🧑‍🚀 Moon Missions from GME (+179%) and AMC (+135%)

and addressing Apple's cash flow...

Author

Austin & Robert from Rich Habits
May 16, 2024

Together with Suriance

Good morning,

A quick breakdown — in case you just don’t have the time.

  1. ⭐ Meme stocks stole the show this week.

  2. ⭐ CNBC Contributor Katie Stockton talks technical analysis.

  3. ⭐ YouTube becomes the #2 company in total TV time spent.

  4. ⭐ Apple’s $110B share buyback plan — visualized.

  5. ⭐ OpenAI reveals the next evolution of its products.

  6. ⭐ Seeking Alpha helps you optimize your portfolio.

Market Overview

As of market close 05/15/24

Chart of the Week

In a matter of 2 days — GameStop (GME) rose +179% and AMC Entertainment (AMC) rose +135% this week. The gains have begun to fade — but it’s still astonishing considering these two companies don’t have great fundamentals.

The craze was caused by “Roaring Kitty” — the leader of the GameStop frenzy when all of this happened three years ago. He began posting memes on Twitter this week and the meme stock army returned.

If you participated in these moves and made money — congrats! We encourage all readers and listeners to remember that playing these stocks is straight up gambling. That’s the reason why we don’t personally participate.

However, it’s of course fun to see that retail investors can still make this type of noise in the markets. GME and AMC were two of the most heavily shorted stocks at the beginning of the week.

“It looks like retail investors are becoming more bullish again and willing to take on more risk… There is no fundamental reason for the move as such - GME’s last earnings report was abysmal.”

— Neil Wilson, Chief Market Analyst at Finalto

Together with Suriance

When families were asked “If a spouse died, how long would it be before you face financial hardship?” … nearly 33% said they’d be in financial distress IMMEDIATELY.

Another 44% said they’d be “financially drained within 6-months.”

Our podcast is dedicated to sharing tips and strategies for building wealth — but have you ever thought about the strategies needed to KEEP your wealth in times of tragedy?

We’re thrilled to announce our partnership with Suriance — a Nashville-based insurance provider that will always keep your long-term financial goals front of mind.

In Case You Missed It…

👉 Episode 64: How to Hedge Your Portfolio (TACK) w/ Katie Stockton

In this week’s episode of the Rich Habits podcast (linked here) — we touched on the following with CNBC Contributor Katie Stockton:

  1. The Relevance of Technical Analysis (TA) — If you’re like us, you’ve probably asked yourself “Is technical analysis real?” The simple answer is technical analysis is the study of price trends over time. Technical analysis provides risk management tools that can help you assess overbought / oversold conditions, moving averages, and trends in the market. We’re not experts — but Katie certainly is!

  2. Long-Term Investor Mentality — Becoming overly confident in technical analysis can trick investors into thinking they can tell the future or that they’ve become expert traders. Katie made it clear that technical analysis is a great complementary skillset for long-term investors to learn — not just quick traders.

  3. Consider Market Psychology — While technical analysis done properly is insightful, Katie was clear that also having an understanding of the broader market sentiment is important. Despite an investor may liking or disliking a chart, it’s always important to consider external factors before making an investment decision for the long-term.

👉 Q&A: $100K / Year in Passive Income, QQQM vs. QQQ, and House-Hacking in Your 20s

During the Q&A episode that was posted this morning, we answered questions from Parker, Chris, JD, MJ, Francis, and Emma!

Reply to this email with your questions so that we can answer them in next week’s edition of the show.

👉 Public — FREE Options Trading Webinar

We’ve got another free webinar coming your way! This time it’s with the Head of Product at Public. We’ll be discussing options strategies — including long calls & puts, call & put debit spreads, and everything in between!

If that sounded like a foreign language to you — that means you need to join us.

Robert’s Callout

Whenever you hear about the ‘ratings’ of a TV network or show — it’s probably coming from Nielsen. They are the global leader in audience measurement, data, and analytics.

Some of their most recent research showed that YouTube has become the #2 company in America for total TV time spent. If you said a decade ago that this was possible — you would have sounded completely insane!

YouTube generated an incredible $8.1B of advertising revenue for Google in Q1 of this year. In all of 2023 — YouTube ad revenue raked in $31.5B.

If there’s one place where we could really use your help — it’s YouTube.

Please click ‘Subscribe’ on our YouTube channel (linked here). We want you along for the ride as we beef it up!

— Robert

Austin’s Callout

The chart above was originally shared by Market Sentiment on Substack — an awesome weekly newsletter.

It illustrates, on an annual basis, just how much cashflow Apple generates — as well as where that cash goes. Considering the recent headline news of Apple’s $110 billion share buyback program, we thought it would important for everyone to understand how that actually takes place.

As you can see on the right side of the chart above, Apple spent $15.0 billion paying their shareholders cash dividends, and another $83.0 billion repurchasing shares of their own stock. As a quick reminder, companies repurchase their stock to return profits to investors and increase shareholder value.

With less shares outstanding, existing investors are now entitled to more of the company’s profits — a good thing!

“Apple increased its cash dividend by 4% and authorized an additional program to buy back $110 billion of stock. The buyback is the largest in the company's history.”

— Reuters

The Rich Habits Radar

  • 👉 OpenAI revealed GPT-4o — the new flagship model of the company.

  • 👉 Google’s I/O Conference featured “AI” a hilarious number of times.

  • 👉 Ethereum ETFs look like they will get denied by the SEC.

  • 👉 Red Lobster is closing 50+ stores and might file for bankruptcy.

  • 👉 Microsoft pledges $4.3B investment for AI in France.

  • 👉 Squarespace is going private in a $7B private equity deal.

Check ‘Em Out

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Disclaimer: This is not financial advice or a recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.