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Rivian: Buy, sell, or…?

Aug 11, 2023

Good morning! 👋

I don’t know about you, but this getting-older stuff isn’t for sissies. Travel is still fun, but even short airplane stints mean a day or two of rest to get my mind and body back in gear. 🤦‍♂️

Let’s rock!

The markets are off a skosh in early going, following a report that showed wholesale prices rose 0.3% in July, higher than expected.

You know the drill.

This is short-term noise and has no impact whatsoever on the ownership case for the stocks we follow (which is kinda the reason we keep a pretty short list).

In fact, I think the markets could actually end today’s session in the green.

Here’s my playbook.

Wholesale prices: What will the Fed think??!!

It’s the same old story.

Inflation’s hot, [stock] prices are not. (Read)

Inflation isn’t really about prices but is, instead, about what everybody thinks the Fed will do next based on the reading du jour.

In that sense, it’s a Keynesian Beauty Contest—an expression coined by economist John Meynard Keynes and introduced in his seminal 1936 work, The General Theory of Employment, Interest and Money, to explain price fluctuations in equity markets.

Normal contests work based on how the judges view contestants, but a Keynesian Beauty Contest is based on how the judges think the other judges will react to the contestants… only none of them actually look at the contestants.

The way to beat this is simple.

Buy the best, ignore the rest… because the judges are often clueless short-term thinkers.

Goldman goes to Asia, via Starling

This catches my attention.

Goldman Sachs is apparently launching Starling in Asia. If you’re not familiar with Starling, it’s a Goldman-backed digital bank with aspirations as banking-as-a-service platform. (Read)

Normally, something like this would be customer oriented, but Goldman says that this launch is specifically oriented at small and medium-size enterprise accounts rather than personal banking services. That makes sense because it helps Goldman but doesn’t require Asian banking licenses.

Unfortunately, Starling is still private.

The other avenue is to buy Goldman, which presumably will step up, but that doesn’t interest me because there’s so much legacy baggage.

Meanwhile, there’s another bank I like even more, and it’s one that OBAers have owned for a while that’s already doing a tonne of business in Asia. It’s returned nearly 25% since I brought it to their attention versus the S&P 500, which has tacked on 6.37% over the same time frame, according to Eikon as of yesterday’s close. Upgrade to Paid

Palantir: This pullback is a gift

It’s nice to have company.

My friend and colleague, the fantastic Dan Ives of Wedbush Securities, recently called Palantir the best “pure-play AI” company out there. (Read)

I agree—and have for a long time, as you know.

The recent pullback is a gift.

Don’t blow it!

“Biggest scam of modern times”

That’s what Canadian Dalbir Bala says about EV vehicles after buying his Ford F-150 Lightning EV for $115,000 plus tax. (Read)

He had to spend another $10,000 upgrading chargers at home and at work, plus another $6,000 to upgrade his home electric panel. All told, $130,000… plus tax.

But the real challenge came when he took his truck on a 1,400-mile road trip. His first stop in Fargo, ND required 2 hours and $56 to charge from 10% to 90%... then gave out again after just another 215 miles. Yep... more than dinosaur juice.

I’m not surprised—and if you’ve been reading/watching me for any length of time, you know I’ve made this point numerous times on national television.

EVs are inevitable in one form or another, but they’re simply not ready for prime time. If they were, they’d cost $20k and get 1,000 miles a charge. Customers would be running to them, with no subsidies required whatsoever.

I want to like Ford—I really do—but the company just can’t seem to get outta its own way.

I’m glad I sold my shares.