Keir’s Top 5 Stock Picks – July 2021

Wow, is it really July already? June seemed to fly by for some reason this year. Markets remained relatively unchanged and I continue to expect them to be somewhat choppy if June’s Fed announcement was any indicator. As a side note, I hope any readers of this blog took advantage and bought that dip. If not, I expect another dip in September, so you have some time. As far as equities, there’s not much I like here. I do think oil (currently at $75 goes to $100), but it’s about as speculative as I get here. I don’t see a lot of downside risk right now with the VIX currently being at 15, but I also don’t see a lot of market upside potential until this Delta variant of COVID disappears, unemployment drops below 5% and the Fed gives us more insight of when the first post-pandemic rate hike will likely happen (really a non-factor to me, but I’ll make money over the overreaction to the announcement again, should it occur).

While I may have been premature on the SPAC endgame, I’m pretty sure I know when this craze ends.

See all these SPACs are assumed to go public at $10 / share. As long as these SPAC’s can maintain the $10 initial offering price, the SPAC investors make money. A year ago or so when these SPACS got the IPO bump, some would shoot to $60 – $80+ / share. After adjusting for the $10 offering price, the SPAC investor achieves a 500% – 700%+ return on investment. Even if they fall back to $15 – $20 / share, the original SPAC investors still obtain a 50 -100% ROI. That’s all these are (a perceived guaranteed ROI play) and that’s also why the Bill Ackman’s of the world are now combining 3 SPACs into 1…

https://www.bloomberg.com/opinion/articles/2021-06-04/bill-ackman-s-spac-will-be-three-spacs

They’re hoping each will be perceived as a $15 – $20 / share company, allowing Mr. Ackman to achieve a 150% – 300% return again. At the end of the day though these are all just penny stock companies and when the values of these drop below $10 or an unmarried SPAC drops from $10 to $1, and stays under $10 after announcement of a deal, the SPAC investors lose money and the SPAC craze ends that day.

Anyways, if you’re still with me. Here’s an attempt at a Top-5 for June 2021, but like I said before, I think you’re still better off just conserving cash right now and waiting for one last dip before a hopeful year-end melt-up.

  1. Cash (you know the drill by now)
  2. GUSH (see oil going to $100 prediction above)
  3. CCL – Part of the reopen trade and I do like it at this price point, but think it will still pullback before summer-end
  4. HLI – Seems to be the hot investment bank right now…BNKU if you want to diversify with leveraged risk.
  5. DFEN – What the heck…lots of geopolitical stuff going on in the world right now. The defensive sector will have its day if a cold war erupts, which I really hope we avoid coming out of a now exhausting pandemic.

Have a Happy and safe 4th of July everyone.

Hopefully this pandemic officially ends soon.

Keir’s Top 5 Stock Picks – June 2021

So May came and went and after an early small selloff, the markets have recovered and are now close again to their all time highs. Something just seems odd about this slow drift up. It feels like a slight celebration of the final stages of the pandemic. But there are lots of variables in play right now (Inflation, Employment, Supply Chain Disruptions, potential add-on stimuli packages, and the pandemic moving into Japan and other countries). It’s enough for me to continue being cautious right now. One thing I do know, if you do want to borrow money, now’s the time to do it. It will never be cheaper and if you’re home has equity (very likely considering how home prices have increased in the last year or so), now’s a good time to consider a refinance. Probably the last time. Anyways, for this month, I again recommend preserving capital and waiting to see if there’s a better buying opportunity in the next few months. But if the markets keep lifting every day (remember what goes up must eventually come down), it may be a good time to start dollar cost averaging and buying dips. Until I have a better sense of where this market is heading right now I’d recommend just dabbling in the following to fill out your portfolio for right now:

  1. TPOR
  2. DUSL
  3. UBOT
  4. HLI
  5. Any inflation/market hedges – Gold, Silver, Platinum, Palladium, Oil

Stay away – Crypto, COIN, etc.

