Rally Caps On
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This is the weekly article and Pod/Video Show 40 – Rally Caps On
October has been relatively quiet thus far and last week was slow but this week we began earnings season and many of our names we’ve talked about on this show and in the report have performed very well: $TSM, $SCHW to name two have just been great and I’m glad we were able to get clients into them for this quarter. I’ve also got some things I want to talk about this week with:
- Papa Johns Update
- Boeing – Thoughts ahead of Earnings
- Schwab Earnings Thoughts
- HIMS – Added to the SP600
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We publish the article of the week every Friday here on TheLongVol.com and then the podcast/videocast is on Spotify and YouTube.
Three main topics for today’s show – as always, a life update then:
- Articles of Interest from This Week
- Reviewing Some of Our Research/Calls
- Broad Market Outlook – Rally caps on
- China Check Back
- Q&A for The Week
Quote of The Week
Favorite Articles This Week
Review of Our Research/Calls
This has been a good start to Q4 for the report as we’ve waited on a few ideas to finally come to fruition and proof to the idea that patience pays and when you get it right you get rewarded. We write the weekly LongVol Report covering 4 Stock Monitors and over 50 tickers tracked each week. You can get a copy on the website.
These reviews are more of the Core Positions we’ve discussed as of the last few quarters.
You can view the AST (Active Swing Trade) Portfolio returns here.
Accredited Investors/qualified institutions learn more about the firm here and what we do.
TSMC – Taiwan Semiconductor
This has been a core hold for client portfolios since the Summer and I’m happy to say we’ve booked the gains. I do think we get a chance to rebuy this but we had to just realize the gains on this given the move from $140s.
- $TSMC – this was a name I introduced over 5 months ago. (original post here)
- Earnings were as good as it gets, the stock was up +$20 or 10% (earnings recap)
Papa Johns
This was a name we introduced over 5 months ago titled “Papa Johns: Turnaround or Dud?”
- They’ve got a new CEO
- Announced investor day in December
- Data has started to improve with retail sales in that sector (recent order flow in the name agrees)
- Still waiting on earnings to see if the items discussed are working
Charles Schwab
Charles Schwab Bank was the problem last year (and likely still is a bit) based on the bond purchases they (and many banks) decided to make. Again you can get up to date on that here. To get it out of the way, it was just a really silly mistake by their board and whoever else was in charge to allow that to happen but it did.
This was the alert(there were a few) from the AST Alerts Portfolio – let’s have a look at that and the chart.
HIMS
HIMS ($HIMS) made into the Swing Monitor at the start of October. This was originally a technically driven idea but then turned into an event-driven one once they announced they would join the S&P600 Small Cap Index.
The event was the addition into the Index which requires forced buying on the name as it’s added in which helps the cause for a trade. I flagged this in the report (41 on Sunday) and added into this idea which was good for about an extra 8% on the equity.
Broad Market Analysis
The grind higher continues and the data remains strong signaling that we’re not going to get a rate cut here in November but then again that changes meeting by meeting. My overall broad market views in bullet points:
- SP500 $6,000 on target & we grind higher
- Likely some volatility on election night
- Still choppy/sideways/grind until election
Now a quick message from The Doomers – they’re back with their usual act; When will the world end – we’re right, this time, again
Google & Amazon are on my list to look at swings into end of year. Hard to ignore them given the chart and sentiment and sometimes trading beta (mag 7) is good to capture some BPs.
Gold again hit new all-time highs and NPCs still believe the inflation numbers as if we are not well higher from pre-2020. Sometimes, you can’t fix stupid and metals/miners are telling you their vote.
Wheaton Precious Metals was introduced in the report end of July and is now +20% with a new all time high today.
Materials and energy are underweight – maybe some rotation here soon but also interested in who wins the election as it relates to energy (oil/gas names).
Bad news is good news? Is it priced in already? We have earnings next week – I took a position here this week on it.
- Pulling back nicely as expected
- Will look to $BABA adds again soon based on index additions and forced institutional buying
Will discuss more in the report this weekend. Make sure you are a subscriber.
Final Word.
- Report out this weekend Issue 41
- Open Q&A for the Show this week
- Choppy broad market action to continue
- Energy/oil likely to continue to trade in a wide range
Thanks for reading/watching/listening this week! See you Sunday for the report!
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Event-Driven Investing
Turnaround Stocks
Risk Adjusted
About the Author
Daniel Bustamante is the founder, managing partner, and CIO of Bustamante Capital Management L.L.C., a multi-strategy investment management fir. He has over 15 years of experience in the financial industry, specializing in equities, futures, and event-driven trading strategies.
He is also the founder of TheLongVol.com, a blog and newsletter that shares his insights on his investing process, travel, and other private investments. He has been featured in Bloomberg, Arizona Business Journal, Business Insider, Yahoo! Finance, Forbes, Seeking Alpha, and other publications over his career on Wall Street.