10/15 Best Idea

As enter the final earnings season of the calendar year, here is where we stand

Small caps are red on the year and the Nasdaq is +28% while the “Magnificent 7” are up 96% this year. So outside of those few names, markets really haven’t done much. The repricing of assets going on is alot more dire than people care to admit. It’s hard to say we’re in a new bull market when small caps usually lead a bull market and they’re red. I’ve made my case before for why I think megacaps are all that we have at the moment and I think higher rates are exposing all the cracks in these others companies.

This week I have another from the Warren Buffett value portfolio but I have it not because he happens to hold it but because over the past 15 days it has seen a flurry of out of the money bullish activity that has caught my eye. Is it a potential buyout target? Let me show you the options flow I’m seeing and we can look at some charts and I will go over the risk reversal I would put on to capture the most potential upside.