Friday File: Pot Real Estate, Clouds and a Cautionary Tale
by Travis Johnson, Stock Gumshoe | June 5, 2020 5:41 pm
The risk of "Catch Up" Speculating, plus thoughts on IIPR, DOCU, WORK, PAR and a new buy
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Source URL: https://www.stockgumshoe.com/2020/06/friday-file-pot-real-estate-clouds-and-a-cautionary-tale/
Your notes about newsletters, and the seven paragraphs beginning “[t]he market feels downright terrifying to me right now,” were precisely what I needed to read today. Happy with my allocations in February (including 30% in high-ish yield), I panicked in March. Sold a slew of positions that would have recovered nicely by now. Regret, FOMO, self-castigation? All of the above. But not even a year into retirement, I couldn’t afford to lose any more either. To come up with a sane lower-risk reallocation plan, and especially to answer the devilish when-to-reenter? questions: not easy in crazy times, esp. when my limitations as an investor (including: panic seller) have also been put in sharp relief. Loved the rest of the article too! Thanks and Happy Friday, Travis.
A very timely and very well written observation on Risk and Retirement. I really appreciate this from Travis!
Beautiful read. I love learning about how business models like PAR work. Thanks for making it so easy to absorb, Travis.
YES!
Well said.
He makes it easy to absorb.
Excellent analysis, as always. Thanks Travis.
Thanks as always, Travis. Do you have any thoughts on Alexander Green’s secret $3 stock that’s going to make everyone rich?
It used to be HON HAI PRECSN IND ORDF (HNHAF) but after reading his new pitch it states that it is America’s No. 1 tech company and it trades under a secret name.
Travis will have to straighten this one out!
Same thing
The last page (page 8) of your Real Money Portfolio pdf is very weird.
“Percent of this Portfolio” is shown as a dollar amount.
“Total Return” is shown as a date.
Sorry about that, the constant header is really only relevant for the first few pages of actual portfolio holdings. Hoping to clear up and fix the formatting issues we’ve been having with the portfolio soon.
Thanks for the reminder of a well-diversified allocation strategy and that having cash in a downturn will help us be more rational in our decision making process.
Are airline stocks like Jetblue a good value to get into again since they got beaten down and valuations in some cases are 1/2 of what they used to be?
I haven’t bought any of them, personally. Really depends primarily on whether planes are full again in a few months or not. Of the recovery in travel is slow, the debt service becomes a big issue… though they do also benefit from low fuel prices at the moment.
Any thoughts on upcoming “crash” in the market. Things short term don’t look good, but very bullish long-term. Plus I have never been able to time the market.
I disagree that things look particularly bullish right now for the long term. Every valuation metric I can come up with indicates that the next decade will probably provide below-average returns for the broad market.
But will stocks be “better than bonds or cash” for the next decade? Yes, probably. And hopefully the stocks we choose will be better still.
I don’t know if there will be a second crash in the short term, this year or next — that would follow the pattern of 2008-9, but things are very different now with the incredible government rescue funding and Federal Reserve largesse. And clearly investors are telling us now that they are not worried about COVID or about the economic impact… it seems to me that the market is pricing in a pretty full recovery of the economy by next year, which would be wonderful but is far from certain.
Guessing at the timing of a crash isn’t likely to be very useful for us… but being ready for a crash or longer bear market is important.
Crazy scenario, Trump is taking on as much debt as possible thru the central bank. His plan is to crash the current system, remove the central bank from power, default on all US debt owed the central banks, and bring back the gold standard. Getting Judy Shelton confirmed to the Fed is one piece of the puzzle that might make this a possibility. She is a strong proponent of the gold standard. Either way, something is happening behind the scenes.
That does sound crazy.
I always lean toward Hanlon’s Razor.
I lean toward Hanlon’s Razor with just about everything that man says or does!
Dear Kingdomwar:
I do not share your theory for the reason that Trump has completely no understanding about the monetary system. If anything is going on behind the scenes it does not involve Trump. He has no strategy or plan except for the next political rally and the after meal.
Modern Monetary Theory (MMT): Whenever someone wants to frame their argument as a paradigm shift…They bring up the archetypal paradigm-shifter… Copernicus! Consider what Stephanie Kelton wrote in her brand new book on Modern Monetary Theory (MMT):“Copernicus and the scientists who followed him changed our understanding of the cosmos, showing that the earth revolves around the sun and not the other way around.” “A similar breakthrough,” Kelton goes on, “is needed for how we understand the deficit and its relationship to the economy.” Her book is titled, The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. Stephanie Kelton is, in her own words, a “leading proponent” of Modern Monetary Theory.If comparing oneself to Copernicus isn’t cavalier enough… Kelton also believes MMT is the key to bring about the “people’s economy.” Today, we’re going to untangle this ball of absurdity.
