The Beginner’s Edge A Monthly Digest
Death of the Dollar!
“Fiat Money inevitably returns to its intrinsic value - Zero .” Voltaire
by Alex Cunningham on June 1st, host of Market Adventures Podcast
Welcome to the Market Adventures monthly newsletter! I’m glad you’re here and even more excited that you’ve taken an interest in the stock market. If you’re getting this and you bought the stock market 101 course, this is where you put that information to work. You’ve learned the basics, now you see some real life examples.
“This newsletter and all related Market Adventures content is not investing advice. Everything you are about to read is merely the opinion of the writer. Please seek the counsel of a financial advisor prior to making any investment decisions. Though the stock market does present many opportunities to make money, there are an infinite number of ways to lose all or more than your original investment. That being said. Don’t invest or trade in any security mentioned in this publication or its related content.” Now that that’s out of the way…
Follow The Money
Sector Update - Markets Broadening
Money seems to be moving into sectors that were ignored during the pandemic and even early in the recovery. Tech and consumer discretionary was down for the month, as investors moved into the less mainstream sectors like materials, real estate, consumer staples and industrials. Banks and energy continued to be strong as the economy reopening shows demand for these “products.”
Market broadening in simple terms means that the steady climb in the stock market is no longer being fueled by 1 or 2 sectors. Money and a general bullish sentiment is spreading into multiple sectors. So while tech kept the market strong during and shortly after the height of the pandemic, investors are moving out of tech and into companies more cyclical in nature which shows optimism for the broader economy.
View this chart: https://stockcharts.com/freecharts/perf.php?[SECT]
Always Start With
The Broader Market | S&P 500
Price Action Is Superior To Indicators
The dollar is still struggling to regain strength as Biden continues to lobby for a multi-trillion dollar infrastructure bill.
Economic data dates: June 1st ISM manufacturing, June 3rd Non-manufacturing PMI, June 4th Non-farm payrolls and Fed Chair Powell, June 10th Inflation data, June 15th retail sales, June 16th FOMC and interest rates.
Learn Something New
Consumer discretionary sector includes goods and services that are considered non-essential by consumers, but desirable if their available income is sufficient to purchase them. Ex: Amazon, Tesla, Home Depot, Starbucks
FIND A WAY TO
PUT YOUR MONEY TO WORK
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While I’m waiting for investment opportunities, why would I leave my hard earned money in a bank savings account paying LESS than HALF of 1%? Inflation alone, at 2-3% a year means you’re losing money every day it sits there. Here’s what I’ve been doing: 10% of every paycheck goes into my Blockfi interest account. By loaning out my funds, I earn enough interest to beat inflation and grow my money with compound interest. Use My Link To Get Free Crypto When You Fund Your Account
Discount Dividend Investing: AT&T (5% yield)
AT&T has done a great job in the recent year or so of reducing its debt and cleaning up its balance sheet of non-productive assets. The stock has lagged behind the market and recently, after moving up almost 14%, erased all its gains for 2021 in one week. The market didn’t like the dividend reduction and separation of HBO Max from the core company. Still, the return to these pandemic prices, to me, represents an opportunity because the company fundamentals haven’t changed, in fact they’ve gotten stronger and investors are selling. Not a recommendation but I’m still holding a large position in AT&T as a high-yield dividend and growth play. Check out their investor relations page for more information.
Let’s Look At
Stocks To Watch | Swing Trading
Conservative Monthly Profit Goal: 5% Move In Stock Price
Scale in 1/3rd lots: buying a third in the box, another third on the breakout and the final third on the confirmation up.
We’re in a Bull market. Let it run unless there is a technical or major fundamental reason to reduce position.
2% loss rule, don’t lose more than 2% of the entire portfolio balance on any one trade
Have a target to take profits. An exit strategy. 3% conservative, 5% in this market is common.
Wait For the Set Up
Remember, the general market supersedes individual stocks. Even when individual stocks set up to move higher, a general market downturn will weigh on all securities.
