A dividend stock for the ages

Good morning! 👋  

Traders are starting to head out the door ahead of the holidays.  

I expect trading action to reflect that for the balance of the week with wider spreads, less efficient price action and perhaps some additional volatility. It wouldn’t be surprising to see that continue next week either. 

Translation… jerkier price action. 

That sounds scary if you’re not used to thinking about the markets in these terms, but it’s an advantage.  

Get your “buy” list ready! 

This is one of the few times a year when individual investors have the upper hand. 

Why? 

Excellent question! 

Wall Streeters must keep their money moving but we – you and me – can pick our battles and our entry points to the penny, especially when comes to great companies that get put “on sale” if there’s pullback or other shenanigans. 😊 

Personally, I love shenanigans because they’re often synonymous with big profit potential, especially if you’re disciplined about it. 

Here’s my playbook. 

1 – Red Sea + Shipping Attacks = Dicey Oil Prices  

Red Sea shipping remains a dicey proposition as Houthi attacks intensify. (Read) 

I told the fabulous Tanvir Gill of CNBC International earlier this morning on Street Signs Asia that I didn’t see prices getting too out of line because most of the risk is now hedged out of the markets.  

Red Sea routes account for about 8% of global oil trade. 

Goldman Sachs made similar commentary this morning, btw. (Read) 

MyPOV: Short term spot pricing is very different than long term contractual commitments. Suppliers will quickly find alternative routing but consumers who recall the supply chain snafus associated with Covid will find this unsettling. But that’s about it. 

2 – Apple Watch sales pause not a needle mover 

Apple has momentarily shelved the Apple Watch because of a patent dispute with Masimo over a blood oxygen sensor. (Read) 

Not a needle mover. 

Any pullback by nervous investors or headline-grabbing clickbait artists is a buying opportunity. 

Apple has returned 1,035% over the past 10 years versus the S&P 500 which has generated 162% over the same time horizon according to Koyfin.  

3 – Nikola founder Trevor Milton gets 4 years 

I endured no end of pressure from the mainstream media and investors when I said stay the heck away from Nikola. (Read) 

The story seemed just too good to be true and, as is often the case when that’s the case, that meant there was no way I was gonna recommend the stock. 

Some things are simply not worth the risk.  

Period. 

If you’re gonna take a flier on EV, think about NIO which just got a $2.2B investment from Abu Dhabi’s CYVN Holdings. I own it, along with another Chinese EV maker that could have even greater potential. (Upgrade to Paid) 

4 – AI cannot analyze SEC filings (yet) 

Investors who are counting on AI to make better investing decisions may have to wait a while. 

Researchers from Patronous AI found that ChatGPT and other AI models are not capable of analyzing SEC filings.  

There’s a part of me that isn’t surprised in the least because those documents are so complicated and based on such specific legal requirements that most humans can’t make sense of ‘em either. (Read) 

On the other hand, I think it's only a matter of time before AI gets good enough to replace the brain power needed. 

That’s what catches my attention from an investing perspective. 

AI may just be the biggest single investing opportunity in recorded human history.  

EVERY business on the planet will adapt or die.  

Every investor will get on board or get left behind.  

Mind your P’s and Q’s, though. Overnight AI experts are a dime a dozen lately. Very few of ‘em have any real industry experience whatsoever.  

Just sayin’. 

5 – A dividend for the ages? 

I find myself drawn to Medtronic this morning. 

Lots of investors like it because the company has a long history of increasing its annual dividend – 50+ years – and is poised for a comeback having fallen by -38.64% from its pandemic peak. 

The company has a long, distinguished history when it comes to medical technology and is one I’ve recommended several times in the past. 

Right now, though, I’d rather be higher in the proverbial food chain. 

With NVDA and other chip makers, for example. 

That’s because NVDA keeps Medtronic (and many other companies) in play by providing the chips that power their product lines. 

You can buy the needle or the haystack. 

Keith’s Quick Tip: Many folks view investing as a matter of picking stocks and that’s true. What they’re missing though is that it’s also a matter of weighing alternatives. In this case, the desire for consistent dividends and growth versus a decidedly growth-oriented choice that will power the dividends from other companies for a generation.  

The good news is there is NO wrong answer! 

Bottom Line  

Many people want to be rich but very few people decide to be rich then orient their lives to make that possible by eating out less, driving a less expensive car, living in a less than glamorous location, etc. 

Next time there's a down market day, YOU have a decision to make. 

To invoke the fabulous Suze Orman, “you are never powerful in life until you are powerful over your own money!” 

I agree entirely. 

As always, let’s MAKE it a great day – you got this! 

Keith 😊