Chris Campbell
Managing editor, Laissez Faire Today….. https://lfb.org/
Thank you so much for the ETF .
Your the man Trav…appreciate your work.
Many thanks for this week’s file, Travis! Particularly for your tale of reason, prudence, and the reminder about tech stocks’ skyrocketing valuations. This Friday file couldn’t have come at a better time for me: I got onboard terribly late, invested mostly in tech with limited success but tried to turbo-boost my returns with options, which led to some irrational risk-taking and proved very unsuccessful. I’ll take my overall losses and will use more caution as we continue to skate on the thinnest ice.
Also, thanks for the new RMP format: it’s a lot easier to consult as a full page PDF.
LOL. Same here, but slightly different story. I stayed in cash for too long and missed the rapid drop (the recovery was so fast I couldnt capture it).
Worse, I purchased puts as the recovery happened through April and May and am on point to loose a lot. You live and learn. I’m not making that mistake again.
Travis, you are a sane man in a crazy world. I want to thank you for your insights that help me to be centered and not go off and try to look at investments as a easy proposition.
Your insights into the market are honest and give us all a chance to make money and not lose our shirts. You are a honest man and that comes across to make Stock Gumshoe and you a solid keeper. I will belong as long as you want to offer this platform.
Thanks so much, I really appreciate the kind thoughts.
My Question for all the upscale newsletter writers is: “If you can double your money in a short time like promised, why are you writing newsletters?”
Travis,
Why makes the comments so tiny to read, hard to read. It gives me a headache! Please make the letters
bigger to its normal size. I started following you as a young man, now I am 70 years old. Please make it
friendlier to us old goat, please and thank you.
The font should be adjustable within your browser to some degree, but thanks for letting us know.
Who the Target could be?
—————————————————————————————————-
May 13, 2020 17:19 ET | Source: Forum Merger II Corporation
Delray Beach, FL, May 13, 2020 (GLOBE NEWSWIRE) — Forum Merger II Corporation (Nasdaq: FMCI) (“Forum” or the “Company”) today announced it has signed a letter of intent and expects to sign a definitive agreement to acquire a high-growth, plant-based food company with a broad portfolio of innovative products that are aligned with major food trends and sold through leading retailers and distributors across the United States (the “Target”).
The Target’s disruptive strategy is focused on addressing the growing consumer demand for nutritious, great tasting, better-for-you products with plant-based food. The Target’s alignment with today’s secular food trends, combined with its robust, plant-based offerings that feature unique ingredients, innovative recipes and creative branding, has allowed it to establish a meaningful market presence in a short period of time. Forum believes that the Target has a compelling financial profile, with significant historical and projected revenue growth and profitability. Forum’s management expects that the anticipated valuation at consummation of the business combination transaction will represent a meaningful discount to relevant public comparable multiples.
Completion of the transaction is subject to, among other things, the negotiation and execution of a definitive agreement providing for the transaction, satisfaction of the closing conditions included therein and approval of the transaction by Forum’s shareholders. Accordingly, there can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated.
About Forum Merger II Corporation
Forum Merger II Corporation is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
It seems to me that newsletters that would have traded for $199 in 2010, now trade for $1999, simply because (as you observe) readers expect quality, i.e. the “good stuff”, for the high prices, and publishers have realized to their delight that by boosting their prices immensely they can boost their profits hugely too for providing pretty much the same material. How much inflation in newsletter prices have you observed over the many years that you’ve been following the industry? For instance, I’ve been subscribed to a precious metals newsletter since 2007 for a “legacy” price that is now 1/10th of what new customers are being charged.
I have been intrigued by trader Mark Minervini. After reading this Friday File, I thought it would be appropriate to ask the Stock Gumshoe Community (including Travis)…any thoughts on Mark Minervini??? I will probably just start with his books…but any comments on his service??? Any shared thoughts would be greatly appreciated! Have a great day everyone!
I don’t know him at all, though he was featured in one of Schwagers “Market Wizards” books where he interviews successful traders — might start with those, since you’ll get an idea of different styles from many traders and have some context before you consider a more expensive commitment.
I’m reading his first book right now, Trade Like a Stock Market Wizard, and you can see the CANSLIM in his background. Overall, he believes in market timing and minimizing your losses. His concept is you will make mistakes, so minimize those and maximize your winners. Overall it’s a very good read. I really am enjoying his section on portfolio management.