Markets are in the red, tech’s leading on the downside. Apple Inc. AAPL +1.21% itself has now pulled back some 6% from its all-time highs, which were set just last week. As a subscriber wrote on the Subscriber Chat last night:
“I think the last couple of days have been just a great illustration of what we have been learning here. Trim on high euphoria and feel a bit of relief on the lows, when we can buy back at sale prices.”
It’s starting to feel like it could get ugly again for the short term. Path of least resistance is probably lower for now.
Let’s run through some must-reads for today.
An Electric-Car Maker Struggles as Production Lags — Here’s another welfare company that’s dependent upon taxpayer largesse to survive. These guys at Tesla Motors Inc. took $500 million of our money and spent it building wildly expensive cars that are sold to rich people, who then get another $5,000 per vehicle in welfare checks from the government for being rich enough to spend that kind of money on a wildly cool electric car. I plan to get short TSLA TSLA +0.21% sooner rather than later.
Everything You Need to Know About Investing — In my brand-new book available in digital and paperback, I’ve tried to cover every topic in a way that will be helpful for the average Joe, but I guarantee that every investor and trader, no matter how experienced and successful, will find a lot of gems in here too. We’ve presented the information in a Q&A format that I hope makes the content accessible and enjoyable. There’s also a glossary of key terms, concepts and phrases and a helpful bibliography of suggested further reading for those who want to dig deeper. You can never be too educated when it comes to your money.
Violence Erupts as Greeks Strike Over Austerity — Just as the Greece/Spain/EU crisis headlines moved off the front pages this week, they flare up again, this time with ugliness. As I’ve said over and over for the last three years now, you want to buy when the markets are panicked about the EU crisis and sell when the mainstream media has moved on from the story. Looks like that playbook is still in effect, and as I’ve been saying the last couple weeks, I’ve been a net seller. So is now the time to be panicking over Greece? Better now than when the markets are at their lows and the EU-crisis panics dominate the discussion, no?
More Earnings Warnings Starting to Surface — The Caterpillar Inc. CAT +0.62% warning worries me the most, but the magnitude of the size of its reduction in estimates isn’t horrible. The corporate economy continues to expand apace, even as Main Street’s economy continues to deteriorate, as I’ve been saying.
Indicator Update: A Bottom in Confidence? — Jeff’s writings are chock full of information and interesting analysis.
Sprint Primed for Takeovers After Stock Jumps — I’ve seen several analyst notes this morning with a similar theme about Sprint Nextel Corp. S -2.90% about to engage in an M&A move or two. I’d be more of a seller than a buyer of Sprint above $5.
Exactly Whose Money Did the London Whale Lose? and Libor Gives Prosecutors Chance to Change Banking Culture — I’m up on some JPM puts that I bought last week, but I’m down on the smaller short common position that I initiated a few weeks ago. I’m getting close to giving up all hope that the Republican/Democrat regime will ever do anything to enforce the law against any of these too-big-too-fail banks, especially J.P. Morgan Chase & Co. JPM +2.22%
U.S. Distrust in Media Hits New High — I can’t remember the last time I watched any news on television for more than a couple minutes at a time before I got angry at the propaganda that immediately starts spewing out.
K12 Stories Have Nationwide Impact — Put this one, K12 Inc. LRN +1.98% on your potential short idea list. These guys are the classic Revolution Investing short idea, in that they’re wholly dependent upon taxpayer money to fund their business model. Not a sustainable business, but the question is when to get into it. Probably too early to fight the Republican/Democrat love of charter schools/privatization of public goods.
The Dirty Dozen: 12 Stocks with Broken Business Models — In-depth research from yours truly on 12 stocks I’ve found that, like the two above, have fundamentally broken business models.
Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com. At time of publication, Cody was net short net short J.P. Morgan Chase and Pearson. Follow Cody on Twitter at twitter.com/codywillard. Cody’s No. 1 best-selling Amazon book, “Everything You Need to Know About Investing,” is available in digital and in paperback.