Don’t Panic & Carry A Towel
The market gets to the bottom then goes back to the top of the slide, where it stops and it turns and it goes for a ride … ‘till it gets to the bottom and it does it again!
Yeah, yeah, yeah!
Do you, don’t you want me to invest? The market’s coming down fast, but it’s miles above you.
Tell me, tell me, tell me, come on, tell me the answer. Well, you may be an investor, but you ain’t no dancer.
Helter skelter, indeed, Great Ones. We’re finally seeing Wall Street’s true feelings on the COVID-19 Omicron variant.
Last Friday’s sell-off was a low-volume, knee-jerk reaction with very little substance. Monday was a bullish reaction to the Friday bearish reaction.
But today … today we’re getting to the heart of the matter: fear.
Make no mistake, Great Ones. Despite the fact that whatever doesn’t kill you mutates and tries again … the stock market isn’t actually afraid of Omicron. It’s afraid of the potential reaction to Omicron.
We’ve already seen travel bans focused on South African countries, where the Omicron variant was first detected. But Wall Street is worried things will get worse. I’m talking delayed Federal Reserve plans to taper stimulus, or pushing back interest rate hikes, or the granddaddy of all … more lockdowns.
But didn’t that South African doctor say symptoms were extremely mild? Aren’t we overreacting a bit here?
True. But we’re still early in the Omicron game, so there’s a lot more to learn in the coming weeks. Wall Street doesn’t like that kind of uncertainty.
Furthermore, Moderna (Nasdaq: MRNA) CEO Stéphane Bancel said he believes that current vaccines will see a “material drop” in effectiveness against Omicron. Bancel went on to note that it’d take months to develop and ship an Omicron-specific vaccine.
And if that wasn’t enough, Regeneron Pharmaceuticals (Nasdaq: REGN) also said that its COVID-19 antibody treatment might be less effective against Omicron.
So, while President Biden promised on Monday that there wouldn’t be any more lockdowns, I wouldn’t put it past him to implement them again if necessary.
And that, dear Great Ones, is Wall Street’s biggest fear.
The U.S. economic recovery is already being delayed and hampered by continued, lingering COVID-19 repercussions. Omicron has the potential to make those delays worse — even without lockdowns.
Shutting things down again resets the economic recovery back to zero and won’t be tolerated by investors … unless there’s another massive stimulus package to go along with it. (Which would just worsen the inflation situation … so, six in one, half a dozen in the other?)
I’ve got blisters on my fingers!
So, what’s a Great One to do in times like these?
Well … I tried to tell you last month what was coming and how to protect yourself. You know, with that shameless self-promotion I did? I know the promo price is gone, but you can still get the software package if you’re interested.
That being said, there are two absolutely crucial words to live by: Don’t panic.
You need to be a hoopy frood who really knows where his towel is right now. Stay on top of your investments, take profits on the excessively risky ones and don’t sell anything with solid long-term growth prospects.
You also want to look for safe havens where you can stash your cash. I know that gold traditionally fills this role for many investors, but … have you thought about Bitcoin and cryptocurrencies? You know, digital gold … Silicon Valley tea?
The fun thing about cryptocurrencies is that not only do they provide a safe haven for your cash, they could also grow your money during any potential Omicron fallout. More than gold would, anyway.
In Ian King’s special event, Crypto’s Third Wave, he’s sharing how this relatively small corner of the crypto market could dwarf Apple, Microsoft, Tesla and Google combined … in just 10 years.
We’re talking about a potential $9 trillion mega boom. And in Crypto’s Third Wave, Ian’s sharing the details on how to take advantage of this once-in-a-lifetime opportunity.
The Good: Love The Way You Li Auto
I gotta say, it was a good day for Chinese electric vehicle (EV) maker Li Auto (Nasdaq: LI) and all of Li’s investors.
The company reported knockout third-quarter earnings, with sales rising 209% year over year and adjusted earnings coming in at $0.03 per share on $1.21 billion in sales.
For context, Wall Street expected a loss of $0.03 per share from $1.13 billion in sales. (I’ve got one question for you: Can you deal with that?!)
Furthermore, Li’s deliveries keep increasing despite ongoing semiconductor shortages eating into the EV maker’s production. Li expects to deliver roughly 11,500 vehicles in November and December, then Tokyo Drift its way into the 14,000 vehicle-per-month range “sometime” in 2022.
Increased production capacity? Expanding sales? No wonder Wall Street swooned. Investors heard their favorite buzzwords and then helped themselves to a heaping handful of LI shares, pushing Li Auto’s stock up about 2% on the day. Don’t get too crazy now, Wall Street…
The Bad: Dollar Trees Is The Perfect Place For Shade
…and that’s just how Goldman feels (now, now).
In case you missed it, Dollar Tree (Nasdaq: DLTR) got dealt some shade this morning after Goldman Sachs downgraded the discount retailer to neutral from buy.
Why the sudden diss from Goldman?
Well, the way the investment firm tells it, Dollar Tree is too expensive at $134 per share because the company’s third-quarter price hike announcement has already been factored into its stock.