Hope everyone had a safe Memorial Day weekend and we’re only a month away from the 4th of July. Happy summer everyone.

Keir’s Top 5 Stock Picks – May 2021

As expected, the choppiness in the markets we saw in April will most likely continue into May as well with last Thursday’s surge in the market somewhat reminiscent of a mini blow-off top…I just don’t see any big catalyst once all earnings have been announced for Q1. I think there will be a slight pullback as the markets look exhausted and as the Debt Ceiling talks intensify later this July/August when the US Debt Total Approaches and ultimately passes $30T. While I expect all Republicans to vote against increasing it, and all Dems to vote for it with Kamala breaking the tie again, all it would take is one Dem to change sides and the pullback becomes more severe. But ultimately cool heads will prevail and it should be increased particularly if the pandemic is still around. Perhaps the markets end up trading sideways until COVID is officially over in anticipation of a post-COVID celebratory year-end melt-up. Either way if you’re a speculative day trader, I’d advise now to reduce positions and take gains. If you’re a long-term trader (which Biden is trying to eliminate by raising the LT Capital Gains tax rate), I’d advise just saving cash right now. Market is still sensitive to any external shock and there’s just too much downside risk, even for me. But as I search for Value I’ll give a top 5 of some sorts, just not easy pickings right now…

  1. Cash (I’d be saving here in case this pullback does occur and then later buy some dips as we exit the pandemic – $50K+ if you can).
  2. Commercial Real Estate (over Residential right now). Values are rising and interest rates will be rising soon. But in inflationary environments, should it occur, All asset values increase. Lock in a low rate and pay down the principal. It’s like a 401K plan you get to tap into before and if you make it to 65.
  3. SOXL – Don’t let the semiconductor shortage scare you. That just means that Demand is outstripping Supply. Great problem to have for the industry as the economy continues to recover.
  4. UGL – Those who have read my posts in the past know I’m collecting gold mines constantly. Have them all over the world. Have no idea why as I really hate Gold as an investment instrument since it has no real alternative use other than being ornamental. But with China and some countries opening their gold markets back up, I think we’re seeing a bottom in gold right now. Remember should inflation kick in, All asset values increase.
  5. Marijuana stocks – Pick them based on perceived market share would be my advice. That’s about the only legislative item I think may get passed soon and if it does, expect these to start taking off.

Medium Short-Term Risk/High Reward – BNKU, WANT (You could pick them up here, I just like BNKU closer to $40-$45 and WANT $55-$60.)

High Risk/Low Reward – BTC, COIN

Good luck and let’s get India out of COVID…we’re almost there, I hope.

Keir’s Top 5 Stock Picks – April 2021

Alright, after a somewhat choppy March 2021 which I expected, the market ended the quarter on a high and the bubble begins. With Sleepy Joe Biden doing everything he can to force inflation and deflate the dollar…stimulus after stimulus after forgiving student debt after $2T Infrastructure plan…all just to make our products more appealing to emerging countries with larger population bases. Get ready America, inflation is real and everywhere I look…at the Gas Station, Toilet Paper, Hair Cuts, even the burrito I’m eating right now. Now is not the time to be long on the $USD. It’s all about future growth now and these large Corporations don’t see it in the US. Pump up the economy, reduce unemployment…only to set America up for the biggest crash ever. Enjoy it while it lasts. It won’t happen immediately, we still have a pandemic to get past which is still showing signs of one last final wave.

I wish I had a crystal ball, I really do. Because mine currently says it’ll be a choppy summer as Corporate reporting begins this month for Q1 and if I’m right, I’d expect a lot of Corporate earnings to indicate year over year revenue growth with a common caveat…increases in selling prices brought on by increases in core prices…INFLATION. Expect it to be a dominant theme over the next few months with the markets pulling and pushing as yields creep higher and Long-Term US bonds falling in value. That, combined with the big bankers and the rest of the economy taking a break and traveling for maybe the first time in over a year…There’s not a lot to get excited about right now as the markets look full to me. Low volume usually leads to short-selling in the near-term.

