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Nvidia: Buy, sell, or hold?

Aug 24, 2023

Good morning! 👋

NVDA knocked the leather off the ball as expected yesterday, and I, for one, am super glad I own it. I trust you feel the same way—or at least I hope you do, considering how often we’ve talked about it.

It’s an interesting dilemma, to be sure.

So many people get caught up in what might happen that they forget to focus on what is happening. I get why they feel that way, but boy, it sure is tough to watch ‘em get left behind.

So now what?

NVDA will open at a record high after having swept out the weak money in the short hours, and the broader markets look set to go along for the ride, exactly as I said would be the case Monday on Varney & Co. (Watch)

There is still plenty of upside.

I think the stock will hit $700 or split within the next 36 months, in which case it could accelerate even faster.

Here’s my playbook.

Nvidia warns export restrictions will throttle US semiconductor lead

Nvidia is concerned that further curbing US chip exports to China will be bad for our competitiveness. (Read)

And they’re right.

The doom-and-gloom crowd will naturally seize the headline as an opportunity to ply their trade, yet NVDA is up more than 220% this year and expects revenues to nearly triple in the September quarter. The S&P 500 has returned 16.54% over the same time frame, according to Google Finance.

Do NOT make the mistake of getting distracted.

NVDA may well be THE investment of a lifetime, a comment I made last October when it hit a 52-week low of just $108.13. Any investor who paid attention has had the opportunity to enjoy a 349.48% run higher since.

OBAers, BTW, are no doubt smiling ear to ear. You can join ‘em if you’d like by clicking here.

Ruh-roh: Credit card delinquencies are on the upswing

This could be yet another canary in the coal mine, as the old expression goes.

Credit card delinquencies are on the upswing, according to FOX Business, which sounds like a story about consumer troubles. (Read)

And it is…

What I’m focused on, though, is different.

The delinquent accounts appear to be concentrated in small and medium-tier commercial lenders. In fact, late credit card payments at banks outside the top 100 in terms of size have risen to record highs.

If there’s ever a reason to remain focused (as an investor) on the biggest and best banks, this is it.

Why?

I still expect small, mid-tier, and regional banks to have significant problems later this year as the situation intensifies, rates continue to rise, and the real estate market struggles.

You don’t really believe that was a plane crash… do you?

Putin’s “Chef” (mercenary warlord Yevgeny Prigozhin) has apparently died, along with several others, when his plane went down in the Tver region of Russia. Embraer, which made the jet, was quick to point out that it hasn’t provided services to the aircraft since 2019 because of international sanctions. (Read)

My guess is that wouldn’t have mattered.

The list of people who could potentially challenge Vladimir Putin is being whittled down. Key staff members are dying under mysterious circumstances, falling out of windows, in hospitals, and now, apparently, in a plane crash.

Defense stocks are still very much a no-brainer.

Attn. JPow: US economy added 306,000 fewer jobs than previously believed

A new federal release shows that the US added 306k fewer jobs than previously projected. (Read)

Traders will seize on this as a reason that the Fed will stop raising rates or at least pause.

I wouldn’t bet on it.

The Fed has boxed itself into a corner and cannot admit that it’s as wrong about labor and rates as it was about transitory, as long as the government continues to spend.

The path around this little pickle as an investor is challenging.

What we—meaning you and I—want to do is buy stocks with a growth rate and profit generation high enough to mitigate the risk. I wrote about this a while back as part of an exclusive interview with the legendary Dr. Mark Mobius in the March 2021 issue of One Bar Ahead®.

Like oh, I dunno… Nvidia.

If you’ve got this covered, cool beans. If not and you’d like some help, I’d love to have you on board if you’re interested. Upgrade to Paid

Another BRIC in the wall

BRICS is an acronym that represents a group of five major emerging economies: Brazil, Russia, India, China, and South Africa. Now that’s about to be BRICAEEISAUAE—as Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE join the party. (Read)

No word on how they’ll pronounce that one! [face palm]

Many people will focus on the BRICS themselves because it’s a primary economic bloc intended to counter the G7, but that’s NOT the real story here.

The BRICS intend to develop their own currency, something I’ve talked about since at least 2009 when I highlighted China’s aspirations in that department for the first time to the investing public and some of my earliest research clients.

People will interpret what’s happening as a sign that the USD is going to weaken, but I don’t think that’s accurate.

What’s more likely is that China will move to make the digital yuan central to a partially asset-backed BRICS-centric currency and international clearing setup.

Unfortunately, this isn’t a tradable outcome at the moment, unless you want to speculate on the Chinese yuan via something like the WisdomTree Chinese Yuan Strategy ETF (CYB).

Personally, I’d rather invest in US businesses doing business because of China, rather than put my money in China at the moment… but that’s just me.