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Musk launches an AI dream team

Jul 13, 2023

Good morning! 👋

There’s just no getting around it.

Plenty of people want to become successful in the markets, but there’s just so much BS out there about how to make it happen.

It’s not hard.

The only thing you need is a consistent, proven, and easy-to-follow path forward. And a logical framework that’ll help you sidestep the short-term chaos that trips others up.

Ask anybody who’s been reading the 5 with Fitz and who is now better off for having remained “in to win” while millions of nervous investors abandoned ship last year.

Not to get all mushy or anything, but...

I’m thrilled you’re here and that we’re on this journey together!!

Here’s my playbook.

Earnings Season starts strong (again)

Two of the biggies, Delta Airlines (DAL) and PepsiCo. (PEP), knocked earnings outta the park with a double beat—meaning they beat expectations top and bottom line. (Read)(Read)

Excellent.

Most people are going to zoom in on the details, but the real path to profits will come to those who “zoom out.”

Think about what this says about consumers at the moment.

Strong consumers will translate into big gains way beyond the cyclical names people are jawboning about this morning. Including many in the One Bar Ahead® portfolio that could do substantially better. Upgrade to Paid

Hooyah!

Sidenote: Brace yourself for a new batch of hopelessly good-looking, impeccably tanned influencers on social media! 🛫🏄

That, and a much-stronger-than-expected earnings season!

Disney still has an ESPN problem

I was all but excommunicated from the “House of Mouse” in early 2021 when I noted that the company had an “ESPN” problem and the stock was beginning to waver as it pulled back from near $200 a share.

People wanted to buy in, but I told a packed audience not to because the damage was just starting.

More recently, I encouraged investors to steer clear (at roughly $90 a share) until there’s a few quarters of turnaround performance that justifies the risk we take as investors. That didn’t earn me any brownie points either, as you can imagine.

But the time to buy may finally be around the corner.

CEO Bob Iger is apparently open to unloading TV assets, even though he apparently still considers ESPN to be in a different bucket. (Read)

He’d better do whatever it is he’s gonna do sooner rather than later. Disney’s parks are all but empty this summer—thanks to nose-bleed-level ticket prices, woke backlash, and the ongoing culture wars. (Read)

And yes, I still think waiting for a few quarters of solid turnaround performance is the right move.

LEAPS might be good for punters, now that I think about it, though.

Britain’s power providers are about to get “Musked”

I learned a long time ago not to bet against the man. Tesla shares have returned a jaw-dropping 3,338.16% over the past decade. The S&P has tacked on 159.97% over the same time frame, according to Refinitiv Eikon.

People didn’t take me seriously when I said that Musk wanted to get into electricity trading and had designs on the electric grid via his Powerwall home batteries. (Read)

Connect the dang dots, people!

Tesla registered as an electricity trader in 2020 and obtained a license to trade electricity across Western Europe. (Read)

No surprise that he’s taking on Britain’s energy companies.

He will do the same thing here, mark my words.

You know what to do.

$500 a share and a split, perhaps 2 in the next 5 years.

And on a related note...

Musk launches AI dream team: X.ai

Unka Elon is launching a new AI company called X.ai that’s packed to the rafters with people from DeepMind, OpenAI, Google Research, Microsoft Research, Tesla, and the University of Toronto, just to name a few. (Read)

What catches my attention, though, is that those very same people worked on some of the biggest AI breakthroughs out there—including AlphaStar, AlphaCode, Inception, Minerva, GPT-3.5, and GPT-4.

In other words, MUSK just put together what could be the AI “dream team.”

I think:

a. MSFT may finally have a challenger; and,

b. TSLA is probably going to see 20%+ on the bottom line as Musk integrates X.ai-created developments into every business he owns

Google just got relegated to the minor leagues.

CA’s latest bonehead move = higher oil prices

Reuters reports that new oil well approvals have all but stopped in California. (Read)

Is anybody surprised? 🤷

I’m not.

California is America’s 7th-largest crude producer. Halting new drilling permits will place upward pressure on oil prices... and, chances are, be great for pipeline stocks.