IMPORTANT DISCLAIMER: I am NOT a registered investment adviser, broker dealer, or member of any other association for research providers in any jurisdiction whatsoever & I am NOT qualified to give financial advice. Investing/Trading in securities, particularly microcap securities, is highly speculative & carries an extremely high degree of risk. The information, analysis, & opinions listed above are my own & may not properly reflect the underlying conditions of a company or security. You should do your own Due Diligence. Past performance does not guarantee future results. If you trade based on anything I have written YOU ACCEPT FULL RESPONSIBILITY AND LIABILITY for your own trades & actions & hold the author of this publication harmless. If that isn’t clear enough DO NOT TRADE, ACT, OR INVEST, BASED UPON ANYTHING I WRITE OR RECOMMEND. There, we should be solid now.

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Before you Trade Today: Know the Economic Calendar! Also See This Weeks Most Anticipated Earnings (Note: Red Indicates an Earnings Loss [Not Miss] Consensus), Yesterdays Insider Buys & Yesterdays Unusual Call Options Volume.

TODAYS COMMENTARY Get a Cup of Coffee & Enjoy Catching Up!

Today: At the time of typing this, Asian markets are down, European markets are down, U.S. futures are down, & the Fed interest rate decision will be announced at 2:30PM ET tomorrow. Of course, war fears are still dominating the headlines & home prices will be announced today. I’m ignoring the noise & paying attention to the earnings. There’s certainly a lot of companies that are either/both related to our holdings and/or providing some solid insight into the various sectors/industries, whose earnings we ought to be paying attention to. That’s the great thing about market noise. Everyone pays attention to the obvious threat in front of them, not the indicators of future great opportunities. As I learned in the infantry, if you’re distracted by the IED placed visibly obvious in the middle of the road while on convoy, you aren’t as keen to notice the ambush set up to eat your lunch when you stop. So in such situations you DO NOT STOP! You switch lanes, make adjustments, carry on, & call it in, … lest you let your enemies determine whether you get to proceed with the mission or not. And if you stop to stare at the bomb, your immediate mission will become a MEDEVAC. So what’s the point? Don’t let the market noise distract you from finding & realizing trends in earnings that can help you identify solid value. Earnings are the one time you get to confirm your industry/sector analysis. It’s best to do it while everyone else is distracted.

WHAT THE HELL WAS THAT!!?: Yesterday the markets immediately sold off in the morning. I tuned out the markets comforted in the value & fundamentals of my picks. It was one of those rare moments where I found myself caught up by lunch so I worked on my resume (I’m making a transition in careers, if you guys know of any solid private sector employers looking for the skills of a very seasoned former intel analyst, comment below). I applied for one job after completing the resume & then looked at my picks. My eyes widened & I immediately knew that the markets we’re either in a rally, or there was a shift to value. Perhaps a little of both. I can understand sentiment changing on a dime, but I haven’t seen a swing this wild since that massive 1000 point swing in the DOW in early 2020. Should we trust that this will stick? I’m certain that there will be more bait & switch days but should we care if we’re getting stocks at a steal valuation? I think not.

Wild Swings Explained: When markets dump on uncertainty it’s usually kicked off by an institution or two controlling a very large amount of money. In their mind, they want to the be the first to dump before everyone else does. All they need is a catalyst, & inflation combined with increasing bond yields, turmoil in international markets, possible war in the Ukraine, & the upcoming Fed interest rate decision provided all the catalysts needed. Upon going short & selling, the street gets wise & the sentiment quickly spreads. Indeed professional trading firms pay close attention to order flow. So others follow suit, taking profit & going short. As in any market dump, prices can only go so low before intuitions & firms cannot resist the value. Just like the firms that wanted to be the first do dump, there is usually just as much money out there that wants to be the first to buy, often in the effort of averaging down. When you get enough order flow on the buy side, word spreads quick, shorts panic cover, & the market violently shoots up … classic. Remember we can’t control how people trade, but we can control the value & quality of what we buy.

