☕ No, Nvidia’s 10% decline just isn’t a big deal

Good morning! 👋

It looks like we’ve got a “digestion” day on our hands with all three indices in the red. 

That’s a) entirely normal and b) something I want to see. 

Here’s why. 

The markets need buying AND selling to work normally, meaning that every tick higher is balanced sooner or later by a corresponding tick lower.  

The edge comes from learning how to interpret who makes their move when and, of course, why. 

The other thing to think about is that not everything happens at once. This may seem obvious but, having spent 45+ years in global markets at this point, I can assure you it’s not. 

The variance comes into play because time scales and liquidity collide – meaning that buyers and sellers converge for a moment in time despite having entirely different perspectives over time.  

In some cases, that’s short-term traders selling to long-term investors (my favorite opportunity), but it can also be long-term investors panicking and selling to short-term traders. And you can guess who usually gets which end of the stick when that happens! 

You get the idea – there are dozens of permutations – which is why it’s critically important that YOU know what YOU want to accomplish with YOUR money. 

Investing isn’t a competition. 

Here’s my playbook. 

1 – Dow: first 9 day losing streak since the “70s” 

CNBC is trumpeting that the Dow has fallen 200 points in early going and is now on track for the worst losing streak “since the 1970s.” 

Should you panic? 

I’m not. 

Keith’s Investing Tip: You make your money on big down days but that’s just not apparent until you look in the rearview mirror. I’m going shopping.  

2 – Nvidia’s 10% decline just isn’t a big deal 

The legion of doom is at it again this morning. Nvidia shares, they’re keen to point out, are now down more than 10% and – gasp – in correction territory. 

Not a big deal. 

Nvidia’s stock has returned 2,187% over the past 5 years, 27,561% over the past 10, and a jaw-dropping 70,930% over the past 20. That’s enough to turn every $1,000 invested into $22,870, $276,610 and $710,300 respectively over the same time period. 

AI is the largest single investment theme in recorded human history, an observation I’ve made repeatedly on national television over the past few years. And Nvidia is at the very head of the class making that possible. 

MyPOV: If you’re tempted to sell – and I get that you might be - because fear is a powerful anti-motivator, take a deep breath and ask yourself this… can you afford not to own Nvidia? 

Btw, history suggests that there are 10-15 “Nvidia’s” out there right now in various stages of maturity. Hopefully you’ve got your mitts on a few of ‘em. You know what to do and, if you don’t, I’ll be here if you need me. 

3 – Pfizer finally catches a break 

Pfizer released its full-year 2025 guidance and reaffirmed its 2024 outlook, aligning with Street expectations. (Read) 

Not that I had any doubt, but boy am I glad to see my faith in the company is well placed. 

Pfizer anticipates 2025 revenue to range between $61.0 billion and $64.0 billion, with adjusted diluted earnings per share projected at $2.80 to $3.00, compared to consensus estimates of $63.28 billion and $2.88, respectively. 

Talk about an opportunity. 

Pfizer sits squarely at the nexus of two major themes unfolding right in front of us… customizable medicine and AI. Meanwhile, I’m lovin’ the divvies. 

Keith’s Investing Tip: Many investors bail when a stock they own falters but sticking with ‘em can make a huge difference in your portfolio over time. Dividend paying stocks tend to fall less, stabilize first and provide superior performance over time versus their non-dividend paying cousins. Dividend growers, especially. 

4 – Overvalued, think again! 

There are a good number of folks out there grousing about how overvalued the stock market is, particularly when it comes to S&P 500 companies.  

Let ‘em… every stock they don’t buy because they think this way means more opportunity for us. 

A new report from S&P Dow Jones Indices shows that buybacks are up 42.9% YoY. 

In other words, investors are worrying themselves sick over valuations but many of the world’s best companies think their stock is a tremendous bargain. 

Tip o’the hat to IBD’s Matt Krantz who also picked up on this, btw. 

5 – I don’t agree with the FTC normally but… 

The FTC has banned hotel junk fees. (Read) 

Good! 

I travel a lot and I’m so tired of booking hotels at what appear to be reasonable rates only to learn when I get there that there’s a $50 fee for “resort usage,” additional charges for early check in, convenience fees and more… all of which can add 20% - 50% or more to the tab. 

Call me crazy but seems to me that people will pay all day long to feel welcome and valued rather than getting gouged. 🤦‍ 

And yes, I’ll take a hard look at the first hotel stock that figures this out; so far they’re all in on it and non-starters. 

Bottom Line 

Anybody can pick stocks.  

Knowing how the game is played is what gives you the edge.  

Learn, because that’s how you get ahead and stay there! 

You got this – I promise. 

As always, let’s MAKE it a great day! 

Keith 😃