UFI FLEX THO OUT & 50% of TITN REMOVED FROM THE BUY LIST THIS MORNING

Trimming the Fat Amid Uncertain Economic Times (Inflation / War / Supply Chain Bottlenecks / Semiconductor Shortages / Record High Energy Prices)

Mar 22

REMOVING WEAKNESS FROM THE BUY LIST: These companies are great companies & will do fine over the long haul. However I am not going to sit on them as they recover over the next year or so. I think my money can be better placed elsewhere. I MUST come to realize that the underlying financial & economic conditions that existed when they were added are NOT in existence today! Examples below.

PROBLEMS AHEAD: As indicated before, shit is getting bleak. Inflation is a very very real threat! This war in Ukraine will only worsen inflation in energy, steel, food, etc. Moreover there are still very real backlogs. Energy is becoming a very real problem.

PRICING OUT: I cannot know what kind of lives you all live. But for middle class folks, they’re getting priced out of the market … & fast. When people get priced out of the market they economize on their needs & cut back on their wants. This leads to less goods purchased, and therefore, less revenue for retailers. Less revenue for retailers leads to less investment, price cuts to break even, & layoffs. Layoffs lead to less employment, & less spending. It may not go exactly like this but you get the point. EVERY EXTRA DOLLAR shoppers pay for ANYTHING is a dollar that cannot be spent somewhere else. If you have been in the market for more than a decade you know this tune. If you’ve been in since 2019, this is a new phenomena to you (2018 was not a great year). I assure you, its real.

FED RATE HIKES: The market is so overheated, inflation is so rampant, & there is so much worldwide uncertainty, that these rate hikes are going to amount to a whole lot of nothing. We will be lucky if inflation isn’t at 10% by July-November (It’s above that already in many aspects of the economy, I’m talking about the CPI). THE FED WILL BE GRADUALLY RAISING RATES RIGHT AT THE MOMENT THAT BUSINESSES WILL NEED CREDIT TO MAKE ENDS MEET AS CONSUMERS ARE GETTING PRICED OUT.

WE CAN NO LONGER LOOK TWO EARNINGS OUT: Companies that are meeting analysts expectations or even smashing earnings in many cases are dumping all the same. TLYS & AOUT did fine! THO did outstanding! FLEX did great! However the street isn’t pricing in next earnings … they’re pricing in turmoil.

MOVING FORWARD: We are going to have to hedge, we are going to have to go short (There are ways to do this safely & I will teach you soon), I am not through re-arranging the BUY LIST, & long positions will require EXTREME SCRUTINY a patience.

CUTTING THE FAT: As a result of headwinds, I have cut the following from the BUY LIST. Please read the summary that was written when they were posted. See where I was right, & see where I was wrong. See my assumptions, & see what actually happened. It’s a great learning exercise. Things are much different than when they were added.

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