☕️ AI: the winner everybody else has written off

Howdy! 👋 

Yesterday all new time highs… this morning, a pull back. 

That tracks. 

OpenAI’s report is knocking chip stocks and UAE news is knocking oil. 

The amount of leverage applied to both has to reset and, with it, all of the stocks that feed off both.  

It’s totally understandable that traders are selling… and smart investors are buying. 

I hope you’re amongst ‘em for one simple reason. 

Missing opportunity is always more expensive than trying to avoid risks you can’t control. 

 Here’s my playbook.  

1 – AI: One company could take it all (and nobody but us sees it coming) 

I was thrilled to be invited back for a conversation with the super-savvy David Asman this morning to handicap tech earnings and more. Plus, my take on which company could be the surprise winner in the AI wars. Plus, oil and where I think prices go next. (Watch) 

2 – Um, who’s he kidding???!!! 

The head of Norway's sovereign wealth fund – a smart guy named Nicolai Tangen – went on CNBC this morning and said it's "not a stock picker's market." (Read) 

I about fell outta my chair laughing. 

He couldn’t be more wrong. 

Here’s the part nobody wants to talk about in polite conversation. 

When you're managing $2 trillion like he is, you have to index because your fund is so big that you are the market. You can't concentrate. You can't be nimble. And you sure as heck can't buy a mispriced stock and move the needle. 

What people like Nicolai Tangen don’t ever want to acknowledge is that just 4.3% of stocks – roughly 1,092 companies out of more than 25,000 studied since 1926 - have created substantially ALL 100% of the wealth over the past 100 years. 

And the rest? 

Well, let’s just say that the other 96% collectively did no better than T-bills. 

YOUR job as an investor is to find the 4% and latch on. 

Or - if for whatever reason you can’t or don’t have the time - to find something or someone who can help you do that. 

If that's me, fabulous. Investors from around the world tell me that what they've learned right here in the 5 with Fitz and/or as a member of the One Bar Ahead® Family has changed their lives and given them newfound confidence in the markets. Often for the first time. 

If it's somebody else, that's cool too. 

The pie is plenty big enough… just do me a favor and be sure it's somebody who knows what they're doing and who has actual market experience. 

Here’s why. 

A study from the Swiss Finance Institute analyzed more than 29,000 financial influencers – furus - and found that 56% gave money-losing recommendations. Not coincidentally, the ones with the biggest audiences tended to be the worst offenders, generating negative 2.3% monthly returns for the people who followed them.  

3 – The end of Harley? 

I do a lot of thinking when it’s just me and the road. 

This past week, for example, I learned in the middle of the high desert that Harley has spent something on the order of $300M on EV motorcycles one way or another. 

So? 

Last year, LiveWire – Harley’s EV bike spinoff – sold 653 electric motorcycles worldwide which works out to a paltry $6.1 million in revenue… total. That means the company loses roughly $88,000 on every bike it sells. 🤦‍ 

LiveWire Group stock sits at just $2 a share, down ~87% from a 2023 peak of $12.29 give or take. Absent an infusion, I think it’s gone in 12 months, perhaps 24.  

Harley, meanwhile, isn’t in the position to do any infusing imho. Shares are ~$23, down ~50% from a 2023 peak of ~$50. As much as I love the brand, I think Harley’s days are numbered. 

Putskies or at least avoid the stock, even if you love the bikes. 

The irony couldn’t be more stark.  

Harley spent $300M+ betting on a future core customers never wanted. Seems to me that both the house and the bet are now under pressure.  

Doh! 

4 – UAE says adios to OPEC 

I've talked about the "prisoner's dilemma" many times over the years. 

If you're not familiar with it, the prisoner's dilemma is a classic philosophy problem that shows why two parties acting in their own self-interest will often betray a cooperative agreement — even when sticking together would benefit them both more.  

The lesson? 

Group loyalty only lasts as long as it serves both or until one betrays their partner for individual gain. 

UAE leaving OPEC this morning is a real-world, real-time example of the latter. (Read) 

Not coincidentally, the exit frees the UAE from group production quotas — meaning it now has greater flexibility to increase output and expand its role across crude, petrochemicals and natural gas markets. 

And not surprisingly, UAE officials signaled the shift is aimed at positioning the country for long-term global energy demand growth. Not to mention making gobs of money. 

Smart. 

I know which oil company is best positioned and which one has the most efficient balance sheet when prices drop — and they very likely will when the UAE kicks it into gear. 

Do you? 

If not, take a moment. 

Your portfolio will thank you. 

Keith's Investing Tip: Sometimes the smart move is to figure out who's holding you back and which companies could help you move forward. In life, in oil, and in your portfolio. 

5 – Your brain deserves better 

Motivation guru Tony Robbins says that the quality of your life is the quality of your mind. 

I agree. 

And I’ll add — the quality of your decisions is directly related to the quality of your focus. 

Think about what you've read in today's newsletter or on the Internet today already alone. Iran. OPEC falling apart. Drug wars. Brand credibility crumbling.  

Every one of those stories demands clear thinking — and that's hard to come by when the noise never stops. 

Your biology is working against you and so is social media which is deliberately designed to foment hype, worry, fear and more. 

Our brains were never built for this. 

So I’ve spent 15 years building something to help and now, finally, we have the computing power to launch it via the web. And shortly, via an app when the chips catch up to the power needed. Apple… are you listening? 😀 

It's called MindCalm™ — an AI-driven soundscape app I designed specifically to shift your brain into one of four states: deep focus, calm, rejuvenation, and sleep. The more you use it, the smarter it gets. 

I use “MindCalm” every single day – then again, I built it for my own use.  When I'm writing, when markets are volatile, and when I need to shut down the ol’ brain bucket at night. 

I had no intention of getting into the “app” business but scores of people who tried it convinced me that they’d like to have access… so here we are. 

You can try it and buy it if you’d like. Or not. 

Either way, here’s the truth. 

The world won’t slow down any time soon but you can help your brain get clearer, calmer, and sharper anyway. 

Keith's Investing Tip: The best investment tool you have isn't on Wall Street. It's between your ears — and it needs maintenance just like everything else. 

Bottom Line 

People constantly fawn over the headlines which seems to make a lot of sense. 

Only it’s not true. 

The biggest, best and potentially most profitable stories for investors are almost always found on the “back page” where very few people are reading along and before the herd realizes what they’re missing. 

Know what everybody else is missing by reading in “reverse” – then get your money there first. 

As always, MAKE it a great day. 

You got this – I promise! 

Keith 😀