And by “price hike,” I mean those sad silk flowers and off-brand Solo cups Dollar Tree sells are gonna start running you $1.25 now instead of just a dollar. Oh, the horror!
In all seriousness, a quarter of a price increase on certain items won’t kill Dollar Tree or stop people from shopping at its stores. But it’s not going to win Dollar Tree any consumer shopping awards either.
I mean, it’s kinda sad when your company is called “Dollar Tree” and nothing in your store is actually a dollar anymore. Maybe a name change is finally in order? “Dollar-Plus Tree” doesn’t have the right ring to it. But then again, neither does “Buck And A Quarter Tree.”
Maybe the retailer can take a leaf out of Prince’s book and just call itself “The Store Formerly Known As Dollar Tree.” What do you think, Great Ones? Got any thoughts on a Dollar Tree rebranding? Share your ideas with us at: GreatStuffToday@BanyanHill.com.
The Ugly: Stranger Than Meta-Fiction
In a strange turn of events, the Competition and Markets Authority (CMA) — which basically acts as the U.K.’s competition watchdog — told Meta Platforms (Nasdaq: FB) that it needs to hand over its GIF-making platform Giphy posthaste.
“Meta” acquired Giphy back in 2020 for $315 million so that people on Instagram could post GIFs to their stories and news feeds more easily. I guess other people don’t keep a running folder of GIFs on their phone to use when the right circumstances come a-calling. Casuals.
Great Stuff + GIFs, anyone? Too much?
Anyway, Meta — or “The Company Formerly Known As Facebook” — pinky promised to grant third parties the same access to Giphy’s content that they enjoyed before the merger.
But the CMA did some post-acquisition digging into Facebook’s files and really didn’t like what it found. The pairing was apparently so egregious that the only solution was for Facebook — sorry, Meta — to completely dissolve the deal:
In the CMA’s mind, Meta’s ownership of Giphy would give it free rein to cut off other social media sites’ access to GIFs … and we certainly can’t have that.
Even more damning is the fact that Meta terminated Giphy’s advertising services at the time of the merger and replaced it with Meta’s own advertising.
While not exactly shocking, the move also doesn’t say: “We’re keeping brand recognition equal among all third parties.” You know … like Meta promised?
Vax makers dishing out doubt … GIF makers on the fritz … who isn’t in disaster mode today? (Besides the ever-optimistic Great Stuff, obviously…)
No stranger to sounding the Internet’s alarm, Elon Musk — I can hear you groaning already — thinks it’s time we talked about the Raptor in the room.
Hold up, first the Omicron, and now raptors are on the loose? Mind telling me … where?
While they might sound more terrifying than “murder hornets,” Raptors are the engines that power SpaceX’s Starship — the company’s massive, reusable vehicles that could one day be used for everything from space tourism and interplanetary flight to remote human colonization across the stars.
Well, if the Raptors don’t cause SpaceX to go bankrupt first. Much like their dino namesakes, Raptor engines are nearly extinct:
That was back on November 17 … right before Vice President of propulsion Will Heltsley left the company, to boot. And on Black Friday, Elon Musk further elaborated that rumors of the Raptor engine production demise are worse than we thought:
SpaceX faces a propulsion problem that’s bigger than just its propulsion production. If there are no Raptor engines, Elon can’t build the 1,000-odd Starship fleet he wants to start spawning interplanetary life.
And if there are no Starships … there’s no SpaceX:
Looks like Elon might have to boldly go where SpaceX hasn’t gone before. Puts on sunglasses … Yeeeeah!
If that mess of crosswinds sounds familiar, it should. What have we learned from elsewhere in the space market? What’s the one huge hurdle holding back profitable space travel? Chime in whenever you’d like, Virgin Galactic (Nasdaq: SPCE) investors…
Consistency. You need to send passengers up on the regular.
You know, actually launching the flights you already have booked, scheduled and paid for … so you can get more bookings and thus revenue in the door. And that’s just for the tourism angle, never mind Elon Musk’s dreams of Earth-to-Moon flights and multiplanetary human exploration.
It doesn’t take rocket science to figure out how SpaceX’s extravagant, interstellar plans will be much more expensive. And while both companies face a cash crunch on the way to profitability, SpaceX’s solvency situation seems much more dire.
The fact that ol’ Musky is cutting the Twitter-trolling and meme-making pitter-patter for a rare second of seriousness makes me believe the boy-who-cried-rockets might have a genuine crisis … this time.
I mean, Elon would never be over-sensational to get attention, right? Cough. Taking Tesla Private at $420 Funding secured. Cough.
Unless you’re Mr. & Mrs. Moneybags over there, snatching up private space stocks, I presume none of you Great Ones are invested in SpaceX. No Raptors for you!
But don’t worry: There’s still a spot for you in the stock market’s space race. According to Paul Mampilly:
It’s investing … in spaaaAAAaaace!
After you check that out, drop by the inbox-a-roo and tell me what’s on your mind this week. Would you ever strap yourself to the Starship and interstellar? What should Dollar Tree call itself now? And
Let me know at GreatStuffToday@BanyanHill.com. We’d love to hear from you! In the meantime, here’s where you can check out some more Greatness:
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Until next time, stay Great!
Editor, Great Stuff