December 4 Post
Hi Again,
Look at our scorecard! In November 2023, our portfolio increased by 15.55%! Prior to August
2023 we had gains but 8/1/23 through 10/31/23 we had a total loss of 13.18% so our November
gain more than made up for our 2023 losses. Like clockwork, in most years, we get a bear
market August through October; and we get bull rallies during the November/December period.
Since the market gains were so strong in November, we should have a correction soon.
Disney! Disney! Time to brag! For the past few months, I mentioned how all “Wall Street
experts” hated Disney and yet I believed in Bob Igor and Disney; and I kept buying Disney on
the way down. Guess what? Now it is difficult to find a “Wall Street expert” who does not love
Disney! On 11/10/23, Yahoo Finance announced, “Disney has its mojo back”! On that day
alone Disney surged by 7%. At the bottom, I purchased Disney at $80.74 on 10/27/23, and on
11/24/23, it was at $96! That is a 19% gain in 28 calendar days! Retail investors listen to the
“market experts”; and even when experts get bullish, retail investors remain pessimistic. They
tend to buy when prices are too high and end up selling at a loss. Per CNBC, 69% of retail
investors are still bearish on Disney. On 11/15/23, CNBC announced that 2 billionaire activist
investors are taking a big stake in Disney. Even if you exclude all other businesses held by
Disney, their parks alone is worth $80 per share. One of the best on Wall Street, Josh Brown,
was waiting for Disney to go down to $70 to buy in to Disney. This is why we have to keep
buying on the way down. As it is said on Wall Street, no one will ring a bell at the bottom. On
11/30/23, after hating Disney for months, Jim Cramer announced, “Disney is my favorite
stock”. Better late than never!
Disney (DIS) stock surged roughly 7% on Thursday after the company reported strong
earnings the previous day and increased its annual cost cutting goal to $7.5 billion, up from the
previous $5.5 billion set in February. Analysts praised the move with Wells Fargo's Steve
Cahall writing the company has its "mojo back" — despite the stock continuing to face multi-
year record lows and another battle with activist investor Nelson Peltz. Cahall increased his
price target to $115 a share, up from the prior $110 — citing the cost cuts, coupled with positive
free cash flow guidance. He reiterated his Overweight rating.” Disney is our #1 media idea,"
Cahall continued. "Bob Iger has been under the hood for about a year now, and the strategy is
taking shape." On the earnings call, the company said it expects free cash flow to balloon to
pre-pandemic levels of approximately $8 billion in full-year 2024, assisted by lower content
spend. Disney expects to spend $25 billion on content next year versus the $27 billion spent in
full-year 2023. Moffettnathanson said the free cash flow guide was the "single most critical
take-away" from the report. Iger said the company will be focused on "four key building
opportunities" moving forward, which will include "achieving significant and sustained
profitability in our streaming business, building ESPN into the preeminent digital sports
platform, improving the output and economics of our film studios, and turbocharging growth in
our parks and experiences business." (Alexander Canal, Yahoo Finance, 11/9/23).
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As I have been saying for the past few months, my other great find was being long on the ETF
called TLT; iShares 20+ Year Treasury Bonds. It is very difficult to see bond/ETF price
appreciation in the bond market; but we had the best bond market gains since the 1980s! As
rates/yield was going up I keep buying TLT (as bond yields go up the price level goes down);
and I bought my last purchase when the TLT hit $82.93 on 10/19/23, and on 12/1/23, TLT was
at $93- 12.9% gain in 32 days! Unlike what I saw with Disney and other stocks, most money
managers were buying in to TLT; but I got in before most of them got bullish on TLT. When
Bill Ackman was shorting TLT, I was buying TLT. When the Federal Reserve started raising
rates, I shorted TLT with put options and made some good money. This is what I call a “no
brainer”. If TLT goes below $82.93 with higher yields, I will sell what I have and buy more at a
lower price-Easier to monitor my portfolio that way. That is my market discipline. While I wait,
I get a good yield; and this is the 100% risk free instrument in the world (US Treasuries)!
