Companies you want to own right now and why

Note: the great server migration continues which means that some of you may receive 2 copies of the 5 with Fitz this morning because we are sending from two servers to cope with what’s called DNS propagation now that we’ve realigned our infrastructure. Sorry for the inconvenience and thanks for understanding! – Keith 

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Good morning! 

In my best TV announcer voice….

• Are you ready to ruuuuummmmmmmble???!!!

The markets are.

I’ve encouraged investors to stay on the gas all year long, saying repeatedly that the markets will have a “rip your face off” rally when Fed Chair Jerome “JPow” Powell gets serious about rate cuts.

Well, that finally happened.

I sure hope you’re on board.

Yesterday is a drop in the bucket compared to what could happen next.

Here’s my playbook. 

Bearish commentary is alluring, tempting even.

I get it - a lot of the bears I’m familiar with are super smart, super savvy thinkers.

The problem is that many are trapped by preconceived notions and outmoded thinking so they refuse to let go.

I really feel for ‘em.

It must be tough to be wrong for so long, especially after a day like yesterday. We’ve been talking about this all year and then some.

But what the heck, even a busted clock is right twice a day.

I can hear the counterarguments against buying now already building in the farthest reaches of the Internet this morning as I type… “just you wait” says one… “but all the money printing” says another. “Powell will get his” says a third. The dollar… recession… yada, yada, yada.

Don’t fall for it!

Your job as an investor is to be profitable.

This isn’t rocket science.

Remember…

... Capital is a growth machine

... The markets have an upside bias over time

... The world’s best companies continue to put up great numbers through thick and thin

The rally can and very likely will continue.

Speaking of which…

I stopped by for a quick chat with the fabulous Maria Bartiromo this morning and she asked me point blank about the Fed, Apple, AI, and more. (Watch)

I think Apple, btw, will be the first company to hit a $4T capitalization and that it’ll come in north of $250 this time next year. Perhaps even $275+. My colleague Dan Ives of Wedbush just upped his target to $250, too – so I’m not alone in my thinking.

MyPOV: Many aspiring individual investors do exactly the right thing at precisely the wrong time. Sure, there could be some selling after yesterday’s massive run higher; in fact, I’d be surprised if we didn’t have a little give back after the opening bell this morning or later this week. But what most people don’t understand is that’s normal because the markets require buying AND selling to move higher.

What you want to remember at all times but especially right now is that you must be in to win or you won’t… win!

Every investor has a list of companies that you just know you should have purchased when you had the chance and mine includes SpaceX.

It’s now considered a “centicorn” – meaning a “unicorn” 100 times over. A unicorn, in case you’re not familiar with the term, is a private company valued at $1B+. We’re talking 100X that or $100B.

CNBC is reporting that SpaceX is discussing an agreement with insiders to sell at $97 a share on the private market which, if I’ve done my math right, is a 20% increase since last July when there was a secondary sale at $81 a share. (Read)

That potentially makes SpaceX one of the world’s most valuable private companies.

So?

What captures my imagination and what I hope captures yours is how valuable low-orbit spaceflight can be to investors.

Morgan Stanley thinks “space” is a $1T industry by 2040 but I believe that number is orders of magnitude too low and that it’ll take off within the next few years – pun absolutely intended.

There’s a defense contractor that stands out as one of my top favourites. Shares are down about 4% YTD but the upside momentum is building. Plus, it’s got a great dividend and has outperformed the market handily over the past ten years, too. (Upgrade to Paid)

If you’ve got this covered, cool beans!

The point is not whether you own my favourite or yours but that you’re thinking about space as an investment opportunity because it will come into its own within the next few years.

I recall the conversation vividly.

It was early 2011 and I was having drinks in the then newly opened Ritz-Carlton Shanghai Pudong hotel bar with two company reps… one from Boeing and one from Airbus.

They were there to facilitate the handover of what they viewed as obsolete wing construction technology to China’s aviation industry in the interest of furthering flight and mutual global industry cooperation.

My take at the time was blunt… they may as well have been giving a wolf keys to the chicken coup.

We’re “not worried,” said one. China will never be able to fly outside its own borders because they don’t have the smarts or the technology prowess. They’ll “never make a long-haul jet,” said the other.

Famous last words.

I told my skeptical bar buddies at the time that China would not only take what they were giving ‘em but use that technology as a springboard to improve on it. I’d just been out inspecting China’s budding aerospace industry in Xi’an so I had a pretty good idea that I was on point when I said that the Dragon would field a native jet liner capable of international flight within a decade.

I was wrong.

It took 12 years. (Watch)

Here’s why you should care no matter how you feel about China itself.

China’s C919 is a direct competitor to Boeing’s 737 Max and Airbus’s A320.

Unfortunately, COMAC, the Chinese company that makes the C919, is blacklisted so you can’t get the company’s stock. But I would urge any investor who owns Boeing or Airbus – and a lot of people do - to think very seriously about what’s happening!

MyPOV: This is another powerful lesson in why you want to think clearly as an investor rather than dither with politicians – the C919’s engines are made by CFM (a JV between US-based GE Aerospace and French-based Safran Engines). The tires apparently come from Michelin. Other parts are undoubtedly sourced, as well.

I get asked a lot about “expensive” stocks like CRWD, for example.

Yes, it could fall… that’s a possibility.

But yes, it could also double again… that’s a probability.

Big difference.

There isn’t a company on the planet that can afford to skimp on cyber security at the moment and CRWD has consistently thrashed analyst expectations. (Read)

People are constantly looking to fault stocks because they’re “expensive” but really that’s their own confirmation bias creeping in based on the permabears I referenced a minute ago.

The world’s best investors don’t let that bother ‘em.

You shouldn’t either.

MyPOV: History very clearly shows that companies in line with broad sweeping trends rarely go backward for anything other than a short period of time. Prioritizing ‘em and getting your money there first makes sense.

Game on – you got this!

As always, let’s MAKE it a great day.

Keith