☕ AMD – buy before or after earnings?

Good morning! 👋 

The media is reporting a market reset driven by Palantir, but I think the real move has yet to happen. 

Keep your guard up.  

Why? 

The Dow has gone green but the S&P 500 and the Nasdaq are both red as I type. 

The Dow is a price-weighted index comprised of 30 old-line, blue-chip industrial companies — the kind of names traders tend to rotate into when they want perceived safety and stability. 

In other words… 

When risk gets uncomfortable, traders tend to buy the Dow stocks to shed risk… while buying both the tech-laden S&P 500 and the Nasdaq when they’re taking on risk (and buying growth). 

That’s why a green Dow alongside red tech isn’t a victory lap. At least not yet, anyway. 

Money is still playing defense under the surface. 

No matter which way the indices go today, remember this. 

Short-term fear always makes long-term opportunity cheaper. 

Here’s my playbook. 

1 – Palantir: what’s next? 

Palantir knocked the leather off the ball with one of the single strongest earnings reports I’ve ever seen during 4+ decades in global markets. (Read) 

And based on what I posted last night, there’s still plenty of skin in the game. 

What’s next? 

His Excellency Big Shortimus Maximus – aka Michael Burry – and other short sellers are still out there. They don’t give up easily, even though they’re on the wrong side of history. 

I would not be surprised in the least if the SEC were to find that they’re colluding, but that kind of stuff is very, very difficult to prove. 

Meanwhile, expect more volatility. 

And, as always, plan on using it to your advantage. 

Speaking of which, and on a related note. 

People are constantly telling me that so-and-so said blapidy blapidy blah about whatever stock. Respectfully, I don’t care. Investing isn’t a competition, nor is it a popularity contest. – and if you’re investing like it is, you will lose. Guaranteed. 

Keith’s Investing Tip: Investing is about meeting your goals and your objectives. Besides, if everybody thought the same way about every stock, there would be no opportunity whatsoever. The fact that people think differently about the same stocks is what creates profit potential. 

And if you know how to do that, GREAT! If not and you’d like some help, you know where to find me. People tell me that what they’ve learned about how the markets really work and which stocks to buy, when and how has changed their lives. 

Btw and speaking of which if you’re an OBAer, please check your email for a special sell alert that went out earlier this morning. 

2 – SpaceX + xAI = unprecedented profit potential 

People are already screaming about the $1.25 trillion price tag because it’s the biggest merger of all time. 

Let ‘em. 

The real point is that Musk is one of very few people on the planet who understands the real competition at hand… China’s integration of all things data and AI.  

I can’t wait to get my hands on a few shares. 

Meanwhile, it’s Tesla all the way and what I see as an impending merger that is now a matter of when, not if. 

Keith’s Investing Tip: People made fun of me for years when I began talking about Tesla’s trajectory beyond cars. They’re not anymore. In fact, that narrative has caught on big time.  

You know what to do. 

I hope. 

3 – FedEx upgrades? Good luck with that! 

Wells Fargo and Bernstein both upgraded FedEx ahead of its investor day next week, which tells you more about Wall Street’s lack of imagination than it does about the future of commerce. (Read) 

Bluntly, good luck with that. 

Think about this for a second. 

How much money is there to be made by moving packages in a world that is increasingly working at light speed? I mean, really???!!! 

Buy the best, ignore the rest.® 

4 – AMD: buy before or after earnings? 

AMD reports earnings today after the bell. You can watch the fireworks here. 

I’m very excited for a number of reasons, chief among which is that this is one of those “expectations matter” moments.  

Should you buy before or after earnings? 

That obviously depends on your risk tolerance, circumstances, and objectives (none of which I know). 

Here’s the thing to think about. 

In contrast to Palantir, which big money set up for a rip by scaring the tarnation out of most investors via a sustained drop that trick ‘em in the selling, AMD has been bid up. 

My expectation – given my perspective - is for a post-earnings drop. 

Trade Idea: Tactically speaking, this suggests a 1-2 punch… as in buy a few ATM puts very near the end of the trading session, then sell cash secured puts at the opening tomorrow to harness additional volatility and finally, to scoop up shares at a discount. 

Hmmm. 🤔 

5 – This could finally clobber Meta 

Prime Minister Pedro Sanchez says Spain will ban social media for the under 16s. (Read) 

What catches my attention, and is far more important, though, is that Spain will hold leaders of tech firms legally accountable for harms to users. 

About time, imho! 

I agree with the good Minister. 

Social media has become a failed construct where crime is tolerated in the name of revenue, where laws are ignored, and where otherwise rational, polite people rip each other apart with no consequences. 

I’ve long believed that Silicon Valley’s elite foisted something on the world and have never taken responsibility for their actions. 

Which companies are most at risk? 

Meta. 

• Criminal activity revenue may account for as much as 10% of overall top line according to some reports. (Read) 
• Not only does El Zucko repeatedly dodge accountability, but he and his leadership team are knowingly, willingly letting millions of people be harmed by predatory, criminal activity taking place on Meta properties including Facebook and WhatsApp. 
• Meta’s own internal documents show that its platforms were involved in 1/3rd of all successful scams in the US. The FBI 2024 Internet Crime Report cited $16B in losses from Internet crimes. 
• A UK regulator found that Meta products were involved in 54% of payment-related scams in 2023, more than double all other social media platforms combined. 
• Meta internally projected $16B or roughly 10% of its 2024 revenue from ads tied to scams, banned or illegal goods, fraudulent e-commerce investment schemes, illegal casinos, and counterfeit medications. And mind you, this is from Meta’s ad revenue, not direct victim losses. 
• Seems pretty damning to me. 

Bottom Line 

Buying great stocks on sale never goes out of style, even if you aren’t getting a “rock bottom” price. 

As always, let’s MAKE it a great day and start to the week.  

You got this — I promise! 

Keith 😀