- Sometimes you win, sometimes you lose and sometimes the blues will get a hold on you.
- Life thoughts from JFL
We made our outlook on the market very clear in the last few months. There are influencers in the market that say differntly. They have deeper pockets. They come up with slogans that are repeated so often that they are used to define the market. One of them is...
Forward Looking
This says that the market has calculated all aspects of price pertaining to the market. The present price of the market is accurate. In its present price level, these analysts (we call them shills) say that the market has already included a recession with its pricing. This thinking is flawed! When, and if, the market believes that we are in a recession, the drop in pricing will create fear. This will cause the indexes to fall like an elevator losing its support cables.
Every Day, Every Week...
...the market re-evaluates stocks and their price levels. In most cases, this is after earnings are announced. We have a short list to prove our point. This also reveals the misconception of the market using forward looking pricing. How about...
TOST
It also shows how IPOs can be used to manipulate people to purchase stock. The IPO came out in 2021 at $40. This is a company that has never made money. The forward looking price hit $70. Last Friday, it was $19.96. We see it falling to $13.50. They still do not make money!
KBH
This is a good home construction firm. They offered an outlook of sales of their homes. They said 2,000. It came in at 700. Forward looking had it price in May of 2021 at $56. Today, it is $35. It will probably drop to $24. Thanks to the Fed.
DOCU
This firm had a great idea. It allows buyers or sellers to use an internet signature. The problem is technology keeps developing. Now, they are losing money by the boatload. In August of 2021, forward looking pricing had the stock at $314. Last Friday, it was $58. OUCH!
SPLK
This company is beginning to continually show a loss in its statement. In November of 2021, the forward looking price was $176, Last Friday, it was $88. We see $65 coming.
Then, there is the garbage, meme stocks. You are better off picking a football team to win than play this game. You could be left holding the bag or no chair to sit in musical chairs. Here are a few.
BBBY, CVNA, PRTY. We could add another ten, but you get the idea. Now, in the concept of truth, here is a stock that we recommended last year. It fell immediately after we announced it. We looked bad. Dear Reader, I can tell you that we felt twice as bad. It is one reason that we fear to back a stock and their company. Anyway, RIG, fell from $4.25 to around $2.30. We declared that we still like the outlook. Last Friday, it hit $5,66. With that fact, remember this truth,
What Goes Up...
...can go down. The bulls are seeking to regain control of the market. Their battle is showing that the market will be in a trading range until the end of the month and the Fed's next move. If you have a firm that you follow, this is a good time to play it. Getting back to RIG. I follow it. It has gone straight up. The highest that we see it going is to $8. With that said, we will look to the oil price for harmony. RIG will make a nice, quick trade short. It should retrace to $4.50. Anyway, that's the plan. Patience! Peace.
