Many investors have questions about what’s happening right now and what it all means for your money.
That’s why I’ll be sitting down for what I anticipate will be a wide-ranging discussion with Ed D’Agostino of Mauldin Economics this Friday.
We’re planning to talk about what’s working and what’s not, which companies will create the next generation of millionaires and those that may be hidden portfolio killers, including quite a few household names investors take for granted… and more!
I’d like to know what’s on your mind.
Meanwhile, the major averages are down ahead as investors brace for yet another round of Fed follies.
Here’s my playbook.
Ron Baron says Tesla $1,500 by 2030
I’ve made my fair share of wild price projections over the years—and fortunately, many of ‘em have proven to be spot on, including Tesla. Not for nothing, but shares have returned a jaw-dropping 7,273.5% over the past 10 years, according to Finbox.
Now I’ve got company.
Billionaire investor Ron Baron expects Tesla shares to hit $1,500 by 2030. (Read)
If you’re doing the math—and I hope you are—that’s another 670.2% from last night’s close of $194.76. It’s also enough to turn every $10,000 invested today into a jaw-dropping $77,020 just 7 short years from now.
I hope I have enough shares!
BTW: I sure hope you bought when I encouraged investors to do so earlier this year as Tesla set 52-week lows. Shares are up 91.3% since January 3, which means anybody who did buy is coming up on a double in just 24 trading days!
India may finally be investable
Short-seller Hindenburg Research has alleged that one of India’s largest conglomerates—Adami Group—has committed a massive, decades-long fraud based on stock manipulation and accounting fraud. Shares have lost a jaw-dropping $113B in market capitalization since.
Many investors see this as a sign to stay away. ETFs and mutual funds with exposure to Adami holdings have gotten whomped so it’s easy to understand why they’d feel that way.
Dr. Mark Mobius has a different take. He told CNBC that the fallout will likely be isolated and should be viewed as a sign of the size and opportunity associated with Indian markets. (Watch)
I agree, for three reasons:
Adami accounts for about 6% of Indian markets, which means that the damage may be more contained despite the fact that it’s significant—especially if big banks and other lenders can plausibly explain their lending policies as part of regulatory scrutiny.
Dr. Mobius put the “global” in global investing and has a long, proven track record of finding opportunity where others think it doesn’t exist. He's been closely involved with India for decades.
Dr. Mark Mobius has played an extraordinary role in my own career, particularly when it comes to learning how to spot investment opportunities that are often beyond the headlines. So I always pay very close attention to his take on things.
MyPOV: India is at a crossroads, which means this crisis may finally bring corruption under control. If so, the Adami situation could usher in a new era of stability and profit potential.
Google: Hey, we have a chat thingy, too!
Google has announced an AI-driven ChatGPT rival called Bard. Alphabet, Google’s parent company, plans to launch it within the next few weeks. (Read)
MyPOV: It’s a “me too” move that is being rushed to market because Microsoft caught Team Pichai completely flatfooted and by surprise. I think Microsoft is the stronger player, which is why I’ll own it but am inclined to give Google a pass for now.
The situation could make a nice pairs trade. Long MSFT/short GOOG.
Your sandwich could kill you, buy Pepsi instead
Fresh Ideation Food Group is recalling more than 400 sandwich, salad, yogurt, and wrap products via retail stores and vending machines after samples tested positive for listeria. Fox Business reports that affected brands include Quick & Fresh, Bistro to Go, Fresh Creative Cuisine White, Westin Label, and Orchard Bistro. (Read)
Yet another reason to stick with the “best,” including Pepsi, which reports on February 9. I believe the numbers could be jaw-droppingly good, with revenues up 1.5–2%, but EPS up perhaps as much as 6–8% if management are controlling costs as well as I think they are.
Share buybacks could hit $1 trillion this year
Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, thinks 2023 could be the first fiscal year with at least $1 trillion in completed S&P 500 company buybacks. (Read)
Share buybacks are on already track to double 2022’s pace but the number of companies doing so has dropped by 37.6% from 125 to just 78. It’s likely to be a situation of less really is more.
Most investors and political types totally misunderstand the opportunity because they believe buybacks are a tactic CEOs use to manipulate share prices and starve companies of valuable investment capital.
In fact, share buybacks are great for savvy investors, especially when the companies doing ‘em pay dividends, too.
Buybacks boost EPS, which lowers the P/E ratio and, in turn, often attracts new money to the party.
Buybacks also lower the overall share supply and boost demand, which can be a powerful sign that management believes there are better days ahead, especially when share prices are low and putting in a floor (as is the case now).
And finally, the buyback yield can often be higher than dividends, particularly if you consider that they’re tax-friendly and often regarded as more flexible.
My newest recommendation, BTW, has just announced a multi-billion-dollar repurchase plan that should play out... err, pay out, nicely for everyone on board! Shares are starting to move, and that’s always great to see because it means profits may not be far behind.
If you’ve got this covered, cool. If not and you’d like some help, consider a subscription to my paid research journal, One Bar Ahead®. Upgrade to paid
Contrary to what many believe, the toughest opponent in today's financial markets isn't the markets or even other traders/investors.
It's the person looking back at you in the mirror every morning.
You got this—I promise!
As always, let’s get out there and MAKE it a great day!