Investing is a game of uncertainty. Whether you own your own business or buy public stocks, you can never predict accurately.
So you do two things — you study, learn and study some more. You don’t buy until you’re very confident. Totally certain.
Research: What’s the basic business? Does it have a BIG competitive advantage?
My biggest recent “success” is PayPal. I use it nearly every day. It’s basically a smart credit card, paying my purchases of things I don’t need. Google Chrome does basically the same thing. I read everything on PayPal’s web site. I couldn’t find one single reason that would entice me to own the stock.
At one stage I was in love with PayPal — like everyone else. Cramer prattled on incessantly about the company. But when I realized it offered nothing innovative, competitive, or exciting, , I sold everything. I was “lucky” because since then the stock has cratered, making me look a genius among some of my readers.
It’s actually easier to say NO than to say Yes.
For example, I said NO to Netflix because of the explosion of competitive streaming video/movie services.
I said NO to Palantir because — no matter how hard I tried, I couldn’t figure out what it actually does.
I said NO to the big banks because — even though I have cash with them they haven’t managed to sell me one thing. I have a list of list of things I’d like to buy from them. But they don’t include Auction Rate Preferreds. And bank executives don’t listen. Anyone want a list? Send me an email.
You get the idea of how to say NO. When in doubt (any doubt), stay out. Todd taught me that. He’s a smart man.
Sometimes I buy things and the world changes.
I once thought Facebook was the best way to advertise your junk for sale. It probably still is. Two things happened to Facebook that caused me to sell it: The regulators got antsy. The company started investing billions in the metaverse. And I thought a waste of money. I tried to figure the metaverse out. I wrote about it here.
The classic case of the world changing is the Pandemic. The world shifted to Zoom, Moderna and Peloton. They all exploded, went parabolic, then with the “end” of the Pandemic, they all crashed.
I dumped them all — but too late.
I have to learn to sell when a stock goes parabolic. Look at Peloton. Blind Freddie could have figured out when to sell it – in January of last year. But I’m dumber than Blind Freddie.
And then when it drops, don’t buy it back because of the proliferation of cheap exercise bikes. Things changed. Look at Amazon here.
I need to write more about parabolic stock moves. And how to recognize them. And how not to think they’ll go one forever.
They won’t.
My simple take on Russia
Putin is a dictator, who wants in his heart of hearts to be an old fashioned Tsar. He aches for the return (and glory) of the old Russian Empire. Putin once called the collapse of the Soviet empire in 1991 “the greatest geopolitical catastrophe of the century.”
He wants to stay in power. Selling the return of the Empire works. His popularity rises when he sabre rattles, e.g. taking over Crimea.
As Emperor, his “perfect” system is an all-seeing, all knowing boss (him) and a bunch of smart (well-paid) buddies (called oligarchs). Under this “system” he can’t deliver better living for his people because that means embracing freedom and the rule of law (bad). And he can’t have the Ukrainians showing the Russian people they’re better off with democracy and the rule of law. God forbid.
Putin and his oligarch buddies have a big piece of all the major Russian enterprises (the Russian Fortune 500) and the gushing Russian oil and gas pot. Russia is the third largest oil producer (after the U.S. and Saudi).
The time is now ripe for something: Oil is up. Western Europe desperately needs Russian oil and gas. The west is weak. Germany still hasn’t lifted its military spending to 2% of its GDP. And Putin is no Trump.
If he grabs the Russian-speaking western part of Ukraine, no one will do anything — just as they did nothing when he took Crimea. He needs a land route from Crimea to Russia.
Sanctions don’t work against the world’s richest man (Putin), who has had ample time to figure creative ways around them. He took Crimea eight years ago.
Marching in (if it happens) most likely won’t happen until after the February 20 end to the Beijing Olympics. Putin is attending and squaring his plans with his buddy, another dictator, President Xi.
My friends in the military says this Russian lineup is for intimidation. One large bomb (the MOAB) could destroy all of them.
I’m guessing whichever way this plays out, we’ll know by the end of the month. Removing the uncertainty of Russia’s game then should help stock markets.
You should own oil stocks, like XOM, DVN, CVX, FANG, and perhaps some defense stocks like Lockheed Martin, Northrop and Raytheon.
According to Google, The GBU-43/B Massive Ordnance Air Blast (colloquially known as the “Mother of All Bombs”) is a large-yield bomb, developed for the United States military by Albert L. Weimorts, Jr. of the Air Force Research Laboratory. It’s basically a nuke, without the radiation fall-out. It could easily knock all those neatly-arranged war machines in this picture I picked up courtesy Google.
Thanks for Ed S. for his help on this. He’s a much better scholar than I am.
Well almost. She saw the dryness of my skin and my skin issues; She counseled:
+ Extensive use of moisturizer, e.g.
Click here.
+ SPF30 sunscreen on my hands, my face and my ears — no matter that I’m outside or inside. Do it.
Show this to the kids and the grandkids
This will get their feet moving. See if they can do some of the moves.
Let’s go to the dentist. You’ll die laughing.
Favorite old person’s cartoon
Latest news
My erstwhile Generac service man was lazy. Look what my new one just pulled out of my backyard Generac. I bet they hadn’t been changed in 15 years.
We’ll talk about maintaining your Generac emergency generator tomorrow.
Amazon reports this evening. The stock is down heavily today. Really heavily. Analysts are wary. We’ll hear tonight. I’m not selling. I bet I’m wrong. I hope they announce a 20 for one stock split which Google just did which caused me to buy some more Google today.
Have a great snowstorm. Don’t go out. See you tomorrow. Harry Newton
