazon reports EPS below $9.22, buy the dip – and I’ll tell you why in today’s video.
Apr 25, 2022
Sometimes, the best short-term trades are simply a matter of going against the grain.
When everybody is on one side of a trade, there comes a point when the best risk/reward scenario comes from betting against the herd. Legendary investor Jim Rogers compares this to everyone getting one side of a boat. When that happens, he says you probably want to be on the other side of that same boat…
Or risk getting dumped in the water as the boat tips.
Speaking of investors all being on one side of the boat, Wednesday was a pretty darn spectacular day where Netflix Inc. (NFLX) is concerned. The company reported results for the first quarter that missed various estimates, and the stock dropped nearly 40% before rebounding slightly in early Friday trading.
That’s what I call a serious beatdown. An overblown beatdown, at that, but we can use it to our advantage.
There was a running theme this week in the stocks you sent me: metals.
Gold, silver… precious metals that everyone expected to pop with the war in Ukraine raging on – but that’s not what’s happening. Frankly, GLD, GDX, and SLV are a waste of your capital right now. There may be a little bit more upside to each, so put your trailing stops in place, take your profits, and get out.
There are better places to put your money, including an ETF trade and a few of my favorite banks.
Check out my video below to learn more or click here to read today’s transcript.
More analysts, economists, and former Federal Reserve officials are predicting a recession – one that will stagger the U.S. economy. That’s frightening investors into selling profitable positions and going to the sidelines.
I say they’re wrong, and getting out of the market now is a mistake, and I’m telling you why in today’s edition of Total Wealth.
This company is one of my favorites. It’s a mega cap company with a capitalization over $2 trillion. Its revenue on a trailing-twelve-month basis is $185 billion. Its profit margin is 38.5%… and it’s still growing. There is no reason …
Apr 18, 2022
Let me tell you: My first job on Wall Street was with the Chicago Board Options Exchange (CBOE) in the early 1980s – just before the start of the great bull market… So I’ve been doing this for a very …
I said it once; I’ll say it again: inflation has not reached its peak.
While some investors and traders are piling back into the stock market – misguided by news claiming that March’s sky-high inflation measures were as bad as inflation would get – veteran companies watching the markets won’t be so reckless.
That’s one of the reasons I’m watching The Coca-Cola Company (KO).
The company will report Q1/2022 results on April 25. As we get closer to that date, the stock has been in an almost perfect upward trend, gaining 14% since March 10, 2022.
For the quarter, analysts expect Coca-Cola to report revenue and earnings of $9.82 billion and $0.58 per share, which would represent year-over-year increases of 8.9% and 5.45%, respectively.
Based on the company’s history, I expect it will beat estimates.
But, I’m focused on forward guidance and whether or not the company believes it can pass along higher input costs to the consumer.
I think the company will err on the side of caution and tamp down forward guidance in the face of inflation that’s running very hot.
And I think that could cause a pause in the recent rally – and present us with our next play.
This week, Twitter, Delta, and JP Morgan Chase have all been in the spotlight – and many of you are asking: What should we do with these stocks? Buy? Sell? Or hold on to our shares? Well, in today’s BS.H, …
On Tuesday, when the March reading of the headline Consumer Price Index (CPI) came out hot, but a tad less than jacked up expectations, stocks rallied. On Wednesday, when the Producer Price Index (PPI) came out hotter than hot, stocks …
Fertilizer prices are through the roof.
According to the USDA, over the past year, urea, liquid nitrogen, and anhydrous ammonia (three kinds of commonly fertilizers) grew 149%, 192%, and 235%, respectively. For farmers worldwide, this unexpected consequence of the Russia-Ukraine War has a steep cost – but they will pay it.
Why? Because they have no other choice. They need it and, as a result, fertilizer companies are hitting it out of the park, especially the one I am recommending in today’s video.
Click the video below to learn how to play CF Industries, or click here to read the transcript.
Apr 11, 2022
With sanctions on Russia ramping up, security experts warn that a retaliatory cyber-fight could be coming to the West. Whether or not a full-blown cyberwar with Russia ever materializes doesn’t matter from a short-term trading perspective. All that matters is …
Apr 07, 2022
Claims that we’re 100% heading into a recession (because the never-wrong inverted yield curve says so) are fake news. This time the recession indicator is wrong.
The yield curve is a simple concept. It shows graphically what different maturity bonds pay investors in terms of the yield (or interest rate) they pay.
Super short maturity instruments, like the fed funds rate (the interest rate banks charge each other when they lend money), yield very little because the loan is only overnight. The risk of default in a day is infinitesimally small. The yield on a 6-month T-Bill would be higher due to investors lending money to the government for 6-months also wanting more interest. The yield on a 2-year Treasury note would be higher because of the longer maturity of the loan. The 10-year yield would be higher still. And so on, out to 30-year bonds.
When graphed, these yields typically slope upwards like the Treasury yield curve shown below.
The yield curve is said to be inverted any time the yield on a shorter-dated maturity is higher than a longer-dated maturity instrument – in other words, a reversal of the chart above. What everyone’s panicking about was an inversion of the U.S. Treasury 2-year note and U.S Treasury 10-year bond (referred to as the 2s and 10s in Wall Street Parlance).
Over the past 30-days, the yield curve (as measured by 2s and 10s) has inverted a couple of times. At some points, this inversion was only by a few points or a few tenths of a percent, but an inversion nonetheless.
And this is concerning to some because, historically, whenever the curve inverts (even by a tiny amount), a recession follows. That’s what’s making headlines now.
The graph below shows the spread between 2s and 10s in the blue line. Whenever the spread goes negative, a recession (the gray longitudinal bars) occurs. So, it’s been a pretty good indicator so far.
But dare I say, “this time is different.”
Apr 05, 2022
Last year, some analysts condemned Chinese stocks listed on U.S. exchanges as ‘uninvestible.’ But I didn’t buy that claim. Yes, Chinese regulators had sent a clear message to those companies: You can’t do anything we don’t want you to do. …