Friday Four Play: The “Doin’ It Our Way” Edition
Dorothy, we’re not in Indiana any more.
What a wild ride back from Milwaukee, Wisconsin, that was. Sadly, I didn’t have time to visit Shotz Brewery. You don’t always have time for “doin’ it our way.”
On a side (side) note, Milwaukee is Algonquin for “the good land.” But don’t take my word for it … here’s Alice Cooper with the lowdown on Milwaukee.
Getting back to the market, did you see the story from Vanity Fair this week? The one that shows you can make literally billions by using Great Stuff’s “Trade War Cycle” chart?
Yes, I know they are pitching it as insider trading. For instance, on June 28, a trader purchased 420,000 e-mini contracts just before the end of the day. E-mini contracts are fractional futures contracts that can be traded on a variety of assets, including the S&P 500, Nasdaq 100, gold and currencies. They’re kind of like options on crack.
Then, on June 29, Trump tweeted that the trade talks were “back on track.” Those e-mini contracts netted a profit of about $1.8 billion.
The premise is that someone apparently knows what President Trump is going to tweet before he tweets it. The timing of those billion-dollar trades is uncanny, I must admit. But there are at least two things wrong with this conspiracy theory:
First, Trump doesn’t even know what Trump is going to tweet before he tweets it. (Prove me wrong? Email me at GreatStuffToday@banyanhill.com.)
Second, we all have enough information to do exactly what this supposed trader did … well, Great Stuff readers do, anyway. It’s called the Trade War Cycle chart. For reference, here’s where we are now:
There are two certainties with this trade war cycle. If the market falls too far, Trump will tweet something positive. Once the market recovers, Trump will once again prove he’s being tough on China.
It’s literally that simple. There’s no conspiracy here … I mean, there might be, but the Vanity Fair article certainly doesn’t have any definitive proof.
What we do have proof of is that, if you read Great Stuff, you could have had similar results.
What can I say except you’re welcome!
And now for something completely different, here’s your Friday Four Play:
No. 1: Hooked on a Feeling
I am both in awe of and terrified of this company’s name: Intuitive Surgical Inc. (Nasdaq: ISRG). Intuition is not typically a qualification for surgery. “I just feel like this is the right place to cut” is not something you want to hear from your doctor.
But that’s not why we’re talking about Intuitive today. The reason is that the surgical-systems maker just reported impressive third-quarter earnings. Intuitive beat on both the top and the bottom line, with earnings topping the consensus by a whopping $0.44 per share. Revenue was $1.13 billion versus expectations for $1.06 billion.
For those who don’t know, Intuitive Surgical focuses on robotics and artificial intelligence (AI) in the operating room. The company’s da Vinci surgical system has turned many intensive inpatient operations into simple outpatient procedures. It’s no wonder ISRG’s stock has surged more than 220% in the past five years.
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No. 2: Share a Coke With Your Portfolio
Zero sugar, big returns. That’s the sickeningly sweet story for The Coca-Cola Co. (NYSE: KO) today.
Coke reported third-quarter earnings that were largely in line with analysts’ expectations — so why the jump in KO’s shares? Growth.
Coca-Cola said it had “strong growth” in China and Japan, with Minute Maid, coffee and tea leading the pack. What’s more, Coke raised its cash flow estimates for the year and lowered its capital spending guidance.
For value investors, that’s the sweet spot — increasing cash and cutting spending. (Maybe Coke could teach the U.S. government a thing or two?)
No. 3: A Massive Adjustment
When Uber Technologies Inc. (NYSE: UBER), Lyft Inc. (Nasdaq: LYFT) and WeWork report billions in write-downs, everyone loses their minds. When Schlumberger Ltd. (NYSE: SLB) does it … no one bats an eye.
Schlumberger … how do you pronounce that name? I keep wanting to call it “slum burger.”
Anyway, the oil and gas equipment company reported a net loss of $11.97 billion, or $8.22 per share. But due to the magic of financial reporting, adjusted earnings were $0.43 per share on revenue of $8.54 billion (just ahead of the consensus estimate).
How is that possible? Because Schlumberger took a $12.7 billion goodwill charge. A goodwill charge is when a company writes down assets and liabilities that are more than their fair value. Basically, this happens when a company loses money on equipment or real estate, and it wants those losses off the books.
CEO Olivier Le Peuch — I’m not going to touch that name — attributed the write-down and the quarterly results to “a macro environment of slowing production growth rate in North America.”
Either way, investors are happy with today’s report, as SLB’s shares are up more than 2.5% on the news.
No. 4: Beer Slap Fight
Finally, on a lighter note, we have some beer drama brewing today. Anheuser-Busch InBev SA/NV (NYSE: BUD) is suing MillerCoors for — get this — stealing the recipes for Bud Light and Michelob Ultra.
I am flabbergasted. I am stunned. Not that MillerCoors — a subsidiary of Molson Coors Brewing Co. (NYSE: TAP) — is accused of stealing these recipes, but that anyone would think they were worth stealing.
Furthermore, Anheuser-Busch’s legal track record with MillerCoors hasn’t been that great lately. The company has already lost three legal rulings in federal court against MillerCoors.
It just goes to show that the rise of White Claw has put the entire beer industry on edge.
Besides, all you need is water, a little caramel coloring and alcohol … oops, I just leaked the Bud Light recipe.
Great Stuff: Help Your Friends Make Billions!
Are you hoarding all this Great Stuff for yourself?
I don’t blame you. If I had a financial e-zine with a trading chart that could help me make billions, I’d keep it quiet too.
But we’re not all vitriol and selfishness here. We like to share.
Puff, puff, pass … didn’t you learn anything in college?
Sharing is caring, and Great Stuff cares. It really does!
So, if you have a friend who still gets their daily financial news in that dry, Waspy old format from the major financial publications, forward them today’s copy of Great Stuff.
Liven up their day. Help them make billions too!
They’ll thank you for it.
Maybe they’ll even buy you some real beer with their winnings.
Until next time, good trading!
Regards,
Great Stuff Managing Editor, Banyan Hill Publishing