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What Musk knows that investors don’t

Oct 06, 2023

Good morning! 👋

A strong jobs report sent yields higher and right on cue, futures tanked.

It would be comical if it weren’t so sad.

We live at a time when good news (like the fact that more families are going to eat because they have jobs) has become an excuse to send the averages lower (because the Fed cannot grasp the damage it’s doing).

Here’s my playbook.

Powell’s lunacy = the emperor’s new clothes

Futures dropped off a cliff almost immediately when the jobs reports hit. Payroll increased by 336,000 in September, much more than expected.

Not to beat a dead horse here, but who expected? (Read)

This is a joke, and a very bad one at that.

Powell’s lunacy reminds of The Emperor’s New Clothes, a famous literary folktale by Hans Christian Andersen about a vain king who is exposed before his subjects.

Blast shields up.
Buy list at the ready.
Going shopping!

6–7% inflation, yeah right, Mr. Chairman

TikToker Tom Collins filmed himself walking around Costco comparing prices of items he says have skyrocketed since last year. (Watch)

My experience matches up.

The 6%–7% we keep hearing about from the Ministry of Whitewash is more like 50%, 75%, or even more, depending on what products we’re talking about. At least in my neighborhood anyway.

Stretching for yield is the obvious temptation as this continues, but the better choice is to concentrate on stability, especially when it comes to cash.

I have an idea… and I’ll be sharing it with the OBA Family later today in the October issue, which should hit your email a few hours from now. Keep an eye on your email!

If you’re not yet on board and would like to be, I’m here and would love to earn your trust, goodwill, and business. Upgrade to Paid

What Musk knows that investors don’t

Tesla cut prices on some Model 3 and Model Y versions in the US. (Read) Shares have sold off on the heels of the company missing analyst expectations.

And what’s wrong with that?

Two words… analyst expectations.

Do you really think Wall Street analysts know Tesla better than Musk and his team do? That’s okay if you do, but I’ve got a bridge to sell ya if so.

Musk is playing chess while anybody spooked by this news is playing tiddly-winks.

Remember… Musk enters this battle with far higher margins than competitors, so cutting prices is a way to maintain market share and market dominance. Everybody else is playing catch-up.

What’s more—and this is the important part—Musk doesn’t care what Detroit thinks. Nor does he likely give a rip about German, French, or Italian makers either. Same with the Japanese and Korean car companies.

Unka Elon is focused on maintaining his lead versus the Chinese, including XPEV and BYD specifically. He knows—like we do—that they’re the real threat 3–5 years from now.

Tesla plans on delivering 1.8 million vehicles this year.

I’m going shopping!

Cash-Secured Puts could be super juicy this morning, as will the stock itself.

Apple can save Bing for $15B

This is one of the most interesting takes on the search wars that I’ve seen in years.

Microsoft CEO Satya Nadella testified in the Google antitrust trial saying—and I’m paraphrasing here—that Google is great at being great. Google’s lawyers retorted that there was nothing wrong with building the best search engine, and I agree with that. (Read)

Here’s where it gets intriguing.

Nadella also acknowledged that Bing pretty much sucked but that he’d be willing to lose up to $15B a year if Apple were to switch to Bing. Nadella even went so far as saying he’d be willing to white label—meaning hiding the Bing brand from Apple users’ search engines AND respect any of the company’s privacy wishes.

The only reason Bing can’t gain entry, Nadella posits, is because Apple fears that Google would react punitively, teaching users to circumvent Safari entirely by relentlessly promoting Chrome.

Fear, in fact, is what keeps Apple and Google together, claimed Nadella.

Talk about throwing down the gauntlet!

BTW, I mentioned more than a decade ago that Apple and Microsoft should team up when it became clear to me that Microsoft’s mobile phone ambitions were doomed. But I had NO idea that this concept would resurface the way it has.

WOW!!!!

Can you imagine what this would be worth to both Apple and Microsoft.

A “lot” doesn’t begin to cover it.

Please join me for a conversation with Liz Claman

I’m looking forward to a great conversation with the super-savvy Liz Claman later today at 1500EST on Fox Business Network.

We’ll be talking about money, markets, jobs, the Fed, and more. Plus, I’ll share my take on today’s market action as we head into the last hour of the trading week.

It’s an honor to be invited back every time and to know that you’re watching. 😊💯