Toxically Crispy Is Not Value. What Is?

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“Somebody’s been hunting for cheap again. I think I see it, way way down there.”

JANUARY 9, 2019. Radiation doesn’t really glow in the dark. But real value does. Beat the weeds if you will. But the good stuff lives in the light.

We live in macro times. The equity train has been hijacked by politics and global economics. Nothing new here. In the midst of this macro beat-down even the best and brightest have been beaten bloody. Now’s your chance–and ours also.

It’s bargain-hunting time–really. But what’s a bargain look like now?
“Value” does not roll off an assembly line with an orange sticker. Value is created, and bargains don’t flow in only one direction. The buyer’s forced to give something up too. But what? Weak fundamentals, technicals, or the stark fear of the unknowable? Pick your poison, because you don’t get out the door carrying value, without also taking a does of something ugly. STOCKjAW points at which ugly to pick.

HAZMAT:

n., abbreviation or acronym, for “hazardous materials,” or substances injurious to life and the environment; toxic, flammable, explosive, poisonous, radioactive; examples: ChemLawn, shelf-stable cooking oils, fentanyl, Cheez Whiz, Easy Off Oven Cleaner; any highly specialized protective suit, truck, or trained team, specifically designed or intended to deal with said materials.

So

 you say you want value?  Value investing.  What precisely are you talking about–and what are you willing to sacrifice?  Value means bargain and bargains are never free.  If you need a respirator to examine the sale rack it’s not a bargain.  “Bargain” signs mean trouble, of some sort.  Why else would true sales exist?  Think iPhones.  Ever seen a sale on those?

 

 

Value means picking your poison.  Towering bargains rarely occur  in roaring markets.  Hint One.  Real bargains are stocks you’d want to own anytime.

 

  When macros take over our equity market, fundamentals assume the way back.  O.K.  All become victims, yet all victims are not equal.  Take Apple.  Does AAPL suck 30% more now?  The market is not a value blanket stretched flat.  It’s a mountain range in constant vertical motion.  Apple is 30% shorter but no less of a company.  Same same Amazon–the best company on the planet.

 

 

 

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Amazon’s home. Pike Street Market overlooking Elliot Bay at dusk. Seattle.

 

Bargains are created amid ugliness and ugliness is part of the bargain.  Hot dogs are ugly on the micro level, and delicious with mustard.  You wanna ruin that?  Talk to a vegan.

 

Vegans and do-gooders do not invest.  Nor do they bargain hunt.  Ask Whole Foods–oops, we mean Amazon, the best company on the planet.  So now you’re talking trash?  So you say you like DWDP?  You wouldn’t if you forked through their dumpster.  Buy a HAZMAT suit first.  Vegan investor.  Only strong stomachs invest.  If you can’t eat a spider, don’t invest.

 

 

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Some say “slower is the new normal.” What lies ahead is only partially visible. Yet buying well always provides the best chance to prosper. But buying well requires stepping outside of the comfort zone. Eat that deep-fired tarantula now. It’s just protein and nerves yo. Hesitation only means a higher price.

 

 

Value always appears with some form of funk.  Fugly now means macros-gone-spring break-wild, thus tortured technicals for all, and fundamentals tossed into super economy class.  Perfect.  When macro ugliness fades, technicals will heal, if fundamentals are strong.

 

Technicals track investor sentiment.  Technicals provide no leading indication when macros are at the wheel.  Technicals simply track the nasty work from above, in times like this.  Company fundamentals will again determine a company’s fate.  True value requires strong or strengthening fundamentals.  In the absence of that you’re simply buying a broken company. 

 

When buying value, buy companies with strong fundamentals.  Bad technicals can heal.  But not fundamental wrecks, or not nearly so quickly, or easily.   Broken fundamentals means a broken company, and a broken stock, one looking very much the same as a real “value.”

 

 

     Now

 is the time for all true bargain hunters to thrive–really.  We all get paid when we buy well.  Selling is the easy part.  If you can’t eat a deep-fried tarantula don’t tour Thailand, and don’t think value without bringing a bucket of guts.  Value means guts, the willingness to move intelligently while the rest press face-down in the dirt.  You’ll get paid for that.

 

Thanks for reading.

AAA Stockjaw scooter

STOCKJAW.COM

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https://pixabay.com/en/photos/
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Additional resources:

Investopedia.com.  Seriously Wonderful.  Fact.
http://www.investopedia.com/
Charles Schwab.  In Our Opinion, the best broker going.
https://www.schwab.com/public/schwab/client_home
STOCKJAW.COM EARNESTLY THANKS YOU FOR YOUR INTEREST AND WISHES YOU THE VERY BEST.  THE WORLD BEING WHAT IT IS, WE MUST POST THE FOLLOWING:  ALL CONTENT ON STOCKJAW.COM IS PURELY FOR GENERAL EDUCATIONAL AND ENTERTAINMENT PURPOSES ALONE.  ANY ACTION TAKEN BY ANY READER IS THE SOLE CHOICE AND RESPONSIBILITY OF SAID ACTOR.
Be careful.  Do the work.  Have patience, with yourself.  Never put your dreams away.
STOCKjAW

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