Despite today’s CPI inflation bounce and the continuation (flagging but still in business) of July’s Bear Market rally, my goal is still to sell into rallies. I don’t think this Bear Market is over and done with. I see another down leg when investors and traders admit that the Federal Reserve isn’t going to be able to get inflation under control with just another 100 basis points of interest rate increases (and, the other part of this hopeful scenario, to begin cutting interest rates by the middle of 2023.)
So I’ll be making three sells today out of my Jubak Picks Portfolio to take advantage of the CPI bounce.
I’m selling Delta Air Lines (DAL) out of my Jubak Picks Portfolio with a 13.56% loss since I added the position on January 31, 2022. Airlines have not been able to put together the post-Pandemic surge in revenue that I was looking for when I made this buy. Problems have ranged from a lack of crew (so lots of canceled flights) to rising costs. The shares are up 3.13% today as of 2:30 p.m. New York time
I’m selling Advanced Micro Devices (AMD) out of my Jubak Picks Portfolio with a 33.38% loss since my November 15, 2022 pick. (The timing couldn’t have been much worse. I managed to catch the peak of the technology market with this buy.) It looks like we’re headed into a period of extended weakness of sales for chips for PCs and I’m worried that this weakness might extend to the server market. I like–I mean “really, really like”–Advance Micro Devices in the longer run. The company is taking market share from Intel (INTC) in PC and server chips. And breathing down the neck of Nvidia (NVDA) in the market for graphics CPUs. The product pipeline at Advanced Micro Devices is deeply impressive and I’ll be looking to re-buy this stock at a lower price when the recession in the chip sector has played out. (So sometime in 2023, I’d guess.) The shares are up 3.02% today as of 2:30 p.m. New York time
And, finally, I’ll be selling Martin Marietta Materials (MLM) out of my Jubak Picks Portfolio with a gain of 1.62% since I added it to this portfolio on June 28, 2021. The premise of this pick was that Martin Marietta Materials, a producer of construction aggregates, would see growth in revenue from spending to mitigate the effects of climate change. With the recession looming (and so many state governments deciding, perversely, in my opinion, to devote temporary budget surpluses to tax cuts rather than infrastructure spending) I’m going to take this bet off the table. I still own Vulcan Materials (VMC) in this portfolio on this theme and I think that the company is better positioned, geographically, for that increase in spending when it comes. The stock is up 3.07% today as of 2:30 New York time.
