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☕ Goldman and BoA are in firm command of the obvious, and that’s bullish

Sep 10, 2024

Howdy! 👋

Looks like there’s some follow-through this morning.

Excellent!

Here’s my playbook.

1 – Flat to middling so far

The algos that drove yesterday’s massive buying spree are quiet this morning.

Good - that’s a sign the markets are working normally, even if there’s more selling to come.

Remember, there is NO rush.

Big market moves are like a big meal in that they require digestion.

Dessert will be here soon enough. 😊

Speaking of which...

2 – B of A comes around after Palantir has run 466% 🤦‍♂️

Wall Street has had it out for Palantir from the very beginning calling it an imposter, vaporware, overpriced, a charlatan, no different from <insert their favorite stock> and more.

Now comes Bank of America’s Mariana Perez with – ta da – a $50 target - saying, that Palantir’s inclusion is a “watershed moment” for institutional investors to reassess the company’s long-term potential which they believe has been fundamentally misunderstood. Moreover, Perez notes that Palantir’s unique model and solid margins give it pricing power.

Gee, I thought to myself as I read along this morning, that sounds familiar.

Almost word for word or at least thought for thought, in fact.

Now and to be fair, I could easily have been wrong so I don’t care too much about getting credit for being first in the water at $50 which I initially talked about when it was tapping $6-7; this is a tough business and that’s how the game goes.

I am far more interested in being profitable which is why I told Charles Payne that I hoped, “I am smart enough to buy more” shares during this chat on November 23, 2023 with the fabulous Charles Payne when Palantir was in the low $20s having already run up 230%+. (Watch)

What's next?

That’s the important part, at least if you’re as interested in profit potential as I am.

News sources are billing Perez’s pronouncement as a “new Street high” target and falling all over themselves to put out headlines trumpeting as much. That will bring the FOMO crowd a ‘running which will great for those already on board.

There will be other analysts who file “me, too” reports with new targets in the months ahead. That, too, is a massive bullish influence and all but makes $50 a share a done deal.

Meanwhile, I am starting to wrap my brain around $85 a share.

Keith’s Investing Tip: Investors swear up, down and sideways that they won’t miss the next Microsoft, Apple, or Tesla, yet that’s exactly what happens. Two reasons: 1) Because they can’t think outside the box and 2) they’re scared of something new when it comes to a company like Palantir. So now they’re going to rush in because Palantir could jump from ~$34 a share to $50, a 47.06% run if it happens. What they should be doing is asking themselves why they missed the 466.67% increase from $6 and figuring out how NOT to make the same dang mistake again.

Missing opportunity is always more expensive than trying to avoid risks you can’t control.

3 – Southwest Airlines lost its luggage a long time ago

I can’t recall the last time I’ve seen such a massive run for the exits.

Six of Southwest’s board members are retiring in November, the company intends to appoint 4 new independent directors and CEO Bob Kelly is going to get sent packing. (Read)

Elliott Investment Management, a so-called activist investment firm, wants to make changes that it believes will return the carrier to performance.

I wouldn’t take that bet, even if I thought they could.

Airlines are notoriously unprofitable, unpredictable, and tough on investors. Besides, there are better opportunities out there with considerably higher profit potential.

Sub $20 a share isn’t outta the question in my mind. I’d think about putskies normally, but Elliott’s involvement complicates matters and makes the trade dicey. Pass.

4 – Is be in the office “or else” more profitable?

Game on.

PricewaterhouseCoopers, known as PwC, announced that its U.K. branch is "placing more emphasis on in-person working." And that it will monitor employees’ locations to ensure compliance with a stricter return to office policy that comes into effect next year. (Read)

I think there will be a link between profitability and presence and, like it or not, that companies requiring (and enforcing) office policies where that makes sense will reap the whirlwind.

Stay tuned.

Meanwhile, if having a shot at companies like Palantir at $6 and Nvidia at $110 when I said it would run to $1,000 and split is something that interests you, I’ll be here and would love to earn your trust, goodwill, and business. If you’ve got it covered, excellent!

5 – Goldman on Nvidia = firm control of the obvious

You can’t make this stuff up.

Fortune is reporting that Goldman is out with a report this morning saying that Nvidia is undersold and that the company is a bargain now that AI is going beyond the hyperscalers. (Read)