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Unka Elon Strikes Again! – SpaceX

Sep 28, 2023

Good morning! 👋

Before we get rolling, I’d like to give YOU a quick shout-out for all the wonderful emails, notes, and messages I received over the past few days. Being under the weather is no fun, but knowing you have my back means the world to me and helped me mend faster, to be sure.

Speaking of mending, let’s talk about the markets.

Futures are sliding as bond yields are rising (again). My guess is that they’ll whipsaw green to red and back again several times by the time you read this.

No surprise.

There are just two days left in a month many folks would rather forget. Job growth continues to confound the Fed (which lost the plot a long time ago) while consumers continue to struggle with inflation, falling confidence, and rising fear.

Thankfully, earnings season is right around the corner.

The boffins, of course, will immediately focus on the holiday season, especially when it comes to retailers and retail-oriented tech.

Don’t fall for it!

“Zoom out” instead.

The S&P 500 has an 82.9% probability of closing higher three short years from now and a 93.3% probability of closing higher a decade from now.

Here’s my playbook.

SpaceX lands first military contract

Love him or hate him, Elon Musk has moves like Jagger.

News broke this morning that SpaceX has landed its first Pentagon contract. The contract provides end-to-end service through the company’s Starlink satellite network, related services, terminals, equipment, and more. (Read)

Man… what I would give to be able to buy SpaceX stock!

But since I can’t, I’ll stick with Tesla.

“How” you buy is especially critical at the moment, and OBAers—you know exactly what I mean by that, especially if you read the September issue! If you didn’t, Upgrade to Paid

Wall Street, of course, doesn’t see that, which is why they’re busy cutting targets and downgrading the stock.

Remember how the game is played, and do not waste the opportunity they’re creating for you!!! 💯

Imagine what happens when Unka Elon proves Wall Street wrong yet again.

Tesla stock has returned 1,789.73% over the past 10 years versus the S&P 500, which has returned 202.89% over the same time frame, according to Finmasters.com.

Obviously, and as the old saying goes, past performance does not guarantee future performance, but let me ask you this.

Who in their right mind would bet against Musk?

I wouldn’t.

If this isn’t a sign of a bubble, I don’t know what is

More than a decade ago, I reported a story that I just couldn’t believe myself.

A German company installed a vending machine in the Emirates Palace Hotel that sold 10-gram gold bars as well as Canadian, Australian, and South African gold coins. Today, they’re sold in Dubai’s malls and other retail locations, too.

Think about that for a second… vending machines… selling gold bars and coins!

My ace editor pointed out—and I think rightly so—that those machines would be looted within minutes if they were here in the US. Probably sooner if recent incidents at Apple stores, Lululemon, and Nike are any indication. [Sigh]

Now Costco is apparently getting in on the gold action (Buy one) or learn more (Read).

What does this mean for our money?

Stories like this one typically indicate a bubble of epic proportions, but in this case, the trick is which bubble… gold, manic consumer behavior, or rates.

I’m inclined to bet it’s the Fed and, specifically, rates.

Team Powell continues to break things left, right, and center by relying on failed models, bad information, and outdated economic theories that do not reflect the world we live in.

As I noted to the fabulous Liz Claman last week when she asked me if it’s time to ignore the Fed, my take is that the Fed has already caused the next three crises. (Watch)

Sadly, that won’t stop ‘em.

Which brings me back to gold.

While I do think every investor should own at least some gold, you want to do it for the right reasons. Not because you think it’s going to be a gazillion dollars an oz.

We’ve talked about this in the February issue, BTW, which is available in the OBA archives. Be sure to check it out if you haven’t already or are a newly minted OBAer, pun absolutely intended. 😊

And remember, rising rates are GREAT for certain kinds of stocks, particularly those that we talk about frequently, with low betas and high, growing dividends that can be reinvested continuously.

If you’ve got this covered—fabulous! If not…

ChatGPT gets some major upgrades

The line between reality and science fiction is increasingly blurry.

Case in point, ChatGPT can now see, hear, and speak! (Read)

Consider what’s happening.

ChatGPT is developing a presence in the actual physical world, even though it has not YET developed a physical body.

I don’t know whether to be fascinated or terrified.

Admittedly, a little of both.

OpenAI continues to push forward regardless, announcing yesterday that the model has been updated and is now capable of browsing the internet to get “current and authoritative information.” Examples provided by the company include things like “technical research, trying to choose a bike, or planning a vacation.”

What catches my attention, though, is that websites will also be able to choose how ChatGPT interacts with ‘em, a move that increases ChatGPT’s use case exponentially!

People thought I’d gone around the bend when I said that I thought AI would put billions on Microsoft’s top line as it’s integrated into the company’s offerings. MSFT shares are up 132.52% since partnering with OpenAI in July 2019, according to Yahoo! Finance. The S&P 500 has tacked on 45.68% over the same time, also according to Yahoo! Finance as I type this morning.

Come around the bend with me; the journey is just getting started! 😊

Peloton shares “soar” on digital content... but still, no thank you

Let’s review… shares are up $0.10 or 2.3% as I type.

An “iPad” on a bike does not a business make.

PTON shares are down 97.12% from a peak of $162.72 to $4.69 where it’s trading today. While a partnership with Lululemon is wonderful news, it’s very unlikely to move the needle for an extended period of time. (Read)

Reminds me of Nautilus, Soloflex, or a dozen other fitness companies that burned brightly for short periods of time, only to fade into oblivion and late-night shopping commercials.

I might be wrong, of course, so there is that.

I don’t think I am, though.

Just yesterday, Noriko and I spotted two Peloton bikes sitting outside during our daily walk; both looked decidedly forlorn for having evidently been demoted and banished from the house.

Found! World’s oldest whisky in a Scottish castle

I love history and good mysteries—preferably when they’re one and the same.

This story is just too much fun not to share!

Apparently, a worker clearing out a basement in historical Blair Castle, Perthshire, found 40 bottles of Scotch hidden away more than 90 years ago when they were already more than 100 years old. (Read) To put this in perspective, we’re talking about a whisky once enjoyed by a young Queen Victoria!

24 of the 40 bottles will be sold at auction this November, with prices expected to be £10,000+.

Hmmmm.

On a serious note, if you’re frustrated with the stock market—and many people are—you may enjoy collecting wine and whiskey. Like cars, baseball cards, original Apple equipment, heck, even Beanie Babies, there’s value to be had over time.

I’ve started a small collection myself.

Why?

Fine wine has outperformed the S&P 500 4-to-1 since 1952, according to Forbes, while prices for some bottles of single malt whisky have grown 586% from 2010 to 2020, according to the Knight Frank Luxury Investment Index.

You can learn more by reading the Saturday Cork & Cask, which my friends at Oeno recently started for anybody who wants to learn more.

I’m a happy client, BTW.