July Newsletter Part III: 2H 2021 Sectors & Stocks
Hey Subscriber,
Ok--we made some nice $money with our SQQQ calls (and XOP put hedges for All-Access members).
And if you bought or added to our Transformity Global Digital Platform Dominators FAAAGM during the quick panic sell-offs, you are up 5-10% in the names reporting this week (Facebook, Amazon, GOOG, Microsoft, Amazon) and Adobe next week.
Rule #1 Transformity Investing in 2H 2021: BUY the pullbacks to/past the 50-day price moving averages--everyone ELSE does!
Why is everyone in the world buying the SP 500 50-day dip?
Well let's count the reasons why:
1) Global Investors worldwide are snapping up the SP 500 index/QQQ on pullbacks like never before. Refinitiv Lipper reported $900 BILLION of new inflows from investors domiciled outside the USA.
Why? Because they have $trillions of cash on the sidelines earning negative returns, they can hedge dollar risk cheaply (for bonds and equities) and they rightly see the data and surmise even with our "Pandemic of the Unvaccinated Covidiots" the 7% ish GDP rebound of the world's largest economy is going to dwarf their own countries.
But why buy all the indexes when they can lower their costs and increase their return by buying our American FAAAGM stocks--they get 26% of the SP Index without the other 494!
2) Stock buybacks are kicking in for all the FAAAMG names...$800 billion in buybacks starting with Apple are now kicking in. FAAMG generates so much extra cash they can begin to spend it all--and stock buybacks basically take stock option created stock and buy it back to keep EPS going up.
Statement of the Not So Obvious: When the history is written about how the top 10% of American households wound up with 75% of the total wealth in America...and the bottom 60% only own 2.6% of American household wealth...
. . .it will read "The Top 10% knowledge workers founded companies or got low-cost stock options some of which they cashed in to buy really nice houses in NIMBY neighborhoods with good schools--and then there was the pandemic and their homes went 25-35% up in value in a year!"
3) China Stocks Are Untouchable: The war on the Chinese billionaires started with Jack Ma founder of Alibaba. We should have surmised that him going incognito for 9 months after the botched ANT fintech spin-off would have put another $50 billion or so in his pocket that he would not be the last billionaire or industry to get Biǎo zi dǎ ěrguāng aka bitch slapped by the CCP (I have spent a lot of time with Chinese business owners in Beijing/Shanghai/Hong Kong--I learned a few choice terms!)
But the reports of a massive crackdown today by China on their huge tutoring industry (YO--IF you are not aware--every Chinese/Asian/Indian household I know in China or North America I swear would forgo food if they could not pay for their kids' pre/after/weekend/holidays school tutoring classes! Why do they kick our gwailou butts in school? Read the last sentence again).
If the reports are correct--"for-profit" tutoring companies would have to become "non-profit." Do you feel crummy if you have a bad day in the market and are down say $10 grand? How bout this guy--down $15 BILLION!
Key point: If you can't hold $billions in Chinese secular organic growth stocks, where does that money wind up?
Yea you got it--that money is going into the safest and most reliable organic 20%+ secular growth American listed FAAAMG names and some of the global vertical API names we will add later this week.
The Result? Our FAAAMG stocks continue to hit and pass all-time high prices day-after-day like Simone Biles racks up all-time gold medals (yes the Smith house are total Olympics junkies!) which continues to prove out our primary 2022 Ultra Growth portfolio investment thesis:
1) Global Digital Enterprise & Consumer E-Platform dominators are winners with impregnable competitive moats that keep winning
2) IF they get attacked for anti-trust and have to split up some of their platforms, the two or three stocks they split into go even higher and faster than the mothership (see ATT or Rockerfeller Oil etc).
3) Amazon/Facebook/GOOG now sells 56% of ALL advertising in the world!
4) That the great Hybrid Work Transformation of 2029-2021 is second in magnitude and future wealth creation only to the Internet/Netscape Browser in the mid-90's and the PC revolution of the mid 1980's.
My favorite and most trusted seer of the Hybrid Work revolution is Marc Andreeson (who invented the Netscape Browser btw in college) and is now the multi-billionaire general partner of a16z venture capital (with over 246 cutting edge tech disruptor VC investments all over the world.)
Marc famously (and correctly) said in 2010 "Software eats the world."
Here is a copy of their report on the New Hybrid Work revolution listen to what MA has to say about our Hybrid Work has Transformed the World thesis.
The Guy Who Said “Software Will Eat the World” Now Says “Remote work has changed everything.”
“There is an enduring civilizational change,” wrote Marc Andreessen in a recent blog post. It is “a consequence of the Internet that is perhaps even more important,” he wrote.
Remote work has opened up opportunities for knowledge workers, which can lead to shared prosperity. Technology has saved the world.
