🗞 Re: Your New APY Offer

WHILE YOU POUR THE JOE… ☕️
Get in Loser, We’re Making a New Jump

We covered the importance of quantum computers and their future roles in everything from technology and finance to the way that sciences and everyday operations work. 💻️ 

As more interest grows in this trend and potential breakthroughs, a new exchange-traded fund (ETF) $QTUM has emerged to give investors a more efficient way to be exposed to these trends.

We say it's more efficient because it’s a way to tap into the industry without the hassle of having to find the best name or company in the industry.

Speaking of efficiency, let’s get on with today’s email 📧…

ROTATING ROSTER
Market Relativity

This is a quick excerpt from one of Ray Dalio’s books, where he talks about the basic intermarket relationships. 🌎️ 

However, in the real world, it doesn’t always turn out this way, which is why we wrote an entire thread about this strategy and methodology in our Twitter account.

Don’t worry, we are soon going on YouTube as well and will be explaining all of these topics in a deeper / longer format. 📹️ 

For now, let’s remember that bonds are set to rally; at least, that’s what six out of seven asset classes have to say today. With higher bond prices come lower yields, and that means you should start considering:

Dividend Stocks

The Scwhab High Yield ETF ($SCHD) is an excellent way to track the performance of dividend stocks, and more importantly their correlations to the bond market.

You have to keep a basic premise here, and that is their correlations should be positive on average, this is why:

1. When bond prices go up, yields come down thus making dividend stocks more attractive, so then the $SCHD should go up as well. 📈 

2. The opposite is true when bond prices go down, yields go up and therefore dividend stocks aren’t as attractive. 📉 

This is why being aware of correlations and relativity is so important 👀, why would investors pay for dividend stocks with added risk when they can get a high yield in a “risk-free” bond?

Now that the insiders understand there’s an upcoming bond rally, for reasons we gave you last week in our posts, the $SCHD has started to rally.

However, not all dividend stocks are made equal. Some have not only high yields behind them but also double-digit upside potential, giving you an even better setup.

Whirlpool

This is a household brand, but more than that it is a net exporter from the United States, and you already know how we feel about net exporters for 2025.

These are the underwater volleyball names that we’ve been talking about in previous posts as well as in our Twitter account.

Without much to talk about, other than Whirlpool will be pulled higher along with other such peers, here are some of the other factors we like about this stock:

• 15% Gross Margins

• 10.3% ROIC rates

• 71% of Balance Sheet is debt, great leverage setup in a dollar decline environment

Hence why Charles Schwab decided to boost its position in the stock by 14.7% as of November, adding more of it to the SCHD ETF, so should you. 🔥 

TRADE OF THE WEEK
For Old Time’s Sake

The printer business is consolidating, I mean it only makes sense to do so right? The market share of printed products is falling in real time to digital products on a daily basis.

However, printers and other such office products are still useful for some creators and corporates today, so we think Xerox stock is looking to consolidate itself as the tallest midget. 📈 

How so?

They’ve just bought Lexmark, a decently-sized company in the printer business with facilities across Latin America and Asia.

Acquiring Lexmark will allow Xerox to tap into these facilities and expand its footprint of sales and market share across the world. 🌎️ 

Of course, increased economies of scale could bring on wider margins, which translates into bigger earnings per share. That’s why we’re willing to look at this stock at today’s level, which is only 47% of its 52-week high. 📉 

It seems that we aren’t the only ones who think about Xerox in this way. The market/volume profile shows some accumulation in the $8.50 to $9.00 a share range.

This might be the result of those at Pacer Advisors, an institutional investor, boosting their holdings in Xerox stock by as much as 33.2% as of November 2024. This new addition brought their net position to $176 million today, or 13.6% ownership in the company. 👀 

This is not the typical behavior of a big firm that doesn’t think the stock is undergoing a significant enough change to raise its price.

Of course, this would be one of those long shots as we await the company's financials to clearly indicate the results of the new acquisition.

We would typically consider the stock’s valuation ratios and earnings growth forecasts compared to its peers, but there’s one issue.

Well, there are actually two issues. First, the company is too small for analysts to give a hoot about it, so we can’t really go off analyst ratings and projections for earnings. 🤷‍♂️ 

Second, as we mentioned before, the printer and office supply industry is pretty consolidated right now, so there aren’t too many reliable competitors to compare Xerox against.

However

We do think that this acquisition will likely drive EPS higher, and then Xerox’s stock price will follow shortly. 🫰 

NOW GO AND MAKE IT HAPPEN
Learn From the Best

There’s investing, and then there’s investing the way Ray Dalio does it. We connected some of the dots for you in our long bonds trade and in this pick for dividend stocks, and you can also connect them with the right methodology.

One which you can learn from Ray Dalio is the best one at implementing this approach in the market today. That’s where today’s book recommendation 📖 comes into play, we hope you learn a lot and notice some of the trends in our newsletter as well.

To your success,

G. 🥃