Some wild early morning action in the stock markets, tech specifically. Looks like most any stock related to high tech and/or high beta took a major hit early into the trading day with some names like $NVDA down 7% and $QCOM down 4% and $Z down 6% at their lows. The stocks have since bounced back a bit, but are still down quite a bit on the day, even as the DJIA and S&P 500 are up on the day. You know for the last couple weeks, I’ve been reminding you all to take some profits and raise cash and repeatedly saying “remember what it was like when the futures were down 800 points with the DJIA at 17,000 on the night Trump was elected.”
I’ve been patiently waiting for some action like this to start buying/nibbling some stocks and putting some cash back to work. I’m not in any rush just yet. One thing that keeps me from rushing in with new buys and tranche adds just yet is the fact that the DJIA and S&P 500 are both steady/up on the day, rather than also being sold off in a panic. Their action underscores the lack of fear and currents of greed that have driven the stock market for the last few weeks since election night lows when there was palpable fear out there.
So I’m not buying or even adding to anything just yet. Being disciplined and following our playbook, that’s the key to long-term success. I’ll send out a Trade Alert if and when I do make some buys. Some names and price points I’d be looking to nibble more at, if we see these prices in a broader panicky sell-off:
Facebook below $110.
Google below $700.
Amazon below $700.
Ambarella below $55.
Sony near $25.
Zillow below $30.
Nvidia below $80.
Qualcomm below $60.
Impinj (PI) below $25.
The reason we wait for a panicky broader sell-off to make those trades is because, as you’ve seen me do repeatedly over the years, we can use the broader panic which often drives down our own individual Revolution Investing stocks 2-3x more than the indices to sneak in on our individual names that then bounce back 2-3x more than the broader markets. You’ve seen me use the opportunity created by broader panic to sneak in and buy call options in addition to common stock tranches. Either way, we are trying to use market-based, broad panicky action to our individual benefit. Big hedge funds and mutual funds can’t do that like you and I can.
It’s in the playbook, which right now is telling us to, stay put, keep it steady with our existing longs offset with some puts and some shorts and lots of cash ready to put to work. Be alert about not trading…the Un-Trade Alert, see?
So yeah, for now, let’s keep it steady Betty.