☕ Why I can't get enough of this stock

Good morning! 👋 

One of the toughest things about summer trading conditions isn’t the markets but the temptation to try and second-guess which way they go next.  

Yesterday’s selloff and today’s early rebound is a great example of what I’m talking about.  

People were falling all over themselves 24 hours ago in a rush for the exits. Many are now uncomfortably caught between a rock and a proverbial hard place as they watch the Nasdaq and S&P 500 “green up.”  

It’s an important reminder. 

The path to success and, more precisely, to profits isn’t to focus on the minutia but learning to “zoom out” - something I talk about frequently. 

Put another way, it’s very unlikely you can beat a supercomputer at chess any more than you can beat a massive, well capitalized trading firm armed with one (and they do have access to ‘em FYI) if you’re day trading. So don’t kid yourself. 

But I believe it IS absolutely possible to beat Wall Street at its own game if you’re an investor and you learn to focus on the broad sweeping trends that result from trillions of dollars moving around in search of the obvious. 

Warren Buffett does it. 

Ron Baron does it. 

Peter Thiel does it. 

Lisa Su does it. 

Suze Orman does it. 

We – you and I - are doing it. 

Here’s my playbook. 

1 – Nvidia is down nearly 20% since last Thursday 

So what. 

The stock has returned 138% YTD, 179% over the past 12 months, and 3,031.04% over the past 5 years – even after all the selling. 

Chill! 

What you should be asking yourself is the same question I’m asking myself. 

Do you own enough shares to make a difference? 

Most people don’t. 

At the risk of sounding like a broken record AI is going to go down as one of the largest – if not the largest – investing opportunities in recorded human history. 

2 – Novo Nordisk invests $4.1B for “skinny jab” production 

Danish drug maker Novo Nordisk is building a new $4.1B facility to fill and package its weight loss syringes and injection pens. The plant will double the size of existing facilities in NC while adding another 1,000 jobs according to the company. (Read) 

What catches my attention is that management is also planning to invest $6.8B in production, up from $4B in 2023. 

Weight loss business is big business, pun absolutely intended. 

CEO Lars Fruergaard Jørgensen noted that it took the company 100 years to reach 40 million patients. MyPOV is that this could add millions more over the next few years alone. 

Novo Nordisk is now the most valuable company in Europe and has a market value equal to more than 50% of the Danish economy. 

But it may not be the best investment. 

Lily is the closest competitor. 

Teva Pharmaceuticals is the world’s largest generic drugmaker and it just launched a generic version of Victoza which is often prescribed “off-label” as a weight loss aid here in the US. 

Hikma Pharmaceuticals just got tentative FDA approval, too. 

Pfizer/Viatris are bringing Mylan. 

Novartis has Sandoz. 

Looks like we’ve got some homework to do. 😊 

My Two Cents: I often poke fun at fitness and our relative lack of it as a modern society. Before you castigate me, understand that I, too, have struggled with my own weight challenges. Yes, there are chronic diseases and genetics does play a role but at the end of the day, I believe that the decision to do something about it is uniquely personal. I’ve crushed my c-spine, broken more bones than I can count, torn muscles and done things from which my doctors said I would never recover. Yet, here I am. Perhaps not as strong or as thin or healthy as I might like or once was, but as determined as ever. In life and in the markets. Strong mind + strong body = strong results. 

3 – I spoke too soon 

I mentioned recently that I’m quite concerned we haven’t heard anything from the Fed lately. 

Seems I spoke too soon. 

Fed Governor Michelle Bowman said in London that she’s still open to raising rates. (Read) 

Naturally. 🤦‍♂️ 

Millions of hardworking people are getting vaporized because the Fed continues to stick to broken models and does not take actual living conditions into account. 

The Fed remains as wrong about rates and labor as it was about transitory imho. 

Powell should hang up a sign that says, “Closed - We failed (Again).” 

MyPOV: That’s why finding companies – tech, in particular – growing at double, triple or more while being able to continually improve their offerings is critical. Because that’s how you beat it - inflation that is - from an investing perspective. 

4 – $190,000 a second 

That's the cost of damage from cyber-attacks totaling $16.4B a day according to Cybersecurity Ventures. 

One attack every 39 seconds, on average. 

Think that’s bad? 

Estimates suggest one attack every 2 seconds by 2031. 

IHAK is a popular cybersecurity ETF with good reason. It’s returned 21.03% over the past 12 months. There are others, too. 

I don’t much care which path you take because that’s entirely up to you. 

Just do yourself a favor and be sure to invest. 

Keith’s Investing Tip: Buying funds is a great way to go for many investors looking for an easy, one stop choice. The problem is that buying funds is a lot like buying cable TV in that you’ve got to pay for the channels you don’t want to get the ones you do. That's why I prefer individual stocks because I expect them to perform considerably better. Case in point, my favorite cybersecurity choice – and the one I recommend to the OBA Family - has returned 168.55% over the same time frame. An 8X advantage.  

I’ll be here if you’d like some help and if not, no worries! Thanks, as always, for reading along! 😊 

5 - The other reversal of the moment, crypto 

Major tokens are down as much as –7.5% with CoinDesk reporting that more than $150M in bullish bets were liquidated this past weekend. (Read) 

Some suggest that this is due to large sales from Bitcoin miners and to the German government moving a boatload of BTC to exchanges. Bitcoin whales – meaning the big boys and girls holding large amounts of tokens – apparently sold billions in the first 2 weeks of June alone. 

My guess is that there’s some trickle down at hand given that US bitcoin ETFs already recorded more than $1B in net outflows. And that appears to continue with the US BTC Spot ETF showing -$174.45M running for the exits today as I type. 

MyPOV: While I have owned Bitcoin and Ethereum in the past, I won’t invest in either at this point because I share JPMorgan CEO Jamie Dimon’s thoughts on the stuff as they relate to a comparable lack of regulation and the volatility. But I will very much invest in digital clearing which is largely based on blockchain technology. And do. 

You? 

Bottom Line 

People ask me about hot stocks frequently.  

That's the wrong question.  

Ask yourself which stocks will be there when you need 'em and work backwards. 

 It's a very short list. 

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

You got this – I promise! 

Keith 😊