Videos
December 17, 2024 | Daily JAM, Short Term, Videos |
Today’s Hot Money Moves NOW is U.S. Dollar. The dollar has been on a good run and is up 7% in the last three months, 2% in the last month. I expect this to continue with higher tariffs, and a Fed that will remain steady while other currencies are seeing more volatility. To get in on this you can buy an ETF like Invesco DB US Dollar Index (UUP), currently up 10.19% YTD with a 75 basis point expense ratio. Another option would be the WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU), up about 11% YTD with a 50 basis point expense ratio. WisdomTree buys Treasuries while Invesco uses futures but both are similarly sized ETFs and good ways to play the US dollar.
December 10, 2024 | Daily JAM, LNG, Videos |
Today’s Quick Pick is Cheniere Energy, (LNG). Cheniere liquifies natural gas and sells it globally. The stock is up about 32% YTD. The company is about to put seven more units of natural gas production on line, and it looks like they’ll be selling and distributing that gas, as scheduled, by the end of the year. This will mean more revenue from an actual plant producing more LNG, not the idea or a theory that more gas will maybe be put out soon. The incoming Trump Administration will be light on regulation for natural gas and there is rising demand from data centers looking to guarantee their own energy needs. I already own the stock but if I didn’t I’d certainly be adding it to my portfolio right now.
December 5, 2024 | Daily JAM, Videos |
Today’s video is What if the economic consensus on tariffs is wrong? It would be really bad news for stocks. The current consensus among economists is that tariffs will be inflationary as companies pass on rising prices to consumers. However, as Nir Kaissar recently wrote in an opinion piece for Bloomberg, this may not be correct. He used McDonald’s as an example. In February, McDonald’s CEO Chris Kempczinski said that the fast food restaurant has been losing low-income customers–houseold income of $45,000 or less– as the cost of its meals has risen. The price of a Big Mac, for example, has risen 25% since 2019, even though the price of raw materials has not risen at that rate. The operating margin at the company gone up and Wall Street expects that to continue, even as the company has lost customers. The company announced that they’d be offering a new, low price menu in an effort to retain a larger low-income consumer base. If more companies go in the direction of cutting costs to retain customers rather than passing on the cost of tariffs to consumers, Wall Street will be in for a big, unwelcome surprise in earnings since the current analyst consensus looks for operating margins to continue to climb in 2025 and 2026. 2025 is sure to come with volatility and uncertainty until we have a better idea of how high and far reaching the tariffs will be, and how companies will respond to them.
November 19, 2024 | Daily JAM, Jubak Picks, Videos |
Today’s Quick Pick is Goldman Sachs (GS). This is not a cheap stock. Goldman has had a good run in 2024 and is up 55% year to date. But this is the stock to use play the financial deregulation policies of the Trump administration. We’re moving from Biden’s administration that had a relatively high degree of scrutiny in merger and acquisition deals to an administration that will come close to approving any deal Wall Street proposes. The deal pipeline is full. Companies that were waiting on the election results to move deals forward will start the process as soon as the new President is inaugurated. Running an M&A deal is incredibly lucrative for an investment bank. Goldman Sachs is a big player in this market and will benefit from doing M&As and LBOs. This pick is how I’ll be playing the Trump financial deregulation and I’ll be adding it to my Jubak Picks portfolio tomorrow.
November 15, 2024 | Daily JAM, Videos |
Today’s video is Fed One and Done in December? On November 13, the CPI inflation numbers showed inflation ticking up slightly, but the market still believes the Fed will cut rates again in December. On November 13, the CME Fedwatch tool had it at 83% odds we’ll get a cut and I think it’s almost certain. However, when the Dot Plot forecast of GDP, inflation, and interest rates is released in December, I think we’ll see much more uncertainty for the future and likely a planned pause. The three major factors poised to affect the economy are a substantial tax cut, high tariffs and the possibility of mass deportations promised by the president-elect. While two of those items may cancel each other out–with tax cuts being massively stimulative and tariffs cutting into growth by 1.5-2 percentage points while raising costs for consumers, the question of deportations remains. Mass deportations could result in a huge labor shortage and disruptions to supply chains, leading to higher prices. The economy will be under a lot of inflationary pressure from these potential policies and it’s likely the Fed will announce a pause until they see how this all shakes out.
