☕ Is it okay to go to the sidelines? Yes, but…

Howdy! 👋 

Sorry for the delay today everybody and thanks, in advance, for understanding!  

I’ve been working on a major new project for some time and needed to meet with our team this morning to button up some important details that will be critical when the time comes. 

I can’t spill the beans just yet, but let’s just say we’re on the home stretch if everything goes according to plan. 😀 

Now to the markets and an abbreviated 5 with Fitz… 

I sent out a special trading alert this morning to the OBA Family because I didn’t and still don’t like today’s trading action as I type. Hopefully you had an opportunity to act if that’s of interest. 🎯 

Meanwhile, and if you’re an investor, it’s very much business as usual.  

You know the drill. 

We’re not here for the dental plan… 

• Set goals 
• Have a plan 
• Execute and Adjust 
• Repeat 

Here’s my playbook. 

1 – Bill Ackman agrees with me 

It’s always nice to get validation. 

This time, from billionaire investor Bill Ackman who said in an X post on Sunday… “one of the best times in a long time to buy quality. Ignore the bears.” 

Gee, where have I heard that before… but I digress!!! 😀 

Sadly, the vast majority of investors won’t, and predictably, will get left behind yet again. 

Shame. 

History is very clear.  

There are some truly generational buys at hand including one that I just mentioned yesterday during an extended sit down with the fabulous Suze Orman on her podcast, Women & Money. Plus, two others that are great for dividends and security, too. You can watch that here if you haven’t seen it yet. 

Keith’s Investing Tip: If you’re not investing when the chips are down, you can’t possibly be ahead when they’re up. 

2 – 30% of Drivers Are Underwater… and Nobody’s Asking Why 

Three out of ten buyers now owe more than their car is worth, with the average hole sitting at $7,214. That’s a debt treadmill where people buy, drive, lose money, then roll the balance forward and do it all over again. (Read) 

What Wall Street still doesn’t get is what happens next.  

The entire equation changes when your car stops draining cash and starts producing it. 

Tesla’s robotaxis will turn idle cars into earning assets, which means the same vehicle sitting in your driveway (and anybody else’s for that matter) goes from liability to potential income stream at the touch of a button. 

Big car makers are on borrowed time, and so are Uber and Lyft barring a complete change in their business model. Imho. 

Btw, if you’d put $1,000 into Ford when Tesla IPO’d on June 29, 2010, you’d have ~$1,650 today roughly a 65% return give or take. But if you put $1,000 into Tesla when it IPO’d, you’d have ~$2,270,000 – roughly a 226,900% return. 

As much as I personally love Ford’s products – the GT40 and the Maverick in particular – it’s a bug in search of a windshield when compared to Tesla. 

3 – Is it okay to go to the sidelines? 

I’m getting that question a lot lately as you can imagine. 

Yes… 

• If you are investing money you can’t live without – which you shouldn’t be doing in the first place, but a lot of people do anyway.  
• If you don’t have a safety fund built up (I advocate 2+ years, not just the 6-12 months commonly bandied around). 
• If your behavior is becoming the risk… meaning that you are checking quotes every 5 minutes, losing sleep, making impulsive trades and so on. 

Here’s the part people don’t want to hear.  

The markets will not ring a bell when it’s safe to get back in. The biggest up days tend to cluster around the biggest down days.  

Miss a handful of ‘em and your portfolio is gonna get kneecapped.  

For example, Fidelity found that a hypothetical $10,000 invested in the S&P 500 and left alone from 1988 through 2024 would have grown to just over $500,000. Miss only the five best days, and the ending value falls by 37%.  

No big deal people think… I can live without the $185,000 I’d give up because I’ve still made $315,000.  

Fine.  

Miss the 50 best days – just 0.4% of the total number of days in that time frame – and that same portfolio drops to just under $40,000. In other words, your fear costs you ~92% and ~$460,000.  

The real objective right now is to build a plan, so clients don’t have to go to the sidelines. 

Everybody who is DCAing/VCAing into current conditions will undoubtedly be shown to have made a fortune when the dust settles, especially if they’re reinvesting, too.  

So, yeah, step aside if your financial footing demands it, but history shows beyond any shadow of a doubt that you want to stay engaged if your plan is sound and you’ve got some modicum of emotional control and discipline.   

Investors who win don’t try to dodge every storm; rather, they build their portfolios so they can sail through it.  

Speaking of which, I invite any investor to do the math but none more so than those struggling with fear, doubt and uncertainty.  

Over the last 50 years, the S&P 500 has had a negative Q1 18 times. People have already forgotten that just last year it dropped 4.6% in Q1 and finished up 16.4% for the year. In 2003, the S&P 500 fell by 3.6% in Q1 and turned in 26.4% for the year.  

After every 10% correction over the past 50 years, investors who bought into the dip average 11% returns within a year and 37% within 3 years. 

Let that sink in! 

Keith’s Investing Tip: It almost never feels like a great time to invest, but history shows that it almost always is. The right stocks, the right tactics and the right perspective can make all the difference. 

4 – You might have $16M in your basement… hiding next to the Legos 

CNBC is reporting that Logan Paul’s Pikachu Illustrator card, which sold for more than $16 million in February, set a record for the most expensive trading card ever sold at auction. (Read) 

I’ll admit, it makes me wonder what’s sitting in boxes from our boys' days in Japan. Some of ‘em were Japan-only releases. Could be interesting! 

But let’s not kid ourselves. 

The media is treating this as some sort of alternative investing story, but it’s really more like luck of the draw when it comes to collectibles. 

A rare Pokémon card (Lego figure, Hot Wheels car etc.) can absolutely soar in value, but it does not produce cash flow, pay a dividend, buy back shares, expand margins, or grow earnings like many of the great names we talk about frequently. 

Value depends almost entirely on what the next buyer is willing to pay.  

Don’t confuse the two and do check your basement if your kids collected Pokémon cards! 😀 

5 – Costco: AI won’ take your job but it will take the competition’s lunch 

Costco rolling out self-checkout (again). 

Excellent! 

Leadership is leaning into AI, automation, and e-commerce while everybody else is still arguing about shrink, wages, and pricing. Costco caps margins at ~14–15% while traditional grocers are running 25–35%. 

That gap matters because it’s why Costco customers keep showing up and, not for nothing, why I’m more content than ever to be an investor. 

• Sales +9.1% to $68.24B 

• Net income +13.6% to $1.36B 

Both after a membership hike… not despite it 

As I have noted repeatedly for several years, AI won’t take your job but somebody who knows how to use it may well. 

Buy the best, ignore the rest®… including, specifically, any mid-tier retailers that are going to be disrupted right out of existence in the next few years. 

Keith’s Investing Tip: Technology doesn’t eliminate jobs. It eliminates companies that can’t adapt. Markets are brutal like that.  

Bottom Line 

Flying by the seat of your pants doesn’t count!  

And never has. 

You got this – I promise! 

Now and as always, let’s MAKE it a great day and start the week strong. 

Keith 😀