Category: Stock Market

Nintendo Might Be Worth Playing (NTDOY)

Forget the hottest trends in game counsels for a second. Think long term. Will Nintendo be there? The Pokémon craze has topped out. The Nintendo Switch is selling but nothing crazy. All seems calm. For now.

What happens when the next Pokémon hits? Will it be Playstation or Xbox that builds the tech? It will probably be Nintendo. They’ve done it before, they can do it again. While Xbox and Playstation have their niche market, they never had a worldwide phenomena. Pokémon went viral. Not just media viral. Like out in real life viral.

The chart looks like we could be making a double bottom. If that’s the case, I want to place a bet now. Long-term I like this company. They have demonstrated an ability to capture the world’s attention like I haven’t seen for a video game since…the original Nintendo home system.

The classic Nintendo is making a comeback as well. Old school gamers are introducing these technological artifacts as starter to kits to the younger generation. Before Call of Duty or Madden, kids need to see what video games are. Old school Nintendo dominates the retro market, just as it dominated the main market back in the 80’s and early 90’s.

The stock has been a perennial pink sheet winner. Nintendo has managed to use the OTC market to stay listed and let investors participate with considerably less fees and oversight from traditional exchanges. If they ever did go traditional, it’s unknown what the status of the “old stock” would be. Investors will have do their own research as to Nintendo and its pink sheet status and decide if it’s worth the risks.

Look at the expected earnings growth. This chart highlights the amazing outlook. The earning per share nearly doubles in two short years. With the previous chart showing a double bottom, the long term bet should be placed now.

Nintendo might have another trick up its sleeve. There might be a few Pokémon’s left in its arsenal before its upended by a game changing revolutionary way to play video games. Some say that could be virtual reality. Nintendo could have a hand in that too.

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Freeport McMoRan Is A Buy (FCX)

If you follow these two rules, you will never have a losing trade. First? Buy low. Second? Sell high. Sounds easy, right? Well, here we are, hovering at nearly 5 year lows and after a long and bumpy ride, precious metal investors want to know, “Are we there yet?” Continue reading “Freeport McMoRan Is A Buy (FCX)”

Santa Clause Rally 2 Weeks Late.

The Santa Clause Rally came 2 weeks late (always BTFD!) According to MarketWatch, small-cap stocks, as gauged by the Russell 2000 index RUT, +1.04% , are off to their best start to any year in the past 32 years, boasting a gain of 8.8% (WOW) over the past 12 trading sessions, according to Dow Jones Market Data. That’s outpacing the large-cap S&P 500 SPX, +1.32% the U.S. stock-market benchmark, which is up 5.2% over the same stretch — a performance, however, that likewise is the strongest 12-day start to a calendar year in 32 years. You can think Central Banks and Powell being Trumps right hand man for that.

The Dow Jones Industrial Average DJIA, +1.38% is up 4.5% over the same period, while the Nasdaq Composite Index COMP, +1.03% has logged a 6.8% advance.

Is it a reason to cheer? Perhaps it would be if not for the fact that the gains are the strongest since 1987, when the Russell popped 11.87% over the first 12 trading days and the S&P rallied 11.22%. 1987 is a year that lives in infamy on Wall Street.

On Oct. 19, 1987, the Dow sank 22.6% in a single session, marking its steepest percentage drop ever. That is not at all to suggest that similar action will play out this time around but you can never be to sure.

However, a number of strategists have been warning that gains in small caps aren’t likely to be lasting. MarketWatch’s Chris Matthews writes that investors have been drawn to the relative bargains that small-cap stocks are trading at compared with their larger-cap brethren, but noted that analysts are advising caution in investing in the group (don’t listen).

Separately, MarketWatch’s Barbara Kollmeyer, citing Andrew Lapthorne, a quantitative analyst at Société Générale, warns that U.S. small caps will be in the center of the next storm for stocks because those companies tend to carry larger debt loads relative to their heftier peers and are sensitive to rising interest rates.

“U.S. small caps have been taking on a massive amount of leverage over the past few years,” particularly starting in 2013 during the [quantitative easing] years, wrote Lapthorne.

Although the Federal Reserve appears to be in pause mode, the central bank does want to eventually normalize interest-rate policy, which may add more friction for small-cap names.

Back in 2018, shares of those companies enjoyed a bounce because they were perceived as being more resilient than larger multinational companies amid trade disputes between the U.S. and its trade partners, namely China. However, after punching higher, that rally faded hard and fast as a resolution between Beijing and Washington failed to materialize.

Investors should hope that the same narrative, or an uglier one, doesn’t play out this year. If us at BTFDClub had to bet unless there is a recession buy all dips!