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May 30, 2025

Howdy 👋

A quick look at my screens and I see that all three major averages could close out the week and the month in the green.

I know they’re “red” as I type but that doesn’t change the proverbial score.

Innovation 1, naysayers 0.

Again.

The S&P 500 has returned 16.60% since April lows while many stocks we talk about regularly have done considerably better.

Which is why we talk about ‘em, but I digress.

Markets reward knowledge, not guesswork!

Here’s my playbook.

1 – Tariff Tantrums R Us (again)

US President Donald Trump has let loose with commentary that China’s “cheating” and all three averages are predictably down again in early going on related news that a federal appeals courts has temporarily paused a lower-court ruling that blocked “reciprocal tariffs.” (Read)

Neither surprises me.

Don’t let the noise rattle you.

2 – Earnings are a whole lot better than expected (also, again)

I know I sound like a broken record, but here we go – this is critically important and you want to pay attention.

According to FactSet and as of last week:

The S&P has reported earnings growth of 12.9% on average

78% of S&P 500 companies have beaten EPS estimates

Only 8 companies have withdrawn estimates or are not updating for FY 2025

So yeah… things are clearly not as bad or as rough as the headlines seem to imply every morning.

Remember how the game is played.

News agencies could give a rat’s patootie about whether you make money or not.

They make a good chunk of change by constantly cycling hype-driven, sensationalist loaded stories because they want to – and get paid for – attracting your eyeballs.

The sooner you learn to stay focused on great companies putting up great numbers, the sooner your portfolio can thank you.

Speaking of which…

3 - Costco nails it

Costco just dropped earnings and, as expected, the company hit the ball outta the proverbial park one more time. (Read)

$63.21 billion in revenue. $4.28 in EPS - both ahead of expectations.

Same-store sales? +8%.

E-commerce? Nearly +16%.

Membership fee income? +10.4%.

Costco’s advantage isn’t just bulk goods and cheap gas — it’s structural, a point most folks simply cannot be bothered to understand but an advantage for those who do.

While other retailers scramble to pass on rising costs, Costco flexes its size.

Fewer SKUs, tighter supplier relationships, and massive purchase volumes mean it negotiates better pricing and eats margin hits when it makes strategic sense to do so.

It’s one of the precious few retail stocks that could benefit from tariffs, an argument I advanced at the very beginning when those hit and which caused more than a few folks to scoff in my face.

I hope you own shares.

And if you’re an OBAer following along with our research, well done for doing so! 💯

Costco has returned 140.38% since I brought it to your attention versus the S&P 500 which has chalked up a still mighty respectable but far less 33.26% over the same time frame.

That’s a 4.24X performance advantage and, not for nothing, one that I see continuing for reasons I lay out in the June OBA, which I’ll get to in a moment.

Meanwhile…

Keith’s Investing Tip: People want to make investing complicated, but it’s not rocket science.

Buy the best, ignore the rest.

Not sure what’s the “best?”

You’re not alone and you may find One Bar Ahead® helpful. People tell me it’s changed their lives and I’ll be here if you need me.

4 – Summer rentals are down 30% in the Hamptons

Okay, hang with me.

CNBC is reporting that summer rentals in the Hamptons are down 30% this season. (Read)

Brokers who focus on ultra high-end rentals are apparently saying that their business has been hit even harder with a drop of 50-75%.

But before you and I break out the tiny violins…

What are Costco and Walmart sales doing out there?

That’s the tell.

If they’re rising, it’s not a death knell — it’s a shift in spending and confirmation that what we’ve been talking about is spot on.

Fewer beach mansions, more bulk buys and budget-conscious backyard BBQs.

📉 Luxury down = discretionary pullback

🛒 Warehouse up = middle market strength

Keith’s Investing Tip: Follow the carts and the cash, not the yachts.

As an aside, we used to count empty parking spaces back in the day when we wanted to know how retailers and real estate developers were doing ahead of critical earnings reports or other big meetings. I wore out quite a few pairs of shoes and the stock to buy would have been sunscreen and taco trucks, but that’s a story for another time from another era! 🤦‍️

5 – Issue Friday 😀

If you’re an OBAer, please keep an eye on your email.

The June issue drops later today after the team and I put a few finishing touches on our latest research which – I might add – took us in a very exciting new direction with a recommendation that may catch you by surprise!

We’ve also got a deeper look at quantum computing along with a cheat sheet that’ll come in handy at the next neighborhood get together or around the dinner table.

The portfolio review is chock full of breaking news and updated thinking – I am more confident than ever we’re in the right place at the right time. And the numbers support that, btw.

I’ll also be sharing new research on resetting our biological clocks, in the name of bigger more consistent profit potential, naturally. A strong body + strong mind = strong results!

Now, if you’re already confident in your strategy and seeing results you love, that’s fantastic. Most investors are throwing darts at the wall and lack any sort of comprehensive strategy which is why, dare I say it, they’re falling behind.

Wall Street, of course, talks a good game but, honestly, today’s markets have changed which means a different approach… if you want different results. If you don’t and you’re content with table scraps, that’s okay too – it’s your money and entirely your call.

On the other hand, if you'd like to up your game like other like-minded investors have, I'd like to toss my hat in the ring.