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Buy this stock hand over fist while you have the chance

Dec 21, 2022

Good morning!

The markets are running higher on hopes that earnings will be better than feared, which strikes me as a lot of wishful thinking. But that’s not something we need to worry about or should.

What matters is that we’re playing to win, and that means taking our cues from market action regardless of how we “feel” about it.

Here’s my playbook.

$1.7T reasons Congress will damn us all to more rate increases

It’s business as usual in Washington. Federal lawmakers just got a $1.7T bill dropped on ‘em and have until the end of the week to pass it. They probably will, but the way this is handled highlights everything wrong with Washington at the moment... not the least of which is that the dang thing is 4,155 pages. There is simply no way in you-know-what a lawmaker can make an informed decision, let alone read and digest the monster.

Why you should care: Forget about all the special interests and money grubbing… what matters is that the bill just hosed the Fed, which is trying to take money out of the system. It also just damned the rest of us to even more rate increases.

Investing implications are simple. Banks, must-haves, and companies that can protect margins, especially where they line up with the 5Ds we follow in One Bar Ahead®.

A “5D,” in case you’re not familiar with the term, is a proprietary investing theme unique to OBA that’s chosen because it’s backed by at least $1 trillion in spending that will occur practically no matter what the Fed does next, no matter who is in Washington, and no matter how Wall Street tries to hijack the system.

If you’ve got this covered—and I hope you do—cool beans!

Buy this stock hand over fist while you have the chance

Palantir landed a three-year £75-million ($91.39 million) deal with the UK’s Ministry of Defense. Palantir’s software will aid military operations and prompt possible real-time actions to provide how various choices might play out. (Read)

Unbelievably, investors still have no idea how critical military tech and big data is to defense, which is why the company’s stock continues to be priced like it’s going out of business. That, and Wall Street continues to publicly poo-poo the stock while quietly buying more shares at bargain basement prices after they scare the weak money out.

Palantir is not a stock for the faint-hearted. However, there is no doubt in my mind that this will be the biggest, most-telegraphed stock move in history when it finally happens!

If you’d rather own two bigger, more stable, and less speculative defense stocks, I’ve got a few ideas and would love to share ‘em with you. Upgrade to Paid

Inflation rages: 30+% of Americans may forgo gift giving this Christmas

Bloomberg reports that one-third of Americans are considering foregoing gift-giving altogether because money is too tight. More than 60% of respondents said they plan to buy fewer gifts for fewer people. (Read)

Roughly 3 in 10 say they’ll be disappointed by gifts they receive; perhaps not surprisingly, Millennials and Zoomers are especially pessimistic, according to the poll. That’s rich, considering 1–5 young adults have debt in collections, as we learn from a new report from the Urban Institute. (Read)

The former doesn’t surprise me, but personally, I find the latter disheartening. I believe a gift in any form is something to be treasured and something for which I am grateful.

Investing implications: Credit card defaults to rise into ‘23. I assume we will see a raft of reports in early January about retail inventories from the likes of Target, Walmart, and more. At issue will be whether they learned from COVID and successfully managed both the composition and levels. BNPL numbers will initially look good because of volume… right up until you connect the dots.

I’m leery of retail stocks in general under the circumstances.

Visa to do what FTX couldn't

I’ve long maintained that Crypto 2.0 will be where the real money gets made, and this report reinforces my thinking.

Visa is proposing self-custodial wallets to set up automatic recurring payments that could be used as part of preapproved smart contracts. Translation: Visa is proposing a system that will allow crypto payments without the need to be involved in dodgy exchanges located down some dingy back alley or, evidently, Bahamian penthouses.

Visa reportedly has no plans to implement, but another company I’m tracking has been working on digital clearing since at least 2017 and does. I’ll be updating the OBA Family this Friday.