Hey Subscriber,

As I shared with you last night "We have to think the chances of JPowell going all Rambo on Fed Funds rate hikes are very low."

But what the Street did NOT price in was such a bullish and well explained 2022 plan as laid out by my new best friend/man crush Jay Powell:
1) The Fed is three months and Done as in YES they are done with $1.2 trillion bond-buying QE but more important publicly acknowledging that ANY deviation from those expectations would roil both the stock and bond markets.

Result: Financial markets LOVE it when the Fed is sensitive to what makes stocks go up in value and the Fed guidance sets a glide path for an economic "soft landing" in 2022 from rate hikes.

In short, Wall Street can HANDLE this updated Fed rate hike guidance and fear-based shorts turned into a bullish short-covering rally.

In short: By explicitly saying the Fed was not going to carpet bomb the economy BUT short term rates ARE rising to .75-1% in 2022 (as they should), Chairman Powell also "told us" that same stocks that have been crushed (with a few exceptional companies crushed in the panic selling) since the "Powell Pivot" for the most part are still priced for zero Fed Funds rates and need to come back farther in valuation to be investable.

By admitting that the Fed's 2% annual CPI inflation goal (which was never reached for 11 years in the good old disinflationary days of 2009-2020) is NOT GOING to get below 2% by the end of 2022 (and realistically 2023) is a GOOD thing--again it tamped down Street fears of monetary mistake and a rate hike carpet-bombing.

To reiterate the 2022 "Univestables" sector (again with a few exceptions)

1) 25X+ forward revenues cloud software and other big no actual income concepts stocks
2) At least 80% of 485 in 2020-2021 IPOs (NOT including SPACS) selling UNDER their IPO opening day price
3) Chinese stocks listed on NYSE/Nasdaq with serious risk of being de-listed although I hear of a "detente" being pitched by China. IN fact, the bull case for Chinese stocks in 2022 is built on the expectation that economic policymakers will support the economy in 2022 to prevent a hard landing. That would mean easing off on a regulatory clampdown that has depressed the valuations of Chinese stocks traded on US stock exchanges.

PS--The People’s Bank of China reinforced this building bullish consensus this month when it freed up liquidity for lenders. There is now heavy speculation that Chinese banks will lower their benchmark loan rate next week for the first time since April 2020. We will monitor

4) the 90% of 550 SPACS in 2021 selling under $10-$11 that the SEC is going make get rid of their 5-year Pro-forma projections

5) MOST stocks owned by Cathie Wood and the ARK ETFs now hemorrhaging $billions in redemptions (just wait till Jan 3, 2022!)

6) MEME stocks still getting maimed

7) EV/Hydrogen/Solar/Wind economy stocks without substantial pre-sold 2022 revenues

Net Net: What investors WANT to own NOW are stocks that 1) don't have to borrow money and have low cost fixed rate debt 2) that have a track record of raising profits in rising Fed rate environments 3) have $billions in excess cash flow to buy back stock and pay dividends 4) maintain high 40%+ gross margins with 5) significant contracted or subscription recurring revenues

All of the Above Makes Our Game Over Global Digital Dominator companies the lowest risk/highest reward investments Again in 2022!

Our Facebook, Apple, Adobe, Amazon, Microsoft, Google, Taiwan Semiconductor, and even Shopify are BUYs here (with a $1300 sell stop on SHOP).

New Additions to Ultra Growth: It's also safe to buy and add back Nvidia (NVDA), AMD, QCOM, Marvel (MRVL), AVGO, Micron MU, and LRCX right now.

We will add a few more Semiconductor manufacturing equipment plays next week. We are also in the process of updating ALL buy under prices in Ultra Growth and Ultra Income--will send out an updated buy under list.

What about Omicron? Here again are the latest infection doubling rates (i.e, exponential growth rates) in the United States

The good news is more and more data says Omicron is "4X higher transmissibility but with significantly lower symptoms for fully vaccinated."

It's still too early to bottom fish travel/leisure/indoor entertainment/ gambling/ cruise ships and food service stocks--but we are building our favorite names

Thanks again JP--you learned what NOT to do in the December Fed meeting in 2018--and you hit it out of the park today!

Action Plan: 1) We need to get a 36+ VIX panic sell-off day with our beloved Mega Cap Apex technology companies i.e., market leadership getting hit too--that will be the sign of real capitulation. We got close today at 33 VIX.

Trust me: We will send out a "TIME TO BE BRAVE" email when appropriate.

You must remember in the simplest but most accurate description of how any live auction stock market works, the market bottoms when all they who HAVE TO SELL (margin calls) and those who can't take the brain damage of seeing their beloved stocks drop below their cost basis (aka "weak hands") have sold.

2) The biggest risk to the market right now is obviously there are too many known unknowns about Omicron:


TR Wealth Management remains over 40% in cash or variable rate closed-end funds that benefit from higher longer-term rates) and 60% in our Global Apex Digital Dominators and our Ultra Income stocks/MLPs/ETFs.



NOBODY needs to be a hero here--you DO need to be aware of actual reality, have a plan (reread the above if still unsure) and have the liquidity to take advantage of ALL the delayed spending on travel, services, and the transformation of our work lives, the coming metaverse, and lots of great emerging companies too.

Cheers,

Toby