Friday Four Play: Pot, Pins, Jobs and Tariffs
There are two words that can put the fear of God in any investor these days.
Just two simple words: “Trump tweeted.”
Those two words turned yesterday’s Fed recovery rally into a panic-stricken retreat.
I’m not exaggerating here, either. Remember way back on Monday when the Great Stuff Chart of the Week talked about a possible VIXsplosion?
Since Monday, the CBOE Market Volatility Index (VIX), aka “the fear index,” has skyrocketed more than 59%.
That’s real fear. That’s real panic. That’s a VIXsplosion.
And all it took was, “Trump tweeted.”
It’s a stark reminder of a prophetic projection from Banyan Hill’s own Michael Carr. In the July 2 edition of Great Stuff, Michael quipped: “This is a perfect earnings season for stock pickers, not index investors.”
Pick the right stock, and you’re set. Pick the index … well, you get the point.
Michael Carr is a stock picker extraordinaire. He has a supersecret product he’s beta testing right now that just made 350% in four days! But don’t tell anyone I told you … it’s supersecret, after all. I’ll be sure to let you know when it’s ready.
Until then, you can sign up for Michael’s Precision Profits. In the past month, Precision Profits has had wins of 67%, 31% and 323%!
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Now that I’ve got you hooked up with Michael Carr goodness, here’s your Friday Four Play…
No. 1: Rockin’ Robin
He rocks in the White House all day long, hoppin’ and a-boppin’ and singing his song. All the little traders on Wall Street…
OK, that’s enough of that … that’s just silly.
Yesterday, President Trump tweeted that the U.S. would be levying a 10% tariff on $300 billion in Chinese goods.
This tariff will apply to the remaining imports that were not already covered by the 25% tariffs and includes quite a few consumer goods — especially electronics.
The market didn’t take the news well … at all. Consumer discretionary stocks dropped about 1.3% across the board on the news. Electronics retailer Best Buy Co. Inc. (NYSE: BBY) plunged 11% following the news.
Everything “Made in China” is affected, including AirPods, MacBooks, iPhones … basically any iThing you can think of.
I poke fun, yes, but I understand what the president is trying to accomplish. Wall Street also understands what Trump is trying to do. I think the problem is how he’s going about it.
We saw this week with Federal Reserve Chairman (and Wall Street’s unofficial father figure) Jerome Powell how touchy the market is with precise wording and hand-holding.
Trump is honestly trying to accomplish something good here. But he’s swinging around the big tariff stick, when the market [and your 401(k)] would much prefer a feather duster.
This week’s spikes in volatility, fear and uncertainty are proof enough. If you aren’t prepared for more of the same, now’s your chance to do so!
No. 2: They Took Our … Wait…
Another set of records for the U.S. economy. Employers added 164,000 jobs in July as the labor force hit a record high. What’s more, the economy has added jobs for a record 106 straight months, keeping the unemployment rate at 3.7%.
But Wall Street clearly isn’t impressed. Martha Gimbel, an economist at Indeed, summed up the market’s response: “In general, this jobs report was fine but not spectacular.”
Apparently, everything has to be “spectacular” now to impress Wall Street’s talking heads.
Maybe the Department of Labor should have tweeted about it. Wait — it did?
I guess that doesn’t work for everyone.
Despite setting records, the U.S. labor market is still slowing.
July’s jobs number was slightly below expectations. Furthermore, the labor market has added an average of 165,000 jobs per month in 2019, down from 2018’s average of 223,000 per month.
That’s the narrative on Wall Street right now. The economy is still expanding, but at a slower pace. That slowing pace has investors worried.
No. 3: Profitable Pot
Back in the May 28 edition of Great Stuff, I highlighted the “Price-to-Stoner Ratio.”
This little gem is the brainchild of Banyan Hill’s cannabis expert, Anthony Planas. It weeds out pot companies by ranking them based on their enterprise-value-to-production ratio.
One of the best pot names on that list was Aphria. Last night, the company proved why.
Aphria is the first major Canadian cannabis company to report a net profit. Sorry Tilray, Aurora and Canopy … you’re too slow.
The company said it earned CA$15.8 million on the quarter, with revenue up 75% year over year at CA$129 million. That’s a lot of green.
Aphria isn’t known for its massive U.S. expansion plans. It doesn’t have a flashy backer. What it does have is profit. There’s something to be said about taking the time to plan out your advance.
During the company’s conference call with investors, Aphria CEO Irwin Simon was asked about U.S. expansion. He had this to say: “Let me be clear: We’re always looking for opportunities in the U.S., but it needs to be the right opportunity, one that will create real and long-term value for our shareholders.”
That’s a man with a plan that investors can appreciate. And appreciate they have: APHA stock is up nearly 30% today.
I you’re looking for more pot ideas, Anthony Planas and Matt Badiali have the inside scoop on the five must-own pot stocks for 2019!
No. 4: Pins Are Moving the Needle
Photo sharing is big business. What else are you going to do with all those pictures you take with your smartphone? Have them developed?
No! You’re going to share them. That means revenue for Pinterest. A lot of revenue.
The company reported a 62% spike to $261 million in second-quarter sales, easily beating Wall Street’s targets.
Earnings were less inspiring, arriving at a loss of $2.62 per share. But initial public offering costs were largely responsible for that and shouldn’t be an issue going forward.
Pinterest even raised its full-year revenue guidance above the consensus.
There’s really only one caveat to this report. The majority of Pinterest’s revenue came from U.S. users. However, about 72% of the company’s 300 million monthly active users are international.
Right now, international users are a drain on cash flow. But, if Pinterest can monetize that 72% of its user base, revenue and earnings could really soar.
Great Stuff: What Are You Waiting For?
There are still open spots left for Banyan Hill’s annual bash, the Total Wealth Symposium!
The event takes place September 12 – 14. This is Banyan Hill’s premier annual event. And attending means you can rub elbows with your favorite experts: Paul , Michael Carr, Matt Badiali, Ted Bauman … they’ll all be there!
They’ll also have exclusive market advice and recommendations just for you. Previous attendees have had the chance to capitalize on gains of 1,665% in just six months!
That’s just insane.
What’s more, this year’s symposium is being held on the shores of Amelia Island, Florida. You’ll be surrounded by opulent mansions, extravagant parties, wealth and excess.
What better setting to plan out how to amass your own fortune!
But seats are limited … seats are always limited, you know. That’s just how these things go.
Once again, Great Stuff readers, I have your invitation waiting right here.
So, don’t wait another second. Reserve your spot now.
And if you’re lucky, you may even see me there!
Until next time, good trading!
Great Stuff Managing Editor, Banyan Hill Publishing