Picks, Shovels, and Quality: PhilStockWorld's 2026 Stock Market Strategy cover art

Picks, Shovels, and Quality: PhilStockWorld's 2026 Stock Market Strategy

Picks, Shovels, and Quality: PhilStockWorld's 2026 Stock Market Strategy

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 ♦️ 💥 PSW Daily Recap: The “Cut-Priced” Rally and the AI Infrastructure Hunt 💥Narrative Theme: The Fed Put is Priced In: The Hunt for AI’s Picks and ShovelsThe Morning Call: Ruthless Re-Evaluation is the Only StrategyThe day kicked off with Phil’s core post, the highly anticipated Q4 2025 Watch List (Part 1), which was less about finding new stocks and more about the ruthless discipline of cutting the dead weight. The core thesis: the macro picture has shifted from “threat” to “reality“—global tariffs are the baseline, the soft landing is getting harder, and a “certainty premium” is gone.Phil didn’t mince words, laying out the famous F, Marry, Kill filter:Kill: Cutting sectors like Retail and Consumer Discretionary vulnerable to tariff-driven margin compression.F (Attractive New Additions): Hunting the “Picks and Shovels” of the AI and Energy supercycles.Marry (Core Holdings): Doubling down on Defensive and Quality names like Healthcare and Consumer Staples.1“We are still sitting on close to 50% CASH!!! and that means we’re in very good shape to take advantage of bargains when they are presented to us – but let’s make sure they are actually bargains and not just satisfying an unscratched itch to buy…” — PhilThis focus immediately set the stage: it’s a stock picker’s market defined by a “Macro Minefield,” where patience is key.The Chat Room Heats Up: Bad News is the Best NewsThe market discussion was immediately dominated by a shocking macro number—and the subsequent euphoric reaction.The ADP Employment Report dropped, showing the private sector lost 32,000 jobs in November (vs. +10k expected), with the entire decline coming from small businesses (-120K). This is textbook late-cycle weakness, but the market didn’t care about the economy—it cared about the Fed Put.Zephyr (👥) delivered the synthesis in the morning report: “The market loved it. Rate cut odds for next week soared to ~90%. The narrative has shifted from ‘Will they cut?’ to ‘They must cut to save the labor market.‘”Just as the weak data was hitting, the S&P 500 paradoxically ticked higher, confirming Phil’s lesson: in this market, liquidity expectations trump fundamentals.Later, the ISM Services came in at 52.6, showing expansion, but Phil quickly pointed out the underlying tension:“ISM Services for Nov just came out and they are 52.6… ai-yi-yi – look at the prices!!! No wonder they didn’t want to release that data! Global Services PMI is 54.1, down from 54.8… There’s a very real Global slowdown happening but hey – the Fed’s going to cut rates! So silly…” — PhilThe lesson? The market is pricing a “safe” Fed cut, but the core data (inflation still sticky, small businesses collapsing) suggests a growth problem that could quickly flip the script.A Masterclass in AI and TunnelsThe session was a non-stop barrage of analysis, particularly around the core “F” list theme of AI Infrastructure:AI Hardware vs. Software: The market saw a classic bifurcation. Marvell (MRVL) surged nearly 10% after beating earnings and buying Celestial AI, validating the “AI Picks and Shovels“ trade that Phil has been championing. Meanwhile, Microsoft (MSFT) slipped on reports of cut AI software sales quotas.Warren 2.0 (🤖) nailed the takeaway: The AI infra spend (chips, networking, datacenters) is happening now, but the downstream ROI & software monetization is still squishy & crowded.The Boring Company Takedown: In a moment of pure, comedic market wisdom, Robo John Oliver (😱) published a massive deep-dive on Elon Musk’s Boring Company, dissecting its promises versus the reality of the Las Vegas Loop. The entire analysis was a masterclass in separating hype from cash flow.RJO (😱) Insight: By comparing the Loop’s actual throughput (1,300 passengers/hour) to a single subway line (40,000–67,000 passengers/hour) and detailing the regulatory capture and safety nightmares, RJO demonstrated the danger of investing in “stories” that defy basic math and proven infrastructure.Portfolio Perspective: Fixing What’s BrokenThe chat wasn’t just theory; it was immediate, actionable portfolio triage. When a member asked about Fiserv (FISV), Phil went straight into the adjustments made in the Long-Term Portfolio (LTP) to address the stock’s sharp disappointment:“FISV – Another symbol change and OUCH! – this thing is killing us!!! Earnings were a huge disappointment but should be worked out next year and, with this crunch, they are down to 9.5x CURRENT earnings… The short puts are REALLY painful so let’s roll our 10 short 2027 $140 puts ($79,200) to 40 short 2028 $70 puts at $20 ($80,000)… we doubled our long to a much more realistic strike.” — PhilThis demonstrated the live management of risk, shifting a painful short put obligation into a far more manageable, lower-strike position and using cash to fund a doubled long-call position—a ...
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