The Simple Side's Saturday Sendout: A Rough July End

This is a free preview of a paid episode. To hear more, visit thesimpleside.substack.comTo Simple Side Shareholders — good morning! I am glad to have you join me for another Saturday Sendout. We are finally back on all podcasting platforms as well!If you are new here or unfamiliar with our content, you can see the layout of everything below!* SATURDAY [free]* Market Commentary* Weekly Picks Performance* An Interesting Trade Idea *NEW** Total Portfolio Performance* SATURDAY [paid]* Our Weekly Picks* Mergers & Acquisitions Picks* Top Stock Picks* Micro Cap Stock Picks* Earnings & Options**** Paying subscribers — I will be sending you an email about the plan forward since Double Finance is closing its doors. Be on the watch for an email this week****The Saturday Sendout (commentary)The busiest earnings stretch of the summer was supposed to cement the “AI-lifts-all-boats” narrative. Instead, five trading sessions delivered a sharp reality check. A one-day spike in Microsoft and Meta could not prevent the S&P 500 from sliding 2.4 percent for the week and the Nasdaq from giving back 2.2 percent. By Friday’s close every major U.S. index had logged its worst weekly loss since April, Treasury yields were falling on talk of an early-September rate cut, and the VIX was printing a 20-handle for the first time in six weeks.What moved the market1. Earnings euphoria met guidance gravity.Microsoft’s blow-out Azure quarter and Meta’s record ad revenue sparked a mid-week melt-up, but the optimism faded as Qualcomm, Amazon, Apple, UnitedHealth and Novo Nordisk all trimmed outlooks. Traders were reminded that AI spending can raise the revenue ceiling while crushing near-term margins and balance-sheet flexibility.2. Mega-deals multiplied—but so did antitrust questions.Union Pacific’s agreed takeover of Norfolk Southern would create the first true coast-to-coast American railroad, and Baker Hughes’ bid for Chart Industries redraws the LNG equipment map. Palo Alto’s $25 billion purchase of CyberArk and Palantir’s decade-long $10 billion Army contract pushed the week’s announced deal value above $150 billion. Investors cheered the synergies; regulators have already signaled that rail, security-software and defense consolidation will not sail through unchallenged.3. Global supply chains keep decoupling.Samsung landed a $16.5 billion long-term chip contract, Huawei unveiled an AI server that claims to beat Nvidia’s newest rack, and Tesla lined up $4.3 billion in Korean-made LFP batteries to cut Chinese exposure. At the same time Washington broadened tariff coverage to Canada, India and Taiwan, and the EU agreed to commit $600 billion of fresh investment to the U.S. as part of its 15 percent tariff settlement. Boards are budgeting for permanently higher operating friction.4. Macro mood swung from “resilient” to “fragile” in 48 hours.Consumer confidence hit a three-month high on Tuesday, but Friday’s payroll report showed only 73 000 new jobs and a rising unemployment rate. Rate-cut odds for the September FOMC meeting jumped above 80 percent, flattening the 2-to-10-year spread to its narrowest level since March. Utilities and other defensives were the lone gainers on the week.Sector rundownTechnology finished lower even after Microsoft (+9 percent week-to-date) and Meta (+11 percent) set fresh market-cap records. Weak semiconductor guidance lopped 3 percent off the Philadelphia Semiconductor Index.Communication services held flat thanks to Meta, but consumer discretionary dropped alongside Tesla and Amazon as margin pressure became the new buzzword.Industrials fell nearly 3 percent. Rail-equipment suppliers rallied on the Union Pacific-NSC news, but airlines and parcel carriers sagged after United Parcel Service’s cost-heavy quarter.Health care lost almost 3 percent. GSK’s licensing spree and AbbVie’s rumored $1 billion Gilgamesh buy couldn’t offset Novo Nordisk’s guidance cut and new U.S. drug-pricing rhetoric.Energy gave back early gains despite $69-plus crude as long-dated oil demand assumptions were revised lower in several conference calls.Fixed income and currencies• The 10-year Treasury yield fell nineteen basis points to 4.22 percent.• The 2-year dropped to 3.70 percent, taking the implied September cut probability to 86 percent.• The dollar slipped modestly; gold rallied above $3 400 an ounce on safe-haven bids.Looking ahead* July CPI and PPI (next week): any cooling in core services inflation would hard-wire expectations for a September rate cut.* Congressional hearings on rail consolidation: House Transportation and Senate Commerce committees have already scheduled informational sessions.* OPEC+ ministerial: with Brent still below $70, producers face pressure to defend price without ceding market share to U.S. shale.* Apple and Amazon follow-through trades: both firms guided cautiously despite record quarters—options positioning now implies heightened downside risk into Labor Day if unit data soften.Weekly Picks PerformanceOur weekly picks are made in this newsletter (behind the paywall) every week. Now, nearly all of my conventional investing wisdom says that trading stocks weekly on “news” is a terrible idea. One particular quote comes to mind: “Buy bad news, sell good news.” Yet, we are doing the opposite! We are following good news & capitalizing on it weekly. Why does this work? Well, in a “normal” market, they don’t work; however, we are in a “dumb money” market (read about dumb money here). The main idea is that a significant amount of money is being allocated to equity markets without proper investment strategies (aka people trading the news). This creates ample opportunity to capture the alpha (excess returns) by making quick buys/sells in the market. Wondering if it works? See for yourself…We have generated excess returns of 50% on these weekly picks alone.Interesting Trade IdeasEvery once in a while, something strikes me as an opportunity in the market. Maybe I see an undervalued opportunity trending down on bad news, or an industry I want to talk about quickly. That is what you see here!I have been discussing three main ideas over the past few weeks. UNH, AAPL, and IPOs.Healthcare StocksStocks like UNH and ELV are trading so cheap right now that it almost doesn’t make sense not to own the companies. ELV is trading at a forward PE of 7.98, and UNH at a forward PE of 10.65. The current headwinds are “near-term” in nature, and investments in these companies now will make strong gains in the next 3-5 years.The IPO World Last week, I said FIG was a HUGE BUY following the dumb money thesis, and boy did we see some gains from that. If you picked up shares at the $33 IPO price then you made out with a 200% gain last week. If you got shares on the drop at $85, then you came away with 50-70% returns if you sold. Congrats, I will keep everyone informed of incoming IPOs!Total Portfolio PerformanceNow, I know that many of my subscribers are looking for longer-term plays and don’t care too much about the weekly picks. I think that is just fine — our longer-term holdings have also been outperforming. We utilize a dumbbell or barbell portfolio approach with one side offering a long-term “safe/slow” growth (cash, bonds, The Flagship Fund). The other side chases high growth potential (Contrarian Trades, Weekly Picks, Tech-Growth portfolios).This balanced approach has proven effective time and time again. We also offer paying subscribers the ability to look at any and all of our stocks and portfolios with real-time updates here: Check it all out here (for paying subscribers).My portfolio average return is up over 41% YTD.Our contrarian portfolio is up over 70% YTD, followed closely by our weekly picks at +41% returns year to date (these are the picks found in today’s newsletter). The lagging portfolio (based on a buy-and-hold basis) is the Flagship Fund. We expect performance to pick up in the latter parts of the year when markets stabilize. Weekly PicksOkay, let’s get into the picks that have returned 46% YTD and 60% over the past 53 weeks. As always, what you see below is a summary of our investments for this week!🟢THE BUYS🟢