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☕ An AI stock that isn't NVDIA.

Jan 04, 2024

Good morning! 👋

The headlines are trumpeting “failure” and misery.

One popular news site that shall remain nameless this morning has a red crawler at the top of its webpage proclaiming, “BREAKING - Nasdaq falls for a fifth day as Wall Street struggles to recover from early 2024 malaise.” Then, it promises “live updates.”

Ooooooooo… shiver me timbers.

Not.

I’ve been involved in global markets for 43+ years, and if there’s one thing I’ve learned in all that time, it’s to turn off the noise.

Investing is only a struggle if you make it that way.

So don’t!

At the risk of sounding like a broken record, headlines like this are designed to lure you in so you click on various links that get sucked into the news du jour – all of which is intended to make the company money, not you.

Take a deep breath.

Focus on your money and what YOU want to accomplish with it.

Why?

Personal finance expert and host of the super inspiring Women & Money podcast Suze Orman puts it far better than I ever could.

“You are never powerful in life until you are powerful over your own money.”

To which I respectfully add, especially when you can learn to look beyond the hype-driven headlines and focus on world class companies and the stocks that will be there when YOU need ‘em.

Here’s my playbook.

1 – Like this is a surprise - “Fed’s still waiting”

We got the Fed’s notes yesterday and Team Powell still has no idea when it’ll cut rates. It’s waiting for the economy to “evolve.”

Into what??!!!

As I noted during a recent interview on DubaiEye (Watch), the Fed has the same problem it’s had for a while now… they’re reacting to busted, antiquated models with bad data that they view through the rear-view mirror. There is no strategic, forward-looking thinking whatsoever.

Investors have a choice.

You can sell everything and head for the hills which would be penny-wise but pound foolish; or,
You can use the swoon to pick up shares in world class companies that have been taken lower through no fault of their own and for which the ownership case is stronger than ever like oh, I dunno… world class tech companies we talk about frequently.

Keith’s Investing Tip: Blather like this from the Fed does not interfere with the business case for owning great stocks one bit. So, knowing this and as long as that’s true, you can use the swoon to confidently add to positions in fabulous companies with fortress like balance sheets that make “must have” products and services, which have the ability to protect margins and grow sales anyway. It’s a very short list.

2 – Fed’s nonsense + conflict = a potential stock rotation

Carriers have already diverted more than $200B in trade from the Red Sea where Iranian backed, Yemen-based Houthi militants are attacking shipping. Meanwhile, Libya has shut down the Sharara oilfield.

I hope you’re on board with an energy stock or two because the Fed’s nonsense + conflict = a potential stock rotation.

My favourite has returned 5.19% over the past month versus 2.52% from the S&P 500 over the same time frame. Plus, it’s got an amazing 10.58% shareholder yield that positively skunks the competition.

If you’d like to learn more, you might enjoy One Bar Ahead®, my paid research journal for individual investors in search of a way beyond the noise. And if you’ve got this covered, excellent!!!

MyPOV: Beginning investors often think in terms of one and done, as in they buy a stock and that’s the end of it. Not surprisingly, many get frustrated whenever the stock they’ve chosen doesn’t go their way. Don’t! Instead, think about the stocks you own like a collection of fine wine, some are drinkable now, but some must age. It’s a lot tastier proposition. 😊 🍷

**3 – An AI company that isn’t NVDA**

Samsung is teasing the release of a new phone that will give users an “all-new mobile experience powered by AI.” (Read)

Is this just “me, too” or is there something really there worth your time?

The company says that its newest Qualcomm chip-powered offering will be able to run “generative AI” straight from the phone. Which, in plain English, means you will be able to do cool ___ using any prompt that you give it.

I’m skeptical.

Unless there’s a phone that’ll make me breakfast, I don’t really see the use case. Then again, I am approaching card-carrying status in the over the hill gang, too.

What do you think?

4 – Should you buy PayPal right now?

I evaluate thousands of data points a day, most of which go in one ear and out the other. The Internet is funny that way which, of course, is a story for another time.

This caught my attention.

28% of Americans trust digital payments more than cash and credit cards
85% of ‘em say PayPal is their preferred digital payment service

Should you buy it?

The stock is down materially from a high of $300+ dollars a few years ago and scraping along at just $58 and change. Payment volumes are going up and repeat usage is increasing.

I could make the case that it’d be a good speculative bet if you’re into that sort of thing.

Hmmm.

Keith’s Investing Tip: Buying stocks is a constant series of tradeoffs. In this instance, you could pick up shares of PayPal itself, but you can’t buy Apple Pay directly without going through Apple. The question you’ve got to ask yourself is the same one I ask myself… which stock offers the most direct path to where I want to go? And, in case you’re wondering, there is no wrong answer. 😊