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Trade Alert: A little nibbling into the fear, but just a little

June 3, 2019 by Cody Willard Leave a Comment

Markets swings cause emotional swings which causes market swings which causes…

There’s a lot of emotion out there today led by fear. I’m not doing much nibbling, but I did nibble on a tiny bit of FB, AMZN and GOOG as the markets freak out about new anti-trust concerns from, of all things, the heretofore always corporate-friendly Republican Democrat Regime RDR. I tend to think the RDR tries to pretend that it’s enforcing anti-trust laws (which it clearly hasn’t during my lifetime as so many industries have merged their way into oligopolic status) by using headlines like today’s:

Alphabet shares pulled back 6.6% after reports said the Justice Department is preparing to launch an antitrust probe on Google. Meanwhile, Facebook dropped 8% after The Wall Street Journal reported the Federal Trade Commission would be able to look into Facebook’s practices and how they impact digital competition. Amazon shares fell 4.4% after The Washington Post said the top U.S. antitrust enforcement agencies struck a deal on tech oversight.

Now, I’ve spent most of the last ten years buying most sell-offs in our favorite names, including when they’ve been hit on supposed crackdown of anti-trust laws. But what keeps me from getting more aggressive this time is mostly two things. One being that The Great Trade War tensions are causing executives the world over to rethink their investment plans as they grapple with new supply chains. The second one being that the markets, while down quite sharply in the last month, are not exactly in crashed-panicky territory (yet?).

I’m trying to stay defensive but even having increased our cash and hedges in the last few weeks, the markets are still causing pain. I’m leaving myself room to get more aggressive on the long side if markets do sell-off another 5% or so, but even then, I’m much less convinced that such a set-up at this time would make it wise to get very aggressive on the long side. The markets just might be in no-man’s land here for the summer, as neither the upside nor the downside end up with much traction. I’m quite upset with myself for not having gotten much more defensive when stock were at their all-time highs a few weeks ago and we have lost money because of that. But that doesn’t mean I should try to catch the exact bottom (if there is one to be had soon) to make up for that.

Cash is the best defense. Nibbling on some of our favorite but currently bashed names is probably the best offense.

Let’s rock n roll.

PS. We’ll do this week’s Live Q&A Chat tomorrow morning at 9am ET for week’s Trading With Cody Live Q&A Chat in the chat room or just email us your question to support@tradingwithcody.com.

Related posts:

Scary night with Amaris (and Trade Alert: Why tech looks ready for a pullback)
Trade Alert and Latest Positions - Selling calls down, getting less aggressive
Disrupting your own future (and Trade Alert: New Year Sell-off Ahead?)
Trade Alert: Taking profits on puts, and a small bet on rates
Trade Alert: New pick for the VR and SmartCar Revolutions
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Filed Under: Trade Alert

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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