Hey guys how's it going it's Andy from MagooInvesting. Happy Tuesday. So this is the
second time I've tried to record this. Yesterday I had a problem with my audio and I recorded it
later in the day and there was a horrible glare across my face that I didn't even notice until I
saw the recording. So here we are again for round number 2! In today's video I wanted to talk about
the general market and how my investing strategy is going to be changing going forward. Because as
of right now, I have the most amount of cash that I've had in my portfolio since the stock market
crash back in Feb, March, and early April. I have a lot of cash sitting on the side and instead of
immediately going back into the stock market I've decided to take a little bit of a break and I'm
waiting for a couple things specifically to happen in the stock market before making any investment
decisions. So in today's video I'm going to talk about some of the news that's been surrounding
the market so far this week. Cause Monday was kind of a blood bath for the overall market.
And then I'm going to talk about the three different scenarios that I see going forward that
could potentially change my trading strategy. So I have three different options that I'm going to be
using depending on what happens with the overall market. So this is going to be a very exciting
week and before getting started I do have to say that I'm not a licensed financial adviser and this
is not financial advice. Anything you hear in this video is just my me giving my own opinions
on the stock market and you need to do your own research before making any investment decisions.
Also if you've been enjoying these videos I'd really appreciate it if you hit the like and
subscribe button as it would help my channel out a lot. Also let me know in the comment section down
below as you feeling bullish, bearish, or are you just holding at this point. And I'm very curious
to see what you guys' sentiment is to the overall market is right now. So with that
out of the way let's talk about the news that's been happening in the market so far this week.
So as I mentioned, Monday was kind of a bloodbath. When I first started trying to record yesterday,
all 30 of the Dow 30 stocks were down and there was a variety of different reasons why. Some of
the major things China put sanctions after a 1.8 billion dollar arms sale to Taiwan and
they put sanctions of Boeing Stock (BA Stock), Raytheon Stock (RTN Stock) and
Lockheed Martin Stock (LMT Stock). And so these are some of the major industrial stocks
and that was one of the big reasons why the Dow Jones was down significantly. Also you had
some problems with SAP stock which is a European software company. They gave a pretty grim outlook
talking about how a lot of the software companies are actually starting to see some of the problems
with the pandemic and their revenue is expected to fall going forward. As a result, SAP Stock was
down 25%. We also had a resurgence in virus cases that was spooking the market. You have a
resurgence in Europe, you have still problems with surges in the US. Which is now been affecting more
rural areas. But most of the places that had it kinda under control for the past couple of months
it's starting to come back in full force. Except for in New Zealand and Australia.
Stocks had pretty big losses on Monday. The fear index which is a VIX is a way to determine how
big of an expected move the overall market is going to have based off of options. And that
fear index hit highs that we haven't seen since early September and now with today's move up it's
now at levels that we haven't seen since June. So there's a lot of fear in the market right now.
One of the best ways to take advantage of that is how I made a lot of money in my portfolio
for the past couple of months. It's by selling options. As the fear index, that usually means
that the volatility and the prices that people are willing to pay for these options increases.
And how do you take advantage of high prices? You sell options. Normally when the fear index or the
VIX goes up , I like to sell options. But at this point I'm trying to tone things back a little bit.
When Monday started before the market fell, my portfolio was up at 50%
profit so far in 2020. So at this point going into the final two months of the year,
I kind of wanted to slow down and I'm potentially changing my investment strategy.
If you've been on the channel for a the past couple of months, I have mainly gone from early
in the summer I was looking at growth stocks stuff that was going to bounce back from the
pandemic. A lof of the tech stocks that's why I've been in Sonos Stock (SONO Stock) and
Zynga Stock (ZNGA Stock). And then in the past couple of weeks and months I've been looking at
some recovery stocks. Stuff that's going to do well if the market and economy opens up
fully. That's why I've gotten into things like Southwest Stock (LUV Stock) and Planet Fitness
Stock (PLNT Stock). Going forward, I'm watching a couple things this week to determine if I'm
going to stay on course of buying the recovery stocks or if I'm going to switch things up and
go to potentially blue chip stocks to protect my portfolio going into the Winter. So some of
the things that I'm watching, this week is a very important week when it comes to earnings. We have
a lot of major players. Today after the bell we have Microsoft Stock (MSFT Stock). Tomorrow we
have the payment companies in Visa stock (V Stock) and Mastercard stock (MA Stock). And then Thursday
is a big tech day. So we have stuff like Amazon stock (AMZN Stock) , apple stock (AAPL Stock),
google stock (GOOGL Stock) , facebook stock (FB Stock). And a lot of other stuff. This is
a huge earnings week. And if you remember back in the summer I pinpointed an earnings period
with all of the tech stocks to determine where I was going to be going with the overall market.
If things went well I was going to stay on the same course. And if things went bad, I was going
to pull back a little bit and go heavy into cash. Things went well but so far this earnings season
we've seen a mixed of reports. We had grim outlook from SAP Stock, Netflix Stock (NFLX Stock) missed
on their earnings last week. But then we did have positives with Snapchat Stock (SNAP Stock) who
beat expectations across the board. And gave a major boost to a lot of the social media
stocks which was what I talked about pretty much exclusively last week. So at this point I don't
really want to take any positions until I see what happens with that. And it seems like a lot of
people in the market are kind of feeling the same way. Monday as I mentioned was very tough for the
stock market. Having the worst day of October by a pretty significant margin. As I mentioned all 30
of the Dow 30 stocks were in the red for most of the day. Then we did have a power hour towards the
end of the day where a couple stocks went barely into the green. But compared to the major moves
that we've seen so far in 2020, not really that big of a deal. The fear index is up but the market
movement hasn't been as crazy as what we've seen . When I put up this graphic from the major moves
of 2020, it's not that scary. Going forward I have 3 scenarios that I'm watching to determine how I'm
going to be trading this going forward. So as I mentioned I'm in a lot of cash and I'm going to be
making a portfolio video towards the end of the of the week because we are getting close to November.
