Good morning and welcome back to the circus. Coronavirus has gotten worse in the last two days, but the markets are looking past it for now, as I’d expected them to. However, after doing the Latest Positions round up and looking at our returns already this year, I’m going to go ahead and trim a little more across the board today, maybe 5% of most of my positions — just to get a little more defensive and raise a little more cash while our positions are in rally mode. I’ll remain net long overall and I’m far from bearish, but I’d rather trim into this current set up than load up into it.
On that note, I am going to go ahead and sell our BA today. As I’d noted in the most recent Latest Positions write up: “How Boeing has handled the entire 747 Max tragedy has been disgusting. I’m sick of holding this stock and truly shocked at the emails that we’ve seen released that warned about the Max before it hit market. On the other hand, it sure looks like a lot of this crisis is already priced into the stock and if IF Boeing can start delivering Max jets again in the next year, there are many years worth of deliveries ahead. All that said, it wouldn’t shock me to see BA get hit another 10-20% before bottoming, even if everything works out.” I’ll probably just hold onto the few BA puts I bought as a further hedge for now.
Also, I forgot to mention Spotify SPOT in my Latest Positions round up. I’d rate SPOT an 8/10 right now and I’d buy more SPOT near $140. The company continues to take market share from everybody but Amazon and establish itself as the de facto standard music and podcast subscription business and could hit half a billion subscribers this year.
Lastly, be sure to join me this morning (Wednesday January 29) at 10am ET for this week’s Live Q&A Chat. Come directly to the TWC Chat Room or just email us your question to firstname.lastname@example.org.