At least the SPAC craze appears to be taking a breather as well, but if inflation is real, I’d expect some desperation in some of these recently launched SPACs as we approach the end of next year. Increases in bond yields will put pressure on those remaining SPACs to find a company to take public, with maybe a SPAC rotation following the current rotation in the general public markets away from high growth/technology companies and into cyclicals or Company’s with proven revenue growth and profitability. Instead of sitting on cash which is earning essentially no return (ala Bill Ackman right now), if the markets do end up inflating later this year (hint, a X-mas rally seems all but certain coming off this pandemic), Mr. Ackman and SPAC Co will feel the pressure to buy into these markets again or return money to investors at no return over 2 years. Plus, if I’m not mistaken these empty SPACS flying around right now invest in low yielding government debt until they find a target, which may result in actual negative returns over 2 years when finally liquidated…not a good thing for those who invested in SPACs being launched today. So while this SPAC market takes a much needed breather, I’d expect a final round of SPAC activity later next year…call it panic buying. But who knows for certain, right? We still have a pandemic to get over.

Alas, here’s my speculative top-5 for April, knowing there appears to be more downside risk to the market in the near-term followed by a gigantic upswing once people wake up and realize asset prices are rising everywhere…

  1. Cash (Seems silly, right? I’m betting against the dollar but also remaining in cash. I’d just be saving here to hopefully buy in at a lower price later this summer. Plus saving cash provides you with more buying power should you find something you really like in or outside the public markets and you never, ever bet the farm on anything…$30-$50K again).
  2. Real Estate – Based on the increases in yields and real estate prices this year, 2021 may be the last time to buy at somewhat of a discount long-term.
  3. For those with long term time horizons…it’s risky but you might as well pick up the big 3 technology leveraged funds with technology being beaten down recently and after their recent split making them more affordable…TECL, SOXL and FNGU. All should benefit from a hopeful Christmas rally this year if we can just get past this stupid pandemic.
  4. TMV and TYO – See above discussion on yields regarding long-term Treasury Bonds, just don’t expect much in the short-term until inflation really sets in.
  5. Still like airline equities here (DAL and UAL are my personal favorites). All are potential M&A targets at the very least once the pandemic ends. As an aside, once/if the pandemic ever ends, expect the M&A markets to take off as Company’s still reeling from the pandemic synergize and combine together to create a better more “ESG” friendly Company.

High Risk/Low Reward – I really hate typing this but I can’t ignore the hype. Crypto – I won’t touch it, my brokerage firm won’t touch it and I think this could pose some systemic risk to the entire economy if/when this bubble ever bursts. But if it has replaced Gold temporarily as the predominant inflation hedge, I could see BTC going to $75K, easily. Just too risky, even for me.

Good luck and stay safe, hopefully a return to normalcy happens sometime in 2021…

Keir’s Top 5 Picks – March 2021

Alright, looking at the markets, it’s tough to get too excited about much right now. The Add-on stimulus should pass this month giving the markets a bump. Covid should continue to relent, giving the markets stability and if this were any other year, I’d say sell in May and go away. But since a lot of people may not have the ability to sell and obtain long-term gain status, I’ll just throw some speculative stuff out there. Remember to always keep an emergency fund, but I think inflation has to set in at some point. Gold would be the go-go play in the past but unfortunately, until BTC goes away, gold’s gains look capped…

  1. TYM – If you can’t benefit off a foreseeable increase in inflation off a direct investments in gold, it’s best to attack the dollar directly. How? Through government debt. The theory is that if yields keep rising the actual value of our debt declines. This ETF is set to track the inverse of 20 year bond funds 3x.
  2. TYO – The value play to TYM
  3. VSAT
  4. DAL
  5. UAL

Any other outdoor/vacation plays should be worth watching as well.