But the three scenarios I'm looking at. The first one has to do with Virus cases. I think it would
be very naïve to not look at cases to determine how your trading strategy should evolve over time.
If things start to improve in the next couple of weeks, I'm going to keep the same course.
I think the reopening stocks are the best deals out there because they are one of the only types
of stocks that you can buy at a discount which has always been my trading philosophy. You buy stocks
after bad earnings reports or after being able to get it at a significant discount. And that's
why I bought Southwest Stock (LUV Stock) and Planet Fitness stock (PLNT Stock) in the past.
So if things start to get better with the virus in the next couple of weeks, I'll probably stay
the same course and buy those reopening stocks. The number 2 scenario is that things get worse
and then going into earnings this week Apple stock (AAPL Stock) misses on their earnings report.
The reason why I'm looking at Apple stock (AAPL Stock) specifically is that I'm looking for
overall stability in my portfolio. And being able to buy a blue chip,
I think apple stock is one of the stocks that Jim Cramer always talks about it on his show
that Apple stock (AAPL Stock) is one of the companies that you should own and not trade.
And I've kind of missed out on some opportunities to buy into Apple stock (AAPL Stock) in the past
couple months. And if it misses on its earnings report I think some of the high expectations gives
a high likelihood of missing. So if that does happen, I'm going to use some of that cash that
I have sitting on the side to buy into apple stock (AAPL Stock). To kind of stabilize my portfolio in
a safer way going into the end of the year. And then number 3, is that virus cases get worse,
apple beats expectations and increases in price, and then I'm going to be very patient. I probably
won't be buying anything for the month of November at that point. Just because I want to see what's
going to happen overall. But now I'm going to be looking at the more stable blue chip companies
that still have a decent amount of upside. So the two companies that I'm looking at for that
would be Disney stock (DIS Stock) and Pepsi Stock (PEP Stock). You might be wondering
why Disney stock (DIS Stock) if you said you wanted to stay away from reopening stocks.
Disney stock (DIS Stock) is one of these companies that no matter how bad the virus goes and how long
we have lockdowns for, they're still going to be making a decent amount of money. They have
so many different fingers of their business that have been doing well. We've seen positive numbers
with their streaming. ESPN has been one of their parts of their business that I don't like about
Disney Stock (DIS Stock), but it has been bringing in a decent amount of revenue now that sports have
come back. So they have plenty of different ways to make money even though theme parks and
the cruises are not open. But being able to buy in a discounted price is something that I would
happily do. I want to buy more blue chips. When we get to my portfolio video this week,
I have very little in the blue chip stocks and I have a lot of overall risk considering how large
of position I have with Sonos stock (SONO Stock) with a growth tech stock.
And then if not, I'm going to be looking at Pepsi Stock (PEP Stock). Not only do I
think that it's a great dividend stock, I think it's one of these companies that has
diversified their different holdings over the past couple of years and has stabilized
a lot of the dangers involved with buying a company like this. When you look at Coca
Cola Stock (KO Stock), Coca Coca Stock has had a really tough time because they rely heavily
on a lot of the places that have been shutdown completely during this. Places like sporting
events, movie theatres, restaurants . And Pepsi stock (PEP Stock) has bought a bunch of different
products in the past couple of years that has made it so they've been able to keep their bottom line
looking really stable during this. They've bought some juice companies, they bought Quaker oaks,
they have a bunch of different stuff that's sold at a grocery store so they're not as reliant
on the reopening process as something like a coca cola stock (KO Stock). So
Pepsi Stock (PEP Stock) is one of my favorites. And that's the three scenarios I'm looking at.
I think it's very important to be pretty flexible with your trading strategy because
with how crazy are. I think you need to be able to change at a moments notice. I have a lot of
cash in my portfolio and depending on how Sonos Stock (SONO Stock) reacts by the end of the month,
I could be back in 75% cash. So I have a lot of different opportunities and I'm going to take
things slow. I think that the next couple weeks, this week specifically and going into the election
is going to bring a lot of noise to the overall market. And I'm going to be patient and see how
this week ends up. And then decide what I'm going to do from. I'm very curious to hear how you guys
are going to play this going forward. And let me know in the comment section down below if
you're thinking about buying, selling, or holding at this point because depending on
where you look there's a lot of great deals out there. We've had some major misses from a lot of
these companies like Netflix stock, SAP Stock, even Intel stock had some really bad earnings.
And so you have a lot of opportunities but you also have a lot of fear coming into the market.
So I'm very curious to see what you guys have to say about that in the comment section down below.
Thanks for watching, I appreciate all the support. And I'll be back for the rest of the week
talking about back going back to the normal type of video where I'll be comparing a
couple different companies. I just wanted to talk about the news and why my trading
strategy is going to be changing going forward. Thanks for watching and I'll see you tomorrow!