☕️ Buy Novo and what to do about gold?

Howdy! 👋

And poof, just like that the rally is over. 🤦‍♂️

Or so the media would have you believe with stories earlier this morning.

We know better.

The markets are down this morning for reasons we have discussed countless times…

Because highly leveraged shot-term traders determined that a “hot” GDP report lessens the Fed’s propensity to cut and, by implication, that means they can’t borrow as much money to ply their trade – pun absolutely intended. So they’re selling to lessen the “vig.”

My guess is they’re higher by the time you read this.

At the risk of sounding like a broken record…

Rates are for traders; profits are for investors.

Here’s my playbook.

1 – US economy grows at 4.3%

We live in a really screwed up world.

The US economy just grew at 4.3% and the markets are selling off ahead of the open?!?! (Read)

It’s a sign of the times.

Remember when good news used to actually be good news?

I do.

Fortunately, that hasn’t changed if you understand something we talk about frequently.

Good news is actually good news for smart investors who can see past the noise because 4.3% means revenues and profits are also on the uptake.

Traders will often flush the weak money ahead of the opening bell in a massive head fake that you do NOT want to fall for. At least most of the time anyway.

Keith’s Investing Tip: Short-term market noise has nothing to do whatsoever with the business case for owning the world’s best companies. Period. So take advantage of the “sale” every chance the market hands you one.

And if you don’t know what to buy, why or how… I’ve got a few ideas that may be helpful if you’re as serious about building wealth as I am.

2 – Gold at record highs (again)

Gold has hit another record high for the second day in a row. (Read)

Honestly, it’s driving me nuts.

I’ve expected gold to go down, perhaps even by half, for some time now but the markets clearly have other ideas.

What now?

Here’s the thing.

The trade is still crowded; the institutions are still parking assets as collateral and the short-term go-fast crew is levering up… all of which make for a super high risk “trade” rather than an investment to my way of thinking.

I’ve seen way too much manipulation during the course of my career to let my guard down.

Don’t get me wrong, I’m super happy for everybody who owns it but am more than content to stick to my knitting (and a considerably lower risk profile).

Gold rallied under very similar circumstances in 1979 only to fall by 50% by 1982… a scenario I a) remember vividly and b) see repeating itself eventually when tariff tantrums and geopolitics settle down.

Meanwhile, I’ve got two words for anybody throwing caution to the wind.

Take profits.

And if you want to stay in the game, good on ya! 💯

$3,500 which, as crazy as it sounds, is still well within statistical norms btw.

Keith’s Investing Tip: When something feels obvious and crowded, risk usually isn’t where you think it is.

3 – Dessert first, diet in a pill – is there a turnaround in the offing?

Novo Nordisk shares have jumped after the drugmaker wins US approval for its weight-loss pill. (Read)

Is there a turnaround in the offing?

Good question.

I don’t think so on anything other than a short-term basis.

Shares are down 40.25% YTD after rising competition, profit warnings, sliding sales and just general malaise.

In other words, what’s happening looks more like a “trade” than a long-term investment choice.

First, weight-loss drugs capture the public’s attention but they’re like a knife fight. Margins contract when everybody shows up – meaning the competition.

Second, a pill is not a moat. Sure, it lowers barriers to entry and speeds adoption but what’s easy to take is even easier to copy.

Third, Novo has known this was coming but chose to warn about profits anyway. In other words, management knows there’s pricing and profit pressure.

Keith’s Investing Tip: When Wall Street serves dessert first, check the nutritional label.

I’m more tempted to fade the trade and stick with what I consider to be dramatically better medical profit potential (and the dividends that come with it). I’m kinda funny that way. 🤷🏻‍♂️

Putskies (and buy the best dividend medical/pharma stocks)

4 – Bourbon bust a sign of bigger problems or a new game in town?

This one is interesting to me on a few levels.

Consumers generally drink more when times get tough but Kentucky’s $9B bourdon industry is struggling as whisky production has reached the lowest levels in years. (Read)

Things are so bad that Jim Beam, one of the leading producers, has closed its Clermont facility production line while making unspecified improvements.

This is like KFC closing fryers - hard to imagine.

However, I also see an opportunity.

Non-alcohol spirits continue to grow, in some cases dramatically – pun absolutely intended.

IWSR estimates global non-alcohol spirits sales were up roughly 20% and tracking similar growth into 2025 / 2026. Premium zero-proof cocktails and functional beverages, in particular.

Potential investments include names we’ve talked about in the past: Diageo (DEO) for optionality, Constellation Brands (STZ) for distribution leverage, and Coca-Cola (KO) or Pepsi (PEP) via functional and zero-sugar adjacencies — albeit with dramatically less needle-moving potential than something like AI.

Keith’s Investing Tip: Choices are not either or, a common mistake many aspiring investors make. Your portfolio should be very focused and reflect YOUR unique goals. Not some pre-canned model based on a bunch of baloney and flawed statistical data based on where the world used to be.

5 – Grok: Pentagon chooses results over noise

I invest in the best and avoid the rest for a very specific reason.

I want the best (results).

Grok fits the bill and is – imho – head and shoulders above other AI engines we use for research in our office. That’s why I was glad to see that the Pentagon has chosen Grok, both as an investor and a military family.

Situational awareness is everything when it comes to AI, especially for our warfighters who need to process mind-boggling amounts of information to do their jobs well. (Read)

To be fair, there are still a huge number of people who go apoplectic when they hear Musk’s name - I get it. And to be clear, I respect that.

Here’s the thing.

Contrary to what a lot of people believe, history (and investing) are not about “likes and dislikes” which is why every investor must come to terms with what’s happening even if it doesn’t match up to their perceived version of reality.

I’ve invested in a lot of stocks I don’t “like” over the years if I can make the case that doing so is prudent. And I’ve avoided others where I can’t. You probably have too.

The choice is simple.

Invest in what works and adapt or accept falling behind.

There’s no 3^rd door.

Keith’s Investing Tip: You don’t have to “like” the companies you own; you just need a portfolio of choices capable of winning the race.

Bottom Line

Investing is about focus, not noise.

• Plan
• Execute
• Repeat.

And with that, I am signing off to spend Christmas with the Family.

As always, let’s MAKE it a great day.

You got this – I promise!

Keith 😀