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☕ Where investors should focus next and why

Oct 25, 2024

Good morning! 👋

The markets are firmly in the green as I type in the early going but remain on track for a losing week anyway. The move in US Treasuries proved to be the financial version of pouring cold water on party-goers in Ibiza… a bummer.

Still, earnings remain stronger than people expect.

And that, in turn, means there’s plenty of money on the move.

I say use that to your advantage.

Remember…

Chaos always creates opportunity!

Here’s my playbook.

1 – Where investors should turn their focus next and why

Yesterday, I had the pleasure of speaking with the super smart Liz Claman who asked me where investors should turn their focus next given the run up into elections and why. (Watch)

Keep it on the fairway… now is not the time to go crazy pants.

2 – Required watching for every Palantirian and those that aren’t

This made the rounds yesterday and it’s an important reminder why CEO Alex Karp is who he is and why Palantir is what it is. It’s absolutely on point. (Watch)

History is very clear.

Strong, unapologetic CEOs provide better leadership, make smarter decisions, and inspire their teams to innovate and succeed which is why, not surprisingly, stocks in the companies they run tend to do far better over time than those run by wishy-washy, indecisive and uncertain execs.

3 – VW to resurrect Scout but…

Scout Motors, a VW-backed brand, introduced two new EVs - one an SUV and another a pickup truck. These’ll apparently be priced between $50,000 and $60,000. (Read)

This is an excellent development…. right up until you realize that the new models won’t debut until 2027 at the earliest.

Traditional car makers are too slow to introduce products.

Meanwhile, the Chinese - think BYD especially - can go from concept to design 5X faster and at 1/3rd the price while producing an arguably better product for global sales.

Tesla, of course, already did.

Just sayin' 🤷

Long BYD, Tesla and avoid any of the traditional automakers like the plague. Or putskies if you’d rather.

OBAers, you know the drill and hopefully are grinning ear to ear with the other names involved, too. (Click here to learn more if that’s helpful or you’d like to be part of the Family)

4 – A new form of AI… to fight AI

Microsoft-owned LinkedIn has reportedly verified over 55 million users for free to combat the rise in AI-driven misinformation and fake profiles. (Read)

I don’t understand why big companies didn’t make this SOP years ago.

Same for every social media platform.

We live in an age of increasing cybersecurity threats - even the top dogs are at risk – with estimates projecting an impact of $10.5+ trillion by 2025.

CrowdStrike continues to recover nicely, having jumped 42% off lows set in August.

Keith’s Investing Tip: This is a great example of a newly emerging investment opportunity in formation. AI to fight AI. The biggest players so far are traditional cybercrime choices like CrowdStrike and to some degree Cisco and Oracle, but my expectation is that we will see an entirely new class of company grow out of what’s happening. There’s also Fortinet, Rapid7, Zscaler and Qualys which are more oriented towards data traffic, malware and endpoint markets or vulnerability management, at least for now.

**5 – Who else uses onions?**

Yum Brands, Burger King pull onions from some locations after a McDonald’s E. coli outbreak across 10 US states that the CDC says has sickened 49 people and led to one death. (Read)

The situation reminds me of something that happened years ago at home in Japan.

A prominent Japanese gyoza maker – gyoza are a favorite dumpling – began quietly buying gyoza from China only to learn after rebranding ‘em as their own that the Chinese maker upon whom they depended on was putting cardboard in the filler… cardboard!!!

McDonald's stock will likely bounce back quickly but the bigger concern for investors is “supply.”

We’ve become so dependent on JIT deliveries – just in time – that I think we’ve forgotten about something I call JIC – just in case.

Medicine is much the same way.

I think there’s a good argument to be made that investors should consider supply chain management as a newly emerging investment criteria when evaluating companies because that is, I submit, every bit as important as things like inventory and operations.

Not sure how to model this yet but working on it.

Meanwhile, I’ll be steering clear of fast-food joints as both an investment and a meal.🤦