In the market, MONEY + TIME = MORE MONEY!
THIS IS NOT PROFESSIONAL INVESTMENT ADVICE, WE WENT TO ART SCHOOL
May 2022: As the conflict (war) in Eastern Europe continues, news headlines about oil/natural gas/wheat supplies from Russia and Ukraine will create huge volatility in the commodities markets. We are betting on a consistent rise in oil and natural gas prices thru the summer and into fall.
Our price target for natural gas is $15.00/MMBtu. We also believe that oil will test the $150/barrel level.
In equities, we are buying companies with strong and consistent revenues. This is a risk-off market with rising interest rates, ridiculous inflation and a looming recession (already one quarter of declining GDP (the technical measure of a “recession” is two consecutive quarters of declining GDP)). Oil and gas exploration companies will thrive as they refuse to increase drilling/fracking to appease the green energy nature lovers, keeping prices in an upward trend due to increased demand (remember “re-opening” and the traveling everyone is so anxious to do), all while exporting to countries starved of Russian energy at increased prices. Blue chip companies, especially ones that reward shareholders via buybacks and dividend payments, are definite buys. The SPY ETF should not be overlooked- nor should DIA. Creating a recurring purchase in either of those is highly recommended- the “dollar-cost averaging” technique will pay off as the market trades sideways for the rest of the year.
In the near term, we *could* see a final bottom on SPY around the 355 area. We think we’ll trade in a channel between 385 and 440 and we won’t see new highs until later in 2023.
Adding to the selling pressure/general FUD is China claiming a new wave of “covid” cases and lockdowns. Our opinion is that these headlines are meant to slow/cease the cheap manufacturing of goods that us Westerners are so fond of (they can shut down the Foxconn plant that makes iPhones…)
Once the initial fears of a long, drawn-out recession, higher inflation and a third World War begin to subside (early 2023) we believe we’ll see increased buying in growth/innovation/speculative stocks. The Ark Innovation ETF (ARKK) will probably do well (finally…).
A bet we are making is a rally in gold prices up past the recent highs right below $2,100/oz. With the dollar index at multi-decade highs, a correction is more than warranted and with gold at critical support (along with fundamental factors- war (fear), inflation (uncertainty) and outflows from equities (doubt)), the price of gold is ready to make fresh all-time highs.
Bitcoin has yet to fill the CME gap at $24,605 even with the recent drawdown. It came close but we’re not fully convinced that the worst is behind us. Along with that gap there, the weekly 200EMA is right below $24,000:
All said, we believe that the markets are reaching a cyclical bottom and that stocks bought these next few years will be the ones that you hold for a generation and leave them for your kids, or to pad your own retirement.
AMZN (It’s Amazon. Besides their e-commerce business, their AWS cloud subsidiary is creating a large chunk of Amazon’s total revenue.)
AAPL (Apple, ‘nuf said. The most powerful company in the market- they make up 7% of the SPY and are a strong leader in tech. “As AAPL goes, so goes the market”) (pays dividends)
SBUX (the fanciest drug dealers on earth) (pays dividends)
TSLA (all hail Elon Musk. It’s “a battery company that makes cars”)
ABNB (the hotel of the future)
SQ (fintech/Bitcoin mining soon)
SCI (funeral/cremation services… think about it.) (pays dividends)
LIT (ETF based on lithium batteries- along with rare-earth metals, mining and exploration to accommodate the burgeoning EV industry will thrive) (dividends!)
BA (Boeing makes satellites, missiles… not just planes) (+ dividends)
SMG (Scott’s Miracle Grow… growing profits and sowing dividends)
BNGO (genome analysis, their optical mapping system, Saphyr, is gaining huge attention
IIPR (REIT dedicated to renting out cannabis grow spaces) (pays dividend)
VCEL (regenerative cell therapies for knee injuries)
DNUT (Krispy Kreme. Pays a small dividend… people love sugary snacks.)
ADIL (currently in trials with their drug for Alcohol Use Disorder (AUD))
ATHX (stem cell treatments for stroke patients and “Covid19” respiratory symptoms) “STILL AN ABUNDANCE OF OPPORTUNITY” (09/01/20). They just announced enrollment in their traumatic injury trial. Their Japanese partner Healios just released extremely positive results for their phase II ARDS trial and also announced full enrollment in their trial for ischemic stroke.
GSAT (telecom/satellite/5G penny stock play)(HUGE BUYOUT CANDIDATE-Probably AAPL) Qualcomm to Include Band N53 in New 5G Flagship Modem
cryptocurrencies (BTC, ETH, DOGE XRP, XLM, ATOM)
Resources for trading:
TradingView (charts! study them.)
FinViz (very clean and easy source for news and analysis)
CBOE Book Viewer (invaluable resource! follow the big money)
Market Chameleon (in-depth price action stats, options-focused)
IBorrowDesk (detailed and frequently-updated short-selling info)
Swaggy Stocks (social media-based market analysis tool)
Investopedia (database of learning, v educational)