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☕️ D-Wave: Should you buy it?

May 20, 2025

Howdy 👋

The S&P 500 looks set to snap an impressive 6-day winning streak.

Bring it!

The markets are repricing risk and that spells opportunity.

Especially now.

I say that because the bond yield to equity yield correlation that is normally close to 1 is practically 0 at the moment which means that the market's usual risk-reward signals are broken. Or at least on holiday lately.

Put another way, bond yields are screaming danger, but stocks aren’t listening.

Historically, this kind of disconnect doesn’t last.

You can bet stocks catch a bid or bonds do.

My money’s on the former.

Here’s my playbook.

1 – What if Jamie Dimon is right?

JPM's CEO Jamie Dimon thinks that the markets are way too complacent. (Read)

What gives him pause?

Dimon’s watching earnings—and he’s betting they’re heading lower. He’s also concerned about deficits, tariffs, and what he sees as central banks asleep at the wheel - an opinion I share.

Should you worry?

That depends on what you own.

If it's the broader S&P 500, probably.

If it's POS stocks, definitely.

If it's world class names like those we speak about frequently, hardly.

Look, I know it's a big call.

Dimon sees more deal flow, balance sheets, and executive dashboards than almost anyone alive but here’s the part I really want you to take away.

Dimon isn’t panicking—he’s preparing just like he has dozens of times over the years.

If I know Dimon half as well as I think I do, I'd be worried if he didn't say something right about now.

If earnings come down, so will prices and that’s not a reason to run but to tighten focus on great companies with pricing power, fortress-like balance sheets, real moats, and mission-critical value.

I told you Sunday that traders are repricing risk... and now Dimon's effectively telling you the same thing. It’s not often I get to beat him to the punch – hooyah!

As always, it's an opportunity for investors who are paying attention.

2 – D-Wave: Should you buy it?

Shares of D-Wave Quantum jumped more than 27% after unveiling their new Advantage2 system—supposedly their most advanced quantum computing platform yet.  (Read)

That’s a ginormous number… but it’s important to remember we’re taking bout a $16 stock which works out to a $3.51 move you’d get in an hour with a choice like Costco, just to pick a name at random.

CEO Alan Baratz called it an engineering marvel - and I don't disagree.

However, while D-Wave’s flex is impressive, they’re still a few qubits short of being king.

The game is still early innings.

Quantum computing isn’t just sci-fi anymore—it’s the engine under the hood of next-gen AI, drug discovery, climate modeling, national defense, and a dozen other industries you haven’t even remotely thought about yet.

My take?

Forget the headlines—follow the plumbing.

The real money won’t be made chasing 30% pops like an over-caffeinated day trader…. although – to be fair – that can be really fun when you get it right. 💯

It'll be in the infrastructure—chips, cooling systems, and raw power keeping quantum alive and humming... consistently.

Personally, I prefer different quantum names like those we talk about in One Bar Ahead® and will be circling back to soon... because I think they’re considerably farther along the line to commercialization and have more viable tech. But that's just me.

The point I want you to think about from an investing perspective is the same one that stopped CNBC anchor Kelly Evans cold a few years ago when I said that AI isn't just another tech wave but very likely the “biggest investing theme in recorded human history” – a narrative, not for nothing, that others have begun to parrot.

Good… every time they do it’s more money coming into stocks smart investors already own.

I hope you're on board one way or another.

3 – Unka Elon pinky swears to stick around for at least 5 years

TSLA is up more than $10 a share as I type—on news that Elon Musk has pinky-sworn to remain CEO for at least five more years, demand is growing (everywhere but Europe naturally) and that FSD has no regulatory barriers Down Under. (Read)

Investors love it even though it’ll probably give some of that back.

Me, too.

Having the world’s most innovative—albeit controversial—genius at the helm is exactly what fuels the kind of long-term rocket ride into AI, robotics, energy, and autonomous transport that most CEOs wouldn’t dare attempt.

You know the drill.

$500 a share just got a whole lot more likely, imho.

4 – 3D printing gets a Palantir upgrade

I’ve long maintained that 3D printing will radically change our world when it gets to scale and we can move from cheap plastic toys on home printers to serious industrial level parts.

Guess who just entered the game?

Team Karp has just announced a new partnership with Divergent Technologies, (aka Divergent 3D), the company behind DAPS—an end-to-end “factory in a box” that combines AI-generated design, industrial-scale 3D printing, and robotic assembly to churn out aerospace - and auto-grade parts on demand. Lighter. Faster. Cheaper. (Read)

Now that tech is being embedded directly into Palantir’s Warp Speed platform, giving defense and commercial users the power to spot supply chain threats and instantly launch just-in-time production of mission-critical components.

That’s a game-changer—and another step in Palantir’s push to become the operating system for modern manufacturing.

Karpus Maximumus.

Btw, history suggests there are 10-15 “Palantirs” out there at the moment which is why it’s your job as an investor to find ‘em. The OBA Family already has a few on deck, in case you’re wondering and would like to join in on the hunt. You know where to find me if that’s of interest.

5 – Why Moody’s US rating follies are cratering Japan’s bond market

Yields on Japan’s super-long government bonds (30- and 40-year) just spiked to record highs—a sign that the market is starting to lose patience with fiscal overreach, even in a place like Japan that has long defied debt gravity. (Read)

The 30-year yield jumped 17 basis points to 3.14%, and the 40-year soared to 3.6% after a weak auction sparked a selloff.

翻訳 (Translation): The market just sent Japan a warning shot.

Demand is drying up, and investors want more compensation to take on long-duration risk in a country with heavy debt and no clear fiscal consolidation plan.

But here’s the kicker.

What most investors don’t realize is that Moody’s U.S. ratings reset is a key part of what’s driving this.

Let me explain.

When Moody’s questioned the U.S. fiscal trajectory and outlook, it triggered a broader rethink of sovereign debt globally. Big bond investors started asking themselves: If Uncle Sam’s not bulletproof anymore, who is?

US Treasuries are the benchmark global standard for “risk-free” debt… so if US yields rise because traders demand more here, that reprices everything else, especially developed sovereign nations like Japan which have relied on even more aggressive fiscal stimulus and central bank support.

The Bank of Japan may now be forced to pause or slow its quantitative tightening, but as one strategist put it: there’s only so much central banks can do before they risk losing policy independence.

Funny enough, I’ll be talking about this with the venerable Scott Shellady—aka “The Cow Guy”—later today on RFD-TV. I hope you can tune in and join the conversation!

Keith’s Investing Tip: Defensive names could look a whole lot more attractive, particularly if they are low-beta, high dividend choices like those I share regularly with the OBA Family. Both in Japan and in the US stock markets.