Now for the defense stock RTX. A few weeks ago, all the Wall Street experts got negative on
the stock; and Jim Cramer shouted “sell, sell”. So around 10/2/23, I bought a few shares; and
my strategy was to buy as it declined more. Then came the Middle East war, and the rest is
history. On 10/2/23, RTX was at $70 and on 12/1/23, it was at $82! In just 59 days, it rose by
17%! Now Jim Cramer is shouting that RTX is well reserved for their potential losses and we
all should buy RTX! Better late than never!
Sept 14 (Reuters) - Aerospace giant RTX Corp (RTX.N) on Monday told airlines hundreds of
their Airbus jets would be grounded at any one time in coming years to check for a rare
manufacturing flaw, souring the mood in an industry that was only just experiencing some relief
from supply chain pressures. It is the latest manufacturing defect to hit planemaking this year,
after separate quality issues with another big supplier Spirit AeroSystems (SPR.N). RTX unit
Pratt and Whitney's popular Geared Turbofan (GTF) engines were designed for better fuel
efficiency and fewer emissions. The engines have become popular and now compete with the
LEAP engines produced by CFM International to power the Airbus A320neo. But concerns
over its performance have swirled in recent months after engines faced problem with durability
in hot and dusty climates, requiring more frequent maintenance. In July, RTX disclosed it had
found microscopic containments in powdered metal, used to manufacture high-pressure turbine
discs that are part of engine's core, and presence of which could lead to cracks in the engine.
RTX said at that time that 200 engines would require "accelerated inspection" with 60 days to
fix each engine with a contamination issue. However, on Monday RTX widened the scope of
inspections, to pull around 600 to 700 engines off their Airbus jets and projected repair work to
last up to 300 days per engine. (Pratyush Thakur, Reuters, 9/4/23)
On 11/14/23, CEO of J P Morgan, Jamie Dimon stated that even though inflation is going
down, we are no where close to a desired level; yet on 11/14/23, CPI going down raised the
S&P 500 index. Health insurance went down by 35% but that was due to the new way the
government is making these calculations. Mere cosmetics! Market advances to market decline:
10:1. Very impressive and proof that the market is broadening. Russel 2000 outperformed the
S&P500 by 3.5% on 11/1/4/23- and in history, that has happened only 3 times and only once
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since 1987! Since 10/27/23 (to 12/1/23), Russell 2000 rose 14% in just 31 days! I think it is
premature; and I rarely invest or trade in “small stocks”. The market is expecting the Federal
Reserve to cut rates in 2024 Q1 but Chairman Powell keeps reminding that rates will continue
to be higher for longer. Even the Regional Bank Index KRE rose by 21% within the past 31
days! I am still shorting the KRE. On 11/10/23. CNBC announced that trillions in commercial
residential real estate will become due in 2024. If interest rates do not go down, there will be
many bankruptcies.
Remember the Fibonacci Queen? Carolyn Boroden, who is renowned for her expertise in
Fibonacci price and timing analysis, Boroden joined the ElliottWaveTrader analyst team in
December 2019. She is a technical analyst and author of Fibonacci Trading, published by
McGraw-Hill in early 2008. Carolyn has been involved in the trading industry since 1978,
starting on the floor of the Chicago Mercantile Exchange. Her work is often featured on the
"Off The Charts" segment of CNBC's Mad Money with Jim Cramer. Carolyn provides analysis
of U.S. Stocks, Equity Indices, Precious Metals and Oil in her Fibonacci Markets & Stocks
service in our ElliottWaveTrader Trading Room. The specific indexes she covers are the S&P
500, Nasdaq 100 (cash/futures), Gold (GC), and Oil (CL). The specific stocks are AAPL,
AMZN, GOOGL, NVDA, and TSLA, plus over a dozen Bonus Stocks, when Carolyn sees a
setup.
On 11/28/23, Carolyn Boroden stated that the S&P500 will go even higher from the current
levels; but it will not go up in a straight line; and any correction we should see it as a buying
opportunity. Boroden also predicts that Tesla will go up to $328. On 12/1/23, Tesla closed at
$239.