Current Events -- The Market -- Not Ready For Prime Time -- October 4, 2021

Much of the following was in a "private" note sent to another reader a few minutes ago. It is simply some ramblings, some trolling, and some "playing devil's advocate." Some is "tongue in cheek."

I could not possibly be in a better mood. This is an incredible market for someone like me who has two portfolios: one portfolio managed by experts of which I have absolutely no control. That portfolio includes my pension and my retirement accounts. The second portfolio is those individual equities I "manage" by myself. The mix is probably about 90 - 10: 90% of my estate is professionally managed or out of my control; 10% is all my responsibility.

The "10-percent-portfolio is very, very overweighted in oil. You can see why I couldn't possibly be in a better mood today. WTI is surging. My hunch: the excitement in oil and natural gas is not going to end overnight. 

The only "FANG" stock that affects my "10-percent-portfolio" is AAPL.And right now AAPL, as a stock, is in serious trouble. More on that later.

Meanwhile, the "90-percent-portfolio" has a lot of technology. Technology got way ahead of itself and what's going on today represents a great buying opportunity. And smarter folks than I will be doing that.

Now back to AAPL: I haven't read / heard why AAPL is falling so much today. There are three possibilities:

• simply got caught up with all the other technology companies; says nothing about underlying value of Apple, Inc; or,
• Apple is going to have major supply chain problems short term and their best quarter -- the October-December quarter is going to be horrendous; or,
• Beijing is about ready to "Hong-Kong" Taiwan.

I don't care what the reason is. Whatever the reason is, it means a buying opportunity for those interested.

The fact that there are no stories specific to AAPL yet today, suggests most talking heads would simply attribute this to "reason #1" -- simply getting caught up with all the other technology companies. What's Cathie Wood's ARRK doing. Before I look, here's how I see ARRK:

• under $120: accumulate
• under $118: back up the truck, as Jim Cramer would say
• under $115: will never happen.

So, what's ARKK doing? Today, ARKK is down 3.6%; down $4.00; now trading at $107. LOL. My hunch: ARKK is going to be a lot higher than $125 a year from now.

Be greedy when others are fearful. Me? I will watch this very, very closely.

A digression: Beijing is about read to "Hong-Kong" Taiwan.

I don't care. 

As far as I'm concerned, this would be a good thing. It's sort of like Afghanistan. Everyone knows "it's" going to happen; it's just a matter of when and how.

The analogy: We all knew that once the decision was made to leave Afghanistan, Taliban would take over. Even the Pentagon said that, but thought it would take up to a year, rather than a week, as it did in Afghanistan.

Taiwan? It's just a matter of time: when and how. 

A lot of fake news. This "show of force" occurs every anniversary of independence, so it probably means nothing but yet the press suggests this is something new. But let's say it means something. What would be the next step for Beijing if it plans to "Hong-Kong" Taiwan?

That's simple.

The other day, I think I read that about 92 fighters flew over Taiwanese airspace. Today it was 52 aircraft. Big deal. They do this every year.

Link here. 

But what could Beijing do that would be different but short of dropping bombs or firing missiles? Land their jets on Taiwan air strips, do a 180° turn on the ground, and then take off again. And then wait to see what Taiwan or Resident Biden would do.

Spoiler alert: nothing.

So, the "Hong-Konging" of Taiwan could have occurred under the previous administration resulting in a lot of bellicose tweets, or it could happen under the present US administration with maybe a speech of some sort from Resident Biden. But as far as I'm concerned, I have no dog in that fight.

A lot of Taiwan manufacturing would move elsewhere, and a lot of it might move to Texas. Isn't TSMC building a huge plant here in Texas?

Break, break.

FANG vs oil and gas.

Quick: which pays better dividends.

Hint: it's not FANG. 

For a retiree -- with little free cash flow --  who likes to invest, dividends are nice. Oil and natural gas companies are going to be really be increasing their dividends (and share buybacks) this year. 

Break, break. 

Wow, I had a great four-day weekend. 

My destination was 688 miles away, where I would meet other extended family members. 

I rented a car from Enterprise -- the only folks from whom I rent vehicles -- and drove straight through, leaving at 12:20 p.m. on Thursday afternoon and arriving at 10:30 p.m. that same late evening. I stopped once to fill up with gasoline and a quick bathroom break. Much of the trip was 80-mph on the interstate.

All day Friday, Saturday and half of Sunday with extended family.

On the way home I took a fairly big detour and visited Shiloh Battleground / National Cemetery. That site was never on my bucket list (we've talked about bucket lists before) but I was so close, I couldn't pass up the opportunity. 

Shiloh would have little interest for most folks under the age of seventy. But, if you are seventy years or older and have any interest in US history, Shiloh is a "must-visit"if you are in the area (within a two-hour drive).

Interestingly enough, there are very few "touristy" spots in the immediate area suggesting that "no-one" visits this historical site. I would like to take a lawn chair and sit on the grounds for two full days, staying at a local bed-and-breakfast overnight. Do nothing but sit in the lawn chair, read, think, meditate. 

By the way, while on my four-day cross-country trip I met a "Susan" from Henderson, Nevada, who was fifty-eight years old. How do I know? She said she had her son, her only child, at age forty, and later in the conversation it came up that he was too young to gamble in Las Vegas. He is eighteen. So that made her fifty-eight. It turns out one of her favorite "things to do" when traveling is to take guided tours (or, if not available, self-guided tours of cemeteries). After seeing Shiloh, I understand why.

Traffic was so heavy on the interstate(s) -- I tried to avoid the interstate on the way home -- I wondered what traffic will be like when "we" are "back to normal." LOL. Perhaps we need five years of "lock down" -- we've discussed this before.

It was refreshing to see, this past weekend, that a whole region in the US had essentially taken the same approach Sweden took with regard to the pandemic. Interestingly, while the rest of the US experienced two or three surges (the delta variant being the third or fourth surge for most of the US), this area of the country is now experiencing its first surge. And this "first" surge is already dissipating. And it was a serious surge -- and interestingly, no one talked about Covid, and I don't even think I heard it mentioned on the evening local news. If a tree falls in the forest and no one is there to hear it, does it make a sound?

I departed Shiloh at 5:00 p.m. and headed home: some 700 miles back. I drove straight through, all night, arriving home exactly at 7:00 a.m., just in time to meet Sophia at the bus stop and seeing her off to school.

Break, break.

Hey, "pat on the back." Some time ago, I compared three independents in the Permian. I clearly showed that of the three why Devon was my favorite.

Today on CNBC it was singled out, noting that it was up 147% -- or something like that -- over one year.

Devon is one of several companies in which I "park" money, selling shares in DVN when I see better opportunities, unlike something like SRE and UNP which I only accumulate, never sell. SRE is struggling right now -- the California concern -- but UNP is doing nicely on a day the rest of the market is falling, with the exception of oil and natural gas.

Will stop for now.

In progress. 

The opening scene for season one, episode three, "Earth Day," Nine Perfect Strangers opened with this soundtrack:

Link here.