1st target $225 (5%) | Next target $229 (7%) | Analyst avg. price target: $304 (42%)
Need RSI to break above par (50), Move above 20 MA (green line)
1st target $160 (14%) | Analyst avg. price target: $174
Need RSI to break above par (50) and price to move above 20 MA (green line)
Super early but it’s below IPO price. Still part of reopening. If this accumulation turns out to be a distribution….look out below.
1st target $12.50 (5%) | Analyst avg. price target: $16 | Short float 42%
Need RSI to break above par (50) and price to move above 20 MA (green line)
Super speculative. Great choice for a short squeeze if enough investors pile in.
Other potential movers: $AAPL, $BTC, and $ETHE setting up nicely
Featured Episode: Day Trading Doesn’t Work
Simply put, the risk to reward is not appetizing. There’s a reason rich and wealthy investors don't day trade. Day trading successfully requires you to spend a lot of time looking at the charts because timing is so crucial to profiting with such a tight ratio. Sitting and watching charts all day looking for signals to enter and exit is a JOB, NOT INVESTING
Nobody has created lasting wealth as a day trader.
This Month’s Long-term Stock Pick
Verizon ($VZ), 4.44% Dividend Quarterly Yield (source: TdAmeritrade)
SOURCES OF VALUE
Mobile Plans & Phones constitute the majority of Verizon's value for these two reasons:
High Revenue Per Subscriber
Verizon's wireless revenues per subscriber are higher than its wireline operations and margins are also thick. Although wireless ARPUs are lower compared to the carrier's FiOS ARPUs (which remain a growth area for the wireline business) the number of mobile subscribers is much higher than FiOS subscribers, making mobile phones & plans Verizon's most important division.
Large share of the postpaid wireless market
Verizon has the largest number of lucrative postpaid phone subscribers in the U.S. wireless market. The carrier's focus on less lucrative segments such as wholesale and prepaid remains limited compared to other carriers.
Verizon's interest in mobile advertising and content
Verizon’s interest in over-the-top (OTT) services such as mobile video and advertising has been growing, as people spend more time on their mobile devices. Ad spending is quickly moving away from traditional media such as TV and newspapers, and onto mobile devices. U.S. Mobile ad spending was projected to grow by about 38% in 2015 to $42 billion, according to estimates from eMarketer, accounting for close to 21.6% of total media ad spending and 62.6% of digital ad spending. Mobile advertising seems like a natural fit for Verizon, given its massive wireless subscriber base (over 112 million subscribers), customer data sets and its control over the so-called “wireless last mile”.In 2015, the company bought AOL in a $4.4 billion deal, gaining access to a robust programmatic and video advertising platform as well a vast library of original content. In July 2016, the company announced a deal to acquire Yahoo's operating business for about $4.8 billion, enabling it to bolster its presence in the search engine and native advertising market.
Push to increase 4G capacity and deploy 5G
All major mobile operators in the U.S. have built expansive 4G networks that offer 5-10 times higher data speeds than 3G. As the first to deploy LTE, Verizon has maintained the lead and has been consistently ranked the best U.S. operator in terms of network coverage and quality. Verizon was also the world’s first carrier to take a serious step into the next-generation 5G wireless technology and the company has been steadily bolstering its millimeter wave spectrum in order to meet the bandwidth needs of the next-generation service. The company started offering wireless residential broadband services using 5G technology in a few U.S. cities in late 2018 and mobile 5G deployments could begin in the near-term.
It’s Finally Here The Options 101 Course
If you’re interested in learning about options trading and see how I used these 3 strategies to see success as a beginner go to stockcourses.co.
My Current Long-Term Holdings:
$T, $WKHS, $AGNC, $XRX, $IRM, $WFC, $MO, $ABBV, $XLE, $PFE, $O, $HBI, $INTC, $KO, $IBM $ARKX $COIN
My Current Cryptocurrency Holdings: $BTC, $ETH, $XLM $COMP $CGLD $FORTH $NU $GRT $DAI $GUSD
My Current Swing Trade Positions:
My Current Options Trading Positions: APPL $140 Call 6/18, TLT $120 Put 7/16, T $30 Call 01/20/23
My Son’s Long-Term Holdings: $DKNG, $EPD, $UBER
My Daughter’s Long-Term Holdings: $ETHE, $AGNC
Miami, FL, 33169