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Jul 18, 2024

Good morning! 👋

My grandfather had a sign mounted to the inside of his office door frame so that it was the last thing people would see as they left. And I find myself thinking about it at 230 in the morning as I type today.

There are three kinds of people in this world.

Those who make things happen.

Those who watch things happen.

Those who wonder what the heck just happened.

Which one are you?

Most folks have no idea.

Which explains a lot about the world we live in and days like yesterday.

Futures are, naturally, trying to make a comeback as I write after what CNBC is billing as the “worst day since 2022.” 🤦‍♂️

Make no bones about it, the reason headlines like this play is because fear always has a platform.

Put that aside.

Investors don’t fail because they have bad days.

No.

They fail because they lack a proven long-term framework and the perspective needed to get past short-term market noise.

Tape this picture to your monitor or your forehead if you prefer.

Here’s my playbook.

1 – The smackdown is an incredible buying opportunity

We are likely to have a historic earnings season, especially for big tech and especially when it comes to AI. Even if there is more selling.

I keep a “buy list” handy for just such occasions.

Hopefully, you do, too.

MyPOV: The markets are the only store on earth where people fear a sale. The question – per my grandfather’s sign – is not whether there’s more selling ahead but, rather, what YOU will do about it and how YOU will address the opportunity it creates.

2 – TSM: buy, sell or hold

Taiwan Semiconductor shares have returned 65.58% this year, even after all the selling yesterday. The S&P 500 has turned in 25.70%, by comparison.

Demand is off the charts

TSMC products are found in everything from AI to smartphones

62% global foundry market share, up from 59% YoY

CEO C.C. Wei said, “the demand is so high I have to work very hard to meet customer demand.” (Read)

Should you buy TSM?

It’s a great company in many ways but before you do, consider this. I prefer another two chip makers because they’ve got even better upside. You can learn more here if you'd like.

Keith’s Investment Tip: People often split hairs which is a particularly popular undertaking with the “yeah, but...” crowd when it comes to stocks like TSM. My POV is far simpler. AI is going to be the single largest investing opportunity in recorded human history. So what if there’s a pullback, a correction, or a drawdown – whatever you want to call it. Be in to win or you won’t ... win.

3 – Lagarde pulled a Powell

ECB central bankers have totally, sorta, maybe, just possibly kept the door open for September cuts if reports are to be believed. (Read)

Not that I’m skeptical or anything but, riiiiiiiiiggght.

Central bankers including our Fed will say anything to perpetuate the illusion.

The better choice is to ignore ‘em and to focus on companies putting up real results anyway, no matter what the ECB or other banks do.

It’s a very short list.

Christin Lagarde did exactly what Unka Powell is doing.

She punted. (Read)

Keith’s Investing Tip: Rates are for traders. Profits are for investors.

4 – An impressive dividend choice for income-oriented investors

People often go for the highest dividend yield, particularly if they’re income oriented.

True Shareholder Yield – which I use to help guide the One Bar Ahead® investing approach - is a better metric.

Take Gilead Sciences, for example.

The listed dividend is 4.15% but the True Shareholder Yield is 5.28%. And at these prices, I submit one helluva bargain, especially if you understand how to buy the dang stock.

The right tactics can be a huge advantage.

5 – What the Mirage’s closure tells me

I’ve been to Las Vegas more times than I can count over the years.

Funny thing is, I don’t gamble.

But I do take in the sights, often running on the strip in the early morning hours ahead of speaking engagements or just after rolling off an airplane in the middle of the night following a long international flight.

The Mirage’s volcano was always a “sign” that I’d arrived. Now it’s going to be replaced with a nearly 700-foot-tall guitar-shaped hotel according to Hard Rock International which owns the joint. (Read)

Hmmm.

People constantly hunt for technical or fundamental indicators when investing but sometimes the best “signs” of all come from what you see with your own eyes.

In this case, more large-scale development.

Vegas isn’t built on the cheap, so this tells me there’s still a) plenty of cash available, b) plenty of risk willing to be taken and c) lots of opportunity ahead.

Vegas is a microcosm of the broader economy, albeit one that’s considerably stronger than the data would seem to suggest.