Hello! I am back with the latest edition of the MSI weekly newsletter.
The week that was:
On Tuesday, the Fed announced an interest rate hike by 0.25%. They have also announced their overall plan for the year, and there will be at least 7 interest rate hikes this year. After the meeting, the market spiked up. Until then, there was a lot of uncertainty in the market about the interest rate hikes. Imagine if you give a tough math test, and you are waiting for the results. You are probably nervous, and you just cannot relax until the results are out. It is a big relief when the score comes out. When the market finally got the results of the Fed meeting, there was the same feeling of relief, so it went up.
Despite the market rally, the other problems have not been solved yet. There is still inflation, and the war is still going on, and oil prices continue to rise. Besides, the fact that there will be 7+ rate hikes is not good for the market. It was thought that there would be 5 rate hikes this year, but now there are at least 7. It has probably been a long time since the Fed has announced good news.
This could just be a bear market rally that is temporary. During a bear market rally, there is hope that the market is recovering and changing its trajectory. When investors miss an opportunity to invest in a stock and there is a bear rally, they might get FOMO (Fear Of Missing Out). If they get FOMO, they would start chasing after a stock. Eventually, the rally might pass, and the market will probably go back to its trend of lower highs and lower lows.
Rather than getting FOMO and chasing after stocks, I am waiting for opportunities for good deals.
Bought 1 WDFC at $188.75
I started a new position in WD-40 Company this week. They make lubricants and rust removal products. Do you have a door in your house that creaks all the time? It is so annoying right? Well, just spray a bit of WD-40 on the hinges, and that sound is gone. They make essential products, no competition, and their products will still be needed in a recession. In fact, overall, WDFC has even out performed Google! In 2020, the stock had a Covid spike, because everyone was staying at home and focusing on house maintenance. But, the stock price is going down now because of reopening and rising oil prices. I started a small position in WDFC and will add to it.
What I am watching out next week:
Nike's quarterly results are due. NKE has been under performing recently. It will be interesting to see the results due to inflation and political issues in China. Nike is one of the best stocks to own, so I am watching out for any buying opportunities.
I am starting a new section in which I will list interesting articles I have read this week.
Disney legendary ex-CEO and current CEO are not on talking terms
Thank you for reading my newsletter. Happy investing!