Too much good news to ignore

Good morning!

Futures are up slightly as the December CPI comes in at an expected (and still ridiculous) 7% increase.

Here’s my playbook.

1 – A market that dies by fear always powers higher by profits

Yesterday’s rally is a good example. People often tell me they’ll buy on dips but then balk when they get one. Powell’s commentary, while mundane and boring, sets the stage for a measured move higher. Not surprisingly that’s what drove buying. Big tech especially. (Watch)

2 – The perfect choice for higher rates

JPMorgan (JPM) … is as close to an old-fashioned merchant bank as they come which makes it a better choice than consumer-oriented peers. The company: 1) is led by Jamie Dimon who just may be the smartest banking CEO ever; 2) has a broad, global book of business that makes it super stable and with a lower PE, a better buy; and 3) is building a digital bank. (Watch).

3 – What goes up …

Real estate prices continue to set new highs, especially in luxury markets because of a combination of pandemic-related mass exodus, remote work, low rates, fat bonuses and crypto wealth creation according to Sotheby’s International Realty.

Bradley Nelson, Sotheby’s chief marketing officer, told Bloomberg that, “If wealth creation drives a market, and crypto is driving wealth creation, then I think there’s going to be an increased demand for that kind of payment, as opposed to cash."

I agree.

And if crypto continues to struggle, I don’t think it’s a stretch to imagine luxury real estate prices relax. (Read)

Speaking of which …

4 – Chinese digital Yuan will be the currency of choice at the Winter Games

Not that I told you this was coming, but I did … last year.

In fact, I made the case very specifically in the June 2021 issue of One Bar Ahead™ that China would use the Winter Games to roll out the Digital Yuan as part of a broader plan to weaponize bitcoin and unseat the US Dollar. Sadly, Western governments are oblivious. (Read)

The story is a long way from over which is why I updated my thinking in the 2022 Outlook which was just published last week, along with my latest research, investment recommendations and more. (Get the skinny).

5 – Less really is more

I’ve often said that the first company to produce a sub-$30,000 hybrid or EV could take home all the marbles … now, Ford’s done it with the Maverick XL. It’s a bare-bones pickup that retails for about $20k or about half the price of an average new car and less than 1/3rd of what it costs to pony up for a new F-150 at $80k.. (Read)

Reminds me of the 70s when Honda stuck it to American makers by introducing compact cars that quickly stole market share from more expensive, bigger and clunkier American stuff.

Might be time to add to Ford, especially on weakness.

Bottom Line

Do not let short-term greed derail your plans for long-term wealth.

Ignore the noise.

Think about the future.

Invest accordingly.

I’m here to help.

You got this – I promise!


Keith