November 8, 2024 | Daily JAM, Videos |
Today’s video is Rally to Continue Through December; I’m Worried About January. While I recorded this video on November 5 (before the election results), I still believed we were looking at a rally through the end of the year. Looking at the patterns of earnings and cash flow, and with the election complete, we’ll continue with this upward movement until January. Generally, rallies happen every December as money managers look to buy to “window dress” their portfolios at the end of the year. Now that the election is over, any pre-election hedges will turn into more cash entering the market in December. Fourth quarter earnings will likely be the best of the year but the problem is that 2025 will not see as much earning growth as 2024. Likely, in January, companies may issue negative guidance for the year ahead. I don’t expect a depression or recession, but I do think we’ll see a slow down/pull back and we’re certainly due for 5-10% correction. Continue to ride the wave through December, and then look to make some profits in January. Selling in the new year will also mean you don’t have to take the tax hit this year
November 7, 2024 | Daily JAM, Dividend Income, Videos |
Today’s Hot Button Moves NOW video is “Yield Drought.” CDs that used to pay 5.25% are now paying closer to 4.90% on the high end and Treasuries yields are also falling. As stock prices rise, dividend yields fall to. I think this yield drought will continue to get worse. You have to be opportunistic and BE ready for bouts of volatility. Keep an eye out for temporarily depressed stocks and buy those for the yields. I’ll be releasing a special report on dividends and yield drought next week. Keep an eye on your email or subscribe to get alerted when that report drops.
November 6, 2024 | Daily JAM, Videos |
Today’s Quick Pick is Fortinet (FTNT). Fortinet is a cybersecurity company with a concentration in firewalls. They have about 15% of the firewall market. Firewall sales have a four or five year cycle as technology develops and companies need to upgrade their security. Morgan Stanley recently predicted the firewall replacement cycle is likely to begin in the second half of 2025. Fortinet is currently at a 20% discount to Palo Alto Networks, the leader in the cyber security stock sector. FTNT is profitable (GAAP and non-GAAP) with their non-GAAP earnings from the second quarter of 2024 showing 35% profitability. Morningstar predicts operating margins will grow to 38%-40% by 2028. I’ll be adding this to my Jubak Picks portfolio with an eye to 2025.
May 15, 2024 | Daily JAM, Perfect Five-ETFs, Videos |
Today’s Hot Button Moves NOW video is Buy Equal Weight S&P Indexes. If you’re concerned about volatility in the tech sector but want to stay in the market, equal weight S&P indexes may be a good alternative. Stocks like Nvidia with a market cap of around 2 trillion, have a lot more weight in the common version of the market cap weighted S&P 500 index than a stock with a smaller cap. In the last week or so, we’ve seen equal weight indexes converge with the longer-term out-performance of the weighted indexes. Using an equal weight index lowers your exposure to the big, now more volatile stocks while keeping you in the market. The Invesco S&P 500 Equal Weight ETF (RSP) is a low expense ratio ETF (.2%) with about $55 billion in assets under management. Year to date, RSP is up 4.68% versus 9.9% year to date for the market cap weighted ETF from Vanguard (VOO). However, for the last 3 months you see a 4.3% return for the equal weight index versus a 4.19% for the market cap weighted index. In the last week, for the first time in a long time, the equal weight index outperformed the weighted index. While one week isn’t a trend, it does seem like the returns are converged. Shifting some S&P exposure from the large cap stocks to this equal weight ETF is a good choice to stay in the game with less volatility. I’m going to make this shift in my Perfect 5 ETF Portfolio on my subscription JubakAM.com site tomorrow May 16.
