Our put on Carvana has been a home run. The used car dealer that was once a tech darling and is now in financial distress. They are far in the money. Today is a good day to take a profit.
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Oil prices will go much higher despite Fed tightening throughout the year. This is a major headwind (among several) to airlines as higher fuel costs impact their profitability. Using the Bubble Score system, Jim and Dan recommend put options on this major airline stock as inflation continues to curtail discretionary spending and recession fears will put pressure on its stock price.
As the Federal Reserve continues to raise interest rates in the U.S., dollars are draining out of China in search of higher returns. This puts downward pressure on Chinese stocks along with other headwinds, including the pandemic and prohibitions on high tech transfers to China. Using the Bubble Score system, Jim and Dan recommend put options on the leading exchange traded fund that tracks the performance of major Chinese stocks as a recent rally won’t last and major headwinds to growth will send its stock price plummeting.
Transportation and trucking companies are not immune to the global supply chain breakdown that is plaguing logistics providers on a global basis. With driver shortages, equipment shortages, and logistics bottlenecks facing truckers since 2019, revenues will suffer as a result. Using the Bubble Score system, Jim and Dan recommend put options on one of the largest trucking companies in North America as these headwinds will impact its earnings and drive down its stock price.
Online shopping became the rage during COVID quarantines when bricks-and-mortar competition was almost completely shut down. But multiple headwinds are now putting pressure on online retailers and their profit margins are being squeezed as a result. Using the Bubble Score system, Jim and Dan recommend put options on one of the world’s largest online retailers as these pressures will cause the drawdown in its stock price to be prolonged and severe.
Boeing warned of high costs and program challenges in their recent earnings report. This news is not good for Spirit in the long-term, as Boeing is one of their critical customers. In the short-term, the recent market sell-off has pushed SPR down sharply. We have a big gain in our puts after holding for less than a week, so we recommend taking profits.
No sooner did the pandemic end in the U.S. than the triple-whammy of supply chain dysfunction, inflation, and demand destruction hit with full force as companies that offer discretionary goods have struggled. Using the Bubble Score system, Jim and Dan recommend put options on one of the largest manufacturers of food service equipment as the company is most likely to suffer in the coming recession.
