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The single most dependable investment strategy of all time is also the simplest

Oct 30, 2023

Good morning! 👋

Forget about whether the markets are up or down this morning.

Focus instead on the fact that many companies beating EPS are doing better than they did in Q1 or Q2.

Case in point…

49% of the S&P 500 had reported as of last Friday
62% reported positive revenue surprises
78% reported positive EPS surprises

If I’ve said it once, I’ll say it 1,000 times.

Chaos creates opportunity.

This is the time to get into stocks, particularly Big Tech.

Speaking of which…

Here’s my playbook.

Buy on cannons, sell on trumpets

Loads of investors want to cower on the sidelines with a sign on their rear end saying, “Kick me when it’s over”—whatever it is.

I can’t think of a worse mistake. (Watch)

The single most dependable investment strategy of all time is also the simplest.

Buy low, sell high.

Using the right tactics, though, is the secret sauce. Upgrade to Paid

What I’m expecting from Apple

Naysayers have almost gleefully announced Apple’s death for years, yet here it is again… about to report this Thursday. I see growth of +7–10%, and I’m watching wearables, Vision Pro, gaming, and Apple Pay for where it goes next.

Team Cook could all but stop selling computers and phones at this point and still make $$$ from billions of users who are diehard fans of the ecosphere (including yours truly).

Oh, and I almost forgot, Apple is now looking to capitalize on the recent resurgence of the computer market by introducing two new Macs and processors. (Read)

Think about that for a second.

As is the case with Tesla, it’s mighty tempting to write off Apple just now during a lull in the markets when the world seems to be bleak. But, taking a page from Jobs’ playbook, that’s often just the calm before a big storm of innovation.

PLTR ranked #1 and people still don’t get it

I am continually stunned by how many people still can’t grasp Palantir.

But I’ll take it.

Why?

Because it means savvy investors can continue to accumulate shares at lower prices longer knowing that a) Team Karp is charging ahead, and b) retail investors will latch on eventually and, in doing so, put a whole lot of wind in the proverbial sails.

What will that look like?

I have no idea but think about this… PLTR has returned 135.05% YTD and is 158.99% off 52-week lows, yet—I submit—has plenty of runway left!

Meanwhile, Palantir ranks as the #1 vendor in the 2023 AI, Data Science, and Machine Learning Market Study by Dresner Advisory Services. (Read)

I hope I own enough... shares, that is.

Unka Ronald serves it up (again)

I’ve told you repeatedly that the company would dish up great numbers, and that’s exactly what happened earlier today:

Same-store sales jumped 8.1% here in the US but 8.8% globally, versus the Street’s expectations of 7.8%.
Earnings per share: $3.19 adjusted vs. $3 expected
Revenue: $6.69 billion vs. $6.58 billion expected

The one fly in the ointment is that US traffic fell, meaning fewer people visited, with customers making less than $45,000 a year visiting less. However, that’s offset by a jump in middle to high-income patrons, which reinforces my contention that inflation is still with us as those folks trade down from more expensive dining options.

I continue to expect the MCD app to play a key role in how this plays out, and that’s something the Street does not yet recognize, for the most part.

Remember, this is a tech company that happens to make burgers (and other stuff).

This could make Google a player again in the AI race

Google’s agreed to invest $2B in ChatGPT rival Anthropic with a $500 million upfront investment and another $1.5B over time. (Read)

Normally, I wouldn’t give a you-know-what, but in this instance, I think there’s a chance this could finally pay off and put Google back in the race.

Anthropic’s Claude 2 model has the ability to summarize up to 75,000 words or roughly non-fiction book length. ChatGPT’s present limit is around 3,000 words.

Arthur AI, an AI research and machine learning platform, found that Claude 2 is the most reliable chatbot as measured by its ability to accurately assess its own actions as well as what it knows and doesn’t know. I don’t know whether to be interested or terrified, but that’s a story for another time.

Meanwhile, I expect another company that just happens to be located down the road to leapfrog this development fairly quickly and easily.