Hi There Again,

Historic trends matter. Most of the time, the market peaks in August. Usually,

September is the worst month for the market. It will be interesting to see if history

will repeat itself. If there is a significant correction in the market, it will be a buying

opportunity. Whether one makes money in the market or not depends on one’s

discipline. Once again people have gone back to their old system of “buying high

and selling higher”. That is a dangerous strategy. If a good stock (i.e. Apple,

Microsoft. Meta, Tesla, AMD, Nividia) drops by about 50%, then I consider that to

be a good buying opportunity. I bought some of them a few months ago and some

have doubled or tripled within a short period of time. The probability of those going

down to the level I purchased them is very low. I hope they will go even lower so I

can buy more. I rarely purchase more at higher prices and increase my average cost.

I always keep 50% in cash. It is never about maximizing returns but making healthy

gains on your investments/trades.

On 8/2/23, on CNBC, market timer, Larry Willams stated that he expects the

market to go down till mid-October and then rally till 2025. The Dow went up 13

days in a row, and everyone expected it to close higher for another day and break a

120-year-old record streak for the Dow but that did not happen as it went down on

7/27/23.

Last month I gave my analysis on Disney;;and I stated that it has not gone below

$85 in about 14 years. Since I wrote that, during the month of July 2023, twice

Disney hit $85 and bounced back from $85 without going any lower. Right now

Disney is a good buy but it could take years to go much higher but we cannot afford

to wait as we have to buy before the “big money” moves in and take Disney to new

highs. That is how we can make money in the market. Peter Lynch, market guru of

the 1980s, used to tell people to find turnaround stories in the market and buy

before “big money” moves in. I bought Meta/Facebook about 6 months ago when

all the market gurus were negative on the company and now, I have a gain over

200%. If I waited till Meta announced their restructuring changes, it would have

been too late to make money off Meta. In other words, I bet on Mark Zuckerburg

and not on Wall Street pundits. In the same way, with Disney, I am getting on Bob

Igor, the CEO who came back, rather than the Wall Street Gurus.

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In the past, I also talked about Intel. Intel has been dead in the water for years but I

thought that it was close to a bottom. All semiconductors are not equal but Intel

produces about 70% of all chips. AMD, Nividia, TSM are all better and I have

made money on all that but there is a lot of money to made in “turn around” stories

(per Peter Lynch). A few months ago I stated that I started buying Intel and I was

shocked that even Intel call options expiring in December 2025 were so cheaply

priced; which meant that most people were bearish on Intel. Not only did I buy

some Intel stock, I also bought some call options expiring in 2025. I made a 20%

profit on my options and sold them prematurely. If I kept them for a few more days,

when they had their Wall Street call, I would have made a 300% profit (a few

weeks after my initial purchase).

Now the yield curve in the bond market is becoming steeper again. That is

dangerous for the economy and the market. It is normal to see big shifts in the stock

market but that is not so for the bond market. When that happens in the bond

market, we have to pay attention. Are there opportunities? When the Feds were

increasing rates, I made good money shorting the 20 year Treasury through the

ETF, TLT. However, I should have started that years ago. In other wors, I was late

to the party. Then a couple of months ago, I liquidated my “bond shorts’ (TLT puts)

prematurely! Just like what happened with the Intel call options! Take a look at the

TLT chart for the past 12 months. Very interesting! Since 1/8/23, 3 times. It reached

108 and fell! Talk about a triple top! These all show that it is headed lower-lower

long-term bond prices and higher yields! Last week Bill Ackman said that he is now

shorting long term bonds. Maybe he is saying that to attract new investors so he can

sell his positions. In 2020 when the Corona virus crisis took place, he put in about

$70MM in to credit swaps and in 6 months, turned in to $1Billion+! Very clever

investor/trader! I started buying in to the TLT ETF. The option premiums are too

expensive so the risk is not worth taking buying options. If TLT go down further, I

will buy more. From 7/19/23 to 8/3/23, TLT fell from $103 to $94!! This is truly

amazing! That kind of move is very rare in the bond market. Unlike a stock, as it

goes down the yield will continue to go up. Win-Win. On 5/1/2020, TLT was at

$168!! Let us consider this scenario; let us assume the Feds keep raising rates and

the TLT falls to $70 and then due to a severe recession, the Feds lower rates to zero

and TLT shoots upwards to $170! It need not happen in that manner to make money

off the ETF, TLT (ETF for 20year Treasuries). One of the best technicians, Carley

Garner, stated on CNBC on 8/3/23, that Treasuries are bottoming. I bought my TLT

shares 6 hours before I heard her comments.

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Have a great month!