Here's a marketwide selloff that warrants returning to those stocks we often talk about that get hammered down because of extraneous issues.
Today we have the uncertainty of the debate coupled with worries about the potential solvency of Deutsche Bank (DB) . The former is simply a fact of life. When we don't know who is going to win, we pull back. In many ways, this election is turning into the Big Bad Event of a lifetime.
Deutsche Bank? Tough to call. Here's a company that radically underestimated not just how much it would have to pay for its transgressions in the U.S. mortgage market, but judging by the paltry size of its reserves, thought to be between $5 billion and $6 billion, vs. the $14 billion the Justice Department is asking for, the worry's pretty palpable. I have contended throughout this process that Deutsche Bank simply didn't believe it had done anything wrong and that the Justice Department would listen to reason.
However, the Justice Department, at times like this, can represent the will of the American people, and the will is that bankers have to pay for their transgressions and that Deutsche Bank as integrally involved in the mortgage fiasco. The idea that, somehow, the Justice Department would give Deutsche a pass was a radical misread, especially when you consider that the Justice Department doesn't care if Deutsche stays or goes or is wiped out or comes out hobbled. It's not an American bank. There aren't tens of thousands of employees who can be expected to lose their jobs.
Now we know this is an exogenous selloff because oil's up and the dollar's down, two mainstays of what causes stocks to rally. So given that things are looking up for equities away from the political elephant in the room, you have to return to growth stocks.
Here's a couple that have given you a chance to buy.
First is Amazon (AMZN) , which Cowen greenlighted with a huge price target increase from $900 to $960, in part because of an even higher take-rate for Amazon Prime than people thought. By all accounts, including endless chatter from retailers and the monster quarter from FedEx (FDX) , this is the right call. (Amazon is part of TheStreet's Growth Seeker portfolio.)
It's ironic, by the way, that I was thinking that this marketwide selloff could give me a chance to tell you to buy the stock of FedEx, but it is climbing. That's an incredible sign of confidence.
Similar to FedEx is Foot Locker (FL) , with a stock that would have been up much more today given the strong push that JPMorgan gave you from Mathew Boss for Foot Locker, which included a drastic downgrade of Nike (NKE) ahead of the quarter. I like stocks that can buck the tide of a selloff, too, on days like today. (Foot Locker is part of TheStreet's Trifecta Stocks portfolio.)
Finally, consider telco equipment disrupter Acacia (ACIA) , which just preannounced better-than-expected earnings while simultaneously announcing a secondary of insiders who certainly have every right to ring the register after this remarkable run. Acacia came public at $23 in the IPO dog days of last May and had run to $128 before pulling back to $110 on the weaker market and the new supply. You usually have to chase this one to get into it. But the combo of the increased float and the weak market has brought it low. I believe this secondary will be widely oversubscribed, and while you may not be able to get in on the deal, you could buy it now and prosper.
Marketwide selloffs occur. They may not be one day. But you have to take advantage when you get them and start new positions when they bless us with lower prices for merchandise that otherwise would be rallying like crazy on a lower dollar, higher oil and end-of-the-month mark-ups that happen like clockwork a few days before the end of a quarter.