May 10, 2024 | Daily JAM, Videos |
Today’s video is How big a danger is consumer debt? The Federal Reserve has been slowly trying to get inflation down one more percentage point by slowing the economy (without crashing it). One of the things the Fed looks at is how consumers are doing. Consumer revenue is about 70% of the overall economy and consewuently the Fed has been keeping an eye on consumer debt. At the moment, debt as we can measure it, is at a high level with credit card delinquencies at 3.5% in December 2023, the highest since the current data series istarted in 2012. But that number doesn’t capture everything gong on with consumer debt since the increasingly popular Buy Now, Pay Later products aren’t included in the big consumer debt measurements. Thes products let people stretch or delay payments by cutting them into installlments. The Buy now/pay later market is currently only about $18 billion but is projected to hit $700 billion by 2029. What’s th deliquency ratw for Buy now/pay later? No one knows because the companies providing Buy Now, Pay Later programs don’t report delinquencies to credit bureaus. Anecdotally, the delinquwncy rate seems high. A Bloomberg survey found that about 43% of people in Buy Now, Pay Later programs say they’re behind or feeling pressure on their payments. 28% say they’re delinquent on other debt as a result of these payments. Th Fed faces a tough enough job of sailing the economy to a safe harbor without having to steer blind n a big and growing part of the markrt for consumer debt. My worry is that the economy may be slowing faster than the Fed would hope or can accurately measure. Keep an eye on this as the Fed continues to push rate cuts further and further down the road.
May 8, 2024 | AMZN, Daily JAM, GOOG, Long Term, MSFT, Top 50 Stocks, Videos |
Today’s Quick Pick is Cloud Service Infrastructure Stocks. Normally I’ll choose a specific individual stock for Quick Picks but in this case, I thought I should highlight the entire sector. It’s impossible to overstate the importance of AI technology’s effect on the economy as a whole but it’s also important to look at the individual companies and sectors that benefit from the demand this technology brings to the market. AI has created a revival of growth in the cloud service infrastructure sector, as demand for more processing on databases to run AI programming continues to increase. The sector has seen a revenue growth of about 21% year over year in the first quarter of 2024. The sector is dominated by three companies with Amazon (AMZN) holding the largest share at 31%, and Microsoft (MSFT) with 24% and Alphabet (Google) (GOOG) with 11.5%. This is a $300 billion market, and those three companies have about 66% of it. Smaller players like Alibaba (BABA) and Oracle (ORCL) have A LOT smaller shares at 4% and 3%. However, even that 3% of the market puts Oracle’s cloud revenue at $5.1 billion in the most recent quarter. Revenue in this sector is likely to continue to grow and it looks like good news for all of these companies that set the tone for the market. This is yet another way to get in on the AI boom.
May 6, 2024 | Daily JAM, Videos |
Today’s Hot Button Moves NOW video is Tech Worries. In my last video, I suggested the normal advice of “go away in May” may be valid again this year because of the revenue patterns I’m seeing in the technology sector, especially tech/consumer stocks, like Apple (AAPL). On May 2nd, Apple beat $1.50 expectations by reporting $1.53 a share. Revenue also beat at $90.8 billion (Wall Street expectations had it at $90.3 billion.) iPhone revenue was at $45.96 billion, down from $51.33 billion in 2023. The stock went up by about 6% after the report, even though it was a modest beat of already lowered expectations. Apple also announced an increase to its dividend of $.25 a share and a buyback program of $110 billion. CEO Tim Cook announced plans for the iphone to add AI in the future as Apple catches up with the use of AI at competitors such as Samsung. This promise of a wonderful future, combined with a modest beat, was enough to boost the stock. This is just one more example of a pattern I’m seeing in the sector currently where technology companies make vague, date-less promises of bigger and better things to come, with very little tangible proof or actual products. Investors are being asked to pay as if these are growth stocks, when in fact these promises may never come to fruition. The market is trying to extend a rally but “Go away in May” may be the safer bet.