He also said he said he believed remote working was “a lasting civilizational shift.” He said that its impact could be more than the Internet.
“It’s probably the most important thing that’s happened in my lifetime, a result of the Internet that’s probably even more important.” Permanently divorcing physical space from economic opportunity gives us a real shot at radically expanding the number of good jobs in the world, as well as the quality of life of millions, or even billions, of people. improves dramatically.”
He continued: “Ultimately, we can shatter the geographic lottery, opening up opportunities for countless people who weren’t lucky enough to be born in the right place. And people are leaping at the opportunities. At furious rates on both homes and jobs.”
Far-flung hybrid work is here to stay and it will continue to reshape society, with major implications for the economy and everything else."
Our Take: IN the hybrid work revolution one thing is for certain: there is no Hybrid Work revolution without
100% secure digital platforms
100% integrated vertical digital API functionality
Virtual Reality based Meetings
AI-Robotic Work enhancement
Thousands of new data centers + billions of new data storage and memory modules+ Nvidia/AMD chips and ASML LRCX AMAT semi equipment
5G wireless bandwidth
Billions of More Semiconductors
Millions of new affordable homes and shared multi-family living buildings in the new 10-12 regions of America (and the rest of the world) where the ex-super city knowledge workers can pursue their version of the American dream without $10-$20k a month living expenses.
New Digital Platform Dominator: Shopify Now Makes FAAAGMS!
To our FAAAGM Digital Dominators (which again we ALWAYS buy on these pullbacks to the 50-day price moving average), we have to add Shopify (SHOP) which we correctly bought on a big downturn in 2018 and stupidly sold the next year (we did the trade wit options--so we did get about a year's growth in 3 months--but still--bonehead move on our part to sell it--self-loathing emoji here).
Shopify has become the global dominator of e-commerce OFF Amazon. With Facebook, Instagram, Pinterest, and basically every global social media company now adopting social e-commerce worldwide using the Spotify eCommerce platform, they are the global defacto e-commerce platform.
Shopify now touches (and the e-commerce platform to FB/IG/Pinterest pages) over 2 billion social media users per day via their monster social media hosts.
And lets' not forget the explosion of 'mini entrepreneurs' in North America and around the world. IN the U.S. we have had a record of 2.5 million new small businesses and an explosion of one-person start-ups. Turns out if you pool your Pandemic relief checks together and stop going out to dinner for say a YEAR--you have enough money to start your own new e-commerce or consulting business.
Action to Take: Let's Buy a 1/3 position in SHOP under $1525 and add the next 2/3 under $1400. Remember, your job is to get the LOWEST cost basis on your positions and be tactical here with Ultra Growth stocks at such high valuations.
We don't chase stocks--but SHOP had a nice pullback today that we have been patiently waiting to happen.
Update on Investview Preferred and the INVU Common Stock
#1 By now if you own the INVU Preferred stock you should have received by mail your 3.25% quarterly dividend check. IF YOU HAVE NOT (we have reports of a few missing) email us a "Subscriber@TransformityResearch" immediately.
A few of our managed accounts are missing checks--we will follow up and get this squared away.
#2 You may have noticed the INVU moved from 11 cents to 22 cents in the last 6 trading days. We will go into the reasons in-depth later, but one reason is the massive expansion of their SafeTek bitcoin miner reclamation and repair business. They get paid $4000 to $4000 to fix broken BTC miner servers--and now fix 400+ per day.
SafeTek is also picking up thousands of miners from China BTC mining operations now closed by the CCP every MONTH for their OWN MINING OPERATION. They will double their size very shortly--and double again!
Finally, a fellow US-based BTC miner Core Scientific is going public at a whopping $4.3 BILLION valuation vs. INVU around $500 million. Here is the exciting part: Core Scientific mined 928 BTC in Q2 2021. and mined 1683 so far in 2021. INVU 922
Via their 100% owned Safetek subsidiary, INVU mined 921 BTC om 2021 and is in the process of doubling its mining capacity in 2021.
Question: IF Core Scientific is worth $4.5 billion, and SafeTek is on a path to mining MORE BTC every month than them, why is Core Scientific worth $4 billion more?
INVU is still a strong buy under .22 with a now $1.25 target (based on Core Scientific comp). And remember the Preferred shares you bought have 20% warrant coverage at .10 which means for every $1000 of the preferred you bought, you also have $2,000 of .10 warrants or 200 warrants that are now worth 1X more than the strike price.
BUT please don't take the easy profits now--there is a LOT more to come from Investview as they roll out their amazing LevelX trading platform.
OK, it's Olympics time! We are updating ALL buy under this week.
All-Access members--we are updating ALL our holdings and will email new option sales/buys this week as well as post in our All-Access Discord trading room.
Go USA!