☕ Buy the company making shovels when everyone wants to go prospecting!

Good morning! 👋  

It’s great to be back after a quick trip to Las Vegas last week where I delivered the keynote address at one of the most inspiring corporate meetings I’ve ever attended, the Western Regional Summit for the Bennett Family of Companies. 

CEO Marcia Taylor founded the company 50 years ago with just 15 trucks and, as she put it, all the cash she and her husband could scrape together.  

Today it’s one of the largest, best-run trucking and logistics companies in the game - a billion-dollar, woman-owned global enterprise centered on faith, family, and freight. If you’ve got anything that needs to be moved – and I mean anything from chickens to rockets – they'll get the job done. 

I asked Mrs. Taylor who came from profoundly humble roots about that, and she responded with all the grace you can imagine, “Our people make the difference.” 

I couldn’t agree more strongly. 

It doesn’t matter whether you’re talking about trucking or buying great stocks in world-class companies... people make the difference, and always will. 

Speaking of which... 

Futures were strongly in the green when I took to the air for a conversation with the venerable Stuart Varney. (Watch) 

Now stocks are too. 

Here’s my playbook. 

1 – Nvidia or bust 

I continue to hear from those who insist that NVDA is too expensive, too far ahead of itself or simply too big. Besides, the “PE ratio is 73.63X earnings” cry the critics as they look down their noses dismissively at me. 

Really? 

Two things about that. 

First, trailing PE ratios have no predictive value whatsoever, contrary to popular opinion. 

And second, NVDA’s forward-looking PE ratio is just 35.71, which is consistent with the 31.25X MSFT sports. 

I don’t know about you, but I’m much more interested in where NVDA’s going than where it’s been (which is why the forward PE ratio is more meaningful). 

CEO Jensen Huang is more than capable of unleashing a Jobs-like “iPhone moment” at this week’s NVDA conference.  

Remember, AI isn’t just a technology. 

It’s THE technology of all time and – not for nothing – one that is already changing the course of humanity.  

NVDA has returned 1,983.20% over the past five years versus 96.53% from the SPY over the same time frame according to finmasters. 

MyPOV: Buy the company making shovels when everyone wants to go prospecting! If you’re worried that the stock is expensive, change up your tactics using options, fractional shares etc,  

You can make money or excuses, just not both. 

If you’ve got this under control and have a handle on the situation, that’s great – most don’t. On the other hand, if you’d like some help in the company of like-minded investors, I’m here and I’d love the opportunity to earn your trust, goodwill, and business. 

2 – Alphabet +6.37% after Apple reportedly wants to license Gemini  

Bloomberg is reporting that Apple and Alphabet are in active negotiations regarding the possible use of Google’s Gemini AI on new iPhones. (Read) 

GOOG, of course, has taken off. 

I wouldn’t be so quick on the buy button. 

If Apple does select Google, it won’t be because the AI is better; it’ll be because working with OpenAI may bring ‘em too close to arch-rival Microsoft. 

Apple is still a much stronger investment (than Google) IMHO.  

Perhaps not surprisingly, I find myself itching to get short GOOG or at least to buy a few well-placed putskies – put options in FitzSpeak. 

3 – UAL: Really, we’ve got this under control 

United seems to have been taking quality control lessons from Boeing lately. 

The airline has had a string of super hi-profile incidents in recent weeks ranging from a tire falling off a Boeing 777 after takeoff from San Francisco to the discovery of a missing panel on an aircraft after it landed in Oregon.  

CEO Scott Kirby is in damage control mode, trying to reassure increasingly skeptical passengers that “there’s nothing to see here” and that everything is hunky-dory. (Read) 

Personally, I don't believe it. 

I gave up flying United years ago and walked away from hundreds of thousands of miles after a string of missed connections, lost baggage, delays, pathetic customer service, ancient planes, and constant mechanical delays. 

Now, my team knows to book me on “anybody but United.” 🤦‍♂️ 

4 – China’s retail numbers are what Beijing wants you to think 

Chinese retail sales are +5.5% YTD while fixed asset investment has jumped 4.2%. 

Great right? 

Not exactly.  

The current data includes an important boost from Lunar New Year which is China’s biggest national holiday and a time during which factories and businesses are closed for the week. At the same time, holiday travel jumped as the Red Dragon continues to re-emerge from Draconian Covid-19 restrictions. 

It's logical that retail demand will be “up” under the circumstances. 

Here’s the thing. 

China’s statistics are even more cooked than our own which is why it’s super critical to remember that nothing happens randomly there. If Beijing wants you to believe that the numbers are good, then guess what... the numbers will be good. 

The data point you actually want to focus on as an investor is the one that matters. 

China’s exports jumped +7.1% in US dollars while imports rose 3.5%, both of which reflect what’s really happening. The world may “hate China” but very clearly businesses love buying from ‘em and selling to ‘em. (Read) 

Keith’s Investing Tip: Government agencies the world over have seemingly refined lying to an artform when it comes to manipulating data. China, especially. Tracking imports and exports is harder to fake which is why it can give you a more balanced, accurate gauge - and both of those things are on the uptake. 

5 – It's official, car makers are worse than credit ratings agencies 

I don’t know about you, but this makes me boiling mad.  

Once again, we’re being turned into products and have no say in the matter.  

Car companies are turning our vehicles into massive sensor platforms then selling that information, often gathered without our permission, to insurance companies that are, in turn, using it to raise rates. (Read) 

Funny enough, I had a heated discussion years ago with my friend and longtime insurance agent about this very subject. 

No way in you-know-what was I going to put one of those devices in my car, I told him. 

My insurance company would use that to jack my rates because they would take my driving data which is largely rural and compare it against city slickers. Of course, we’d come out on the losing end of the stick because the distances are bigger, the speeds higher and the braking harder. 

I say it’s time for reform. 

Either that or the mother of all class action lawsuits against insurance companies and car makers, along with credit ratings agencies which will undoubtedly find a way to get in on the action and use yet another facet of our personal lives against us to make billions. 

My agent, btw, didn’t put one of those devices in his car either after our discussion. 😊 

Bottom Line  

People ask me about hot stocks frequently.  

That's the wrong question.  

Ask yourself which stocks will be there when you need 'em and work backwards.  

It's a very short list. 

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

Keith 😊