| It’s an ugly market today with the DJIA -400 and high beta stocks like $AMBA Ambarella down 7%. Oil and energy stocks are (of course?) leading the declines as oil itself is down 7% today, taking, for example, coal stocks like Arch Coal $ACI down 25%.
For the last year, as oil/energy/commodities have collapsed, I’ve been saying that one of these days, there’s going to be a slew of bankruptcies in the energy sector and that is when we’ll want to finally start looking at some of the survivors who would then be able to scoop up those bankrupt assets at pennies on the dollar. We’re not there yet, but Arch Coal and Freeport McMoRan and Chesapeake and so many other formerly highflying energy stocks are getting closer to bankruptcy as they have billions in debt and little cash to support business while the products they sell are at less than half the levels they were just a year ago.
Now’s not the time to be a hero in energy. Remember we successfully nailed a similar cycle in the alternative energy/solar sector as we avoided it and/or shorted names like AONE A123 Batteries back from 2010-2012, waiting until AONE and others went outright bankrupt before we started buying First Solar FSLR at a fraction of its all-time highs and riding that stock higher over the last few years since then. We don’t have to nail the exact bottom in energy and oil and so many pundits, traders and investors have destroyed so much of their capital trying to do so already.
And anyway, remember that as tech and Revolution Investors, we LOVE seeing energy prices crash. All us consumers and businesses that use energy make more money when energy doesn’t cost as much (for example, see Drivers to pay lowest Labor Day weekend gas prices in 11 years: AAA). Oil at $10 per barrel would “fuel” huge economic growth and efficiencies.
Remember last week when we snuck in and bought $AAPL near $95 per share and others when the DJIA was -1000 in a single hour’s trading? You do realize that the $DJIA is still up 800 points from those lows even with today’s -400 action.
I’m not going to sneak in yet today and add to anything. Most traders and momentum lovers out there were loading up on stocks when they were at all-time highs a couple months ago and much of that money is still stuck in these names, meaning the weakhanded traders are still puking them. Let this market ebb a little more and if we get a -600 or more day in the $DJIA in the next few days, I’ll probably look to scale into some more names then.
I’m just not in a rush to add more exposure, as we already did those nibbles, after having reduced our long exposure when the markets were at all-time highs over the months earlier this year.
A few other notes for you:
Remember $BTC Bitcoin? “Barclays has a team working on about 20 Bitcoin-related experiments.” http://t.co/1RnQCyJubQ
And on that note, how remarkable is it (or not?!) that $BTC and $OIL have almost identical one-year charts of bearish collapse? Fascinating.
The last of my BEARISH anti-pot-penny-stock sentiment calls is about to expire in four days — with the stock down 90% plus. Every single pot penny stock I have ever noted on these pages is down more than 90%, just like I told you they would be. Shame on the SEC for letting these scams ruin retail investors’ lives. Read this for more on the pot penny stock scams and/or look at my past Scuttles and articles on these tickers:
$HEMP $CBIS $MJNA $PHOT $BRDT $MCIG $ERBB
“New on the shelves of your local Apple Store: drones”
That whole Drone Revolution I got us in front of three years ago — well, it’s here now. At least one of our drone stocks, $AMBA (whose chips run the cameras on the DJI drones that Apple’s now selling), is up 300% or more since I wrote the Drone Revolution book. Rock on. $AAPL PS. $AMBA earnings after the close today. Not something I’d try to game. I took profits on some of my $AMBA near $120 and am holding what I own of it now steady, though I’m admittedly on edge about the earnings report tonight in a market that’s trashing high-beta.
Finally, remember that you don’t have to be All-In or All-Out. It’s impossible to game tops and bottoms in the markets, so if you want to outperform and protect your money over the long run, you want to use the ebbs in the market to add to stocks and the flows in the market to trim stocks.
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