Corrections Always Overcorrect & Why I Ignored the Dump: Just as stocks get overbought, they also get oversold. You can find two stocks in particular on my BUY LIST that are deeply oversold. Why in Gods name am I still holding them you may ask? Well, corrections based on uncertain catalysts are derived from fear, not the actual underlying conditions … panic is often devoid of the underlying conditions. I’m not saying things are peachy, but rather the market makes negativity seem worse than it actually is, particularly if you’re investing your own money. The market is a very impatient beast; indeed, folks want their money yesterday, & if they don’t get it, they’ll accept the loss in search of another stock to lose money on. I don’t do business that way.

I trust my analysis, I trust the fundamentals, & I trust my own economic assessments. I only choose stocks that, if the trade turns against me, I assess a high probability that holding over a reasonable time will result in an eventual gain. It is an extra layer of security on an already great trading strategy of buying reliably profitable value on a pullback of little to no consequence under favorable economic conditions & with solid institutional investment. Therefore, I may average down on a dump, but pending no change in my personal assessment, there is no need for me to sell a good company! As a result I have come to be excellent at ignoring market dumps. I leave the freaking out to others. Time is too precious to worry about how others are bugging out …. And that’s exactly what you’re doing when you ignore the fundamentals & fall prey to the sentiment of others. You forget about the value you have for fear of how others will trade. I’m certain you see the flaw in this reasoning. If the markets dump tomorrow I will continue on as I always have. Could I live to regret it? Certainly. But I like what I got & I can always buy more.

Could there be More Market Dumping?: Yes, I wrote about this Yesterday.

How Far can a Reliably Profitable Value Buy Sell Off?: Well we’re finding out. There is a lot of confusion in the market. Many stocks that were trading many multiples beyond fair value are getting slaughtered. However check this creamy goodness out! Prior to market open yesterday my BUY LIST had an assessed average Forward Price to Earnings (PE) ratio of 11.10 while the S&P had a forward PE of 25.85 (Good Lord). The average Price to Sales (PS) ratio on my BUY LIST is roughly 1.07 (S&P 500 is 2.85) while the average Price to Earnings Growth (PEG) ratio (of those that can be properly assessed on my buy list) is assessed as 0.56 with an average Price to Book (PB) ratio of 1.70 (S&P is 4.38). All of the stocks on my BUY LIST except for 2, are trading with their Market Cap below their Enterprise Value. The average current ratio of the stocks on the BUY LIST is 2.22, meaning they can pay their debts. Ladies and Gent’s, that’s some solid value, that’s some solid growth, & I’m happy to let the market throw a fit. The lower the market dips the better the PE/PS/PEG ratios become. That should get big money’s attention! It also gives me some solid comfort.

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Significant News Heading into 01.25.2022:

• Dow futures fall more than 250 points, Nasdaq futures shed 1% as market’s wild ride continues

• Asian shares extend losses on Ukraine fears and Fed jitters

• Asia Stocks, U.S Futures Fall on Fed, Russia Risks: Markets Wrap

• European stocks head for higher open as volatility grips global markets

• Japan’s Topix Enters Correction Amid Selloff on Fed, Ukraine

• As the U.S. tries to stop a war between Russia and Ukraine, Europe takes a back seat

• Inflation Fears Rise as Singapore Tightens Before Fed Meeting

• Credit Suisse issues fourth-quarter profit warning as legal costs rise (I have a close eye on banks & investment banking)

• Cramer says selling not done for tech stocks trading at high multiples to sales: ‘Those have had it’

• ‘Double down’ on defense because stocks will plunge another 10%, Morgan Stanley’s Mike Wilson warns

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PAID CONTENT IN THE PAYWALL BELOW:

• 1 Stock Added to the Buy List Today

• 15 Stocks near/at/above the Buy Zone (Waiting to Swing).

• 1 Stock in the Profit Zone

• 58 Stocks on the Price Based Assessment Watchlist

• 13 Stocks on the Stocks Under $20 List (Read the Warning/Disclaimer)

• 6 Stocks on the Highly Speculative Highly Volatile Small Cap List (Read the Warning/Disclaimer)

👉CLICK HERE TO SEE THE DETAILS OF EVERY STOCK ON THE BUY LIST (AND SEE THE PRICE ASSESSMENT BASED WATCHLIST / THE STOCKS UNDER $20 LIST & THE HIGHLY SPECULATIVE LIST)

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