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McDonald’s risks a New Coke moment but here’s why that’s a good thing

Dec 01, 2023

Good morning! 👋

The markets are muted in early going today after a whopper of a November.

I can’t say I’m surprised.

Traders are waiting to see what Fed Chair Jerome “JPow” Powell is going to say later today when he speaks at what is being billed as a fireside chat at Spelman College. The risk that he’ll roil markets yet again is high, if for no other reason that much of November’s charge higher resulted from traders who bet that he and his band of PhDs were done hiking rates.

I continue to believe that Powell will raise rates once more this year (although to be fair, the timetable is getting tight) and once again in Q1 2024. So, I want to be prepared for that mentally.

At the same time, I encourage you not to get all worked up; I’m not.

There isn’t anything that Powell can say today that we haven’t already talked about!

Not a dang thing.

Besides, chaos creates opportunity, and that’s always something savvy investors can use to their advantage!

Here’s my playbook.

Pfizer pulls 2x daily weight loss pill

Shares were down nearly 6% in the early going after the company’s announcement. (Read)

Critics, analysts, and armchair medical experts alike are all over the story today…

  • CEO Bourla’s a rat, some charge

  • Shares are down 40%

  • COVID-related lawsuits will kill it

  • Blah, blah, blah

People said the same thing about Exxon after Valdez and BP’s blunders shortly afterward, Tylenol tampering, and Union Carbide, which Dow purchased 16 years after the Bhopal disaster. Apple, Microsoft, and Amazon have all nearly gone feet up for one reason or another several times, too.

The choice is very simple… if you don’t like the stock, don’t own it.

Just understand as you walk out the door that Pfizer’s not a one-trick pony.

I can all but garan-dang-T-you that SEC filings a few quarters from now will show that some big players used the protracted smackdown to pick up shares.

Experts said it would never get made

More Musk at his finest.

Regarding the Tesla Cybertruck, which, btw, has bulletproof bodywork: “We have a car here that experts said was impossible, that experts said would never be made.”

Base mileage range is 250 miles while the Cyberbeast variant can extend that to 320 miles and has 845hp. (Read)

I don’t think it’ll move the needle with regard to Tesla stock, but it reinforces the fact that Unka Elon plays by his own rulebook, which is really the important thought here.

Billionaire investor Ron Baron sees Tesla at $500 in 2025.

I’m in the same neighborhood, as you know, and have been for a long time.

Every $1,000 invested in Tesla on December 1, 2013, just a decade ago, is worth $28,293.64 today, which works out to a 39.64% annual rate of return and a total increase of 2,729.36%.

Imagine where TSLA could be a decade from now!

The S&P 500 did 202.79%.

MCD risks a New Coke moment

I thought hamburgers were simple.

Silly me.

Unka Ronnie is out with news this morning that the company is going to make more than 50 changes to roll out new and improved patties. Upgrades reportedly also include changing the legendary sesame seed bun to a buttery brioche, more secret sauce, fresher cheese, pickles, and more. (Read)

I think it’s an incredibly gutsy move at the right time.

The company has made huge strides in tech, is pulling ahead of the competition with its loyalty/app-based marketing and enjoys a reputation for thinking in terms of the customer experience.

Still, the situation reminds me of one of the most famous blunders of all time… when Coca-Cola created New Coke by changing the original formula back in 1985.

Execs thought Coke was broken, so they decided to mess with perfection. Then-President Donald Keough echoed the certainty: “I’ve never been as confident about a decision as I am about the one we’re announcing today.”

Consumers, on the other hand, were so miffed that it almost destroyed the company. KO shares started dropping immediately on the NYSE while Pepsi’s took off. Adding insult to injury, Pepsi ran a full-page ad declaring that, “after 87 years of going at it eyeball to eyeball, the other guy just blinked.”


Selling Cash-Secured Puts could be appealing to take advantage of any volatility if the opportunity presents itself.

Meanwhile, I am hoping they don’t mess with the fries.


Hydrogen-powered drones

Israel is using hydrogen-powered drones to fight Hamas that reportedly have extended flight range, are more energy independent than comparable offerings, and incorporate longer cycle times. (Read)

Many people thought hydrogen power would never make it to flight status, but I’ve told you repeatedly that it could revolutionize traditional research well underway by the likes of Boeing and Airbus. Perhaps even leapfrog it.

Heven Drones, the company that makes the drone being used there, is still private, so buying shares is off the table, unfortunately.

Kratos may be an interesting proxy.

I’ve recommended Kratos in the past and would have no problems doing so again if the numbers match up to current market conditions and pass the stringent OBA metrics needed.

I am particularly impressed with the company’s XQ-58 drones, which can operate as part of a swarm with or without pilot control. The XQ-58 is also being evaluated as part of what the USMC calls its “Loyal Wingman” program, a manned-unmanned teaming capability.

The December OBA drops today

I’m super excited to share my latest research with everyone in the OBA Family, including a special choice that could be the best trade we make all of next year. I can’t believe more people aren’t focused on it because the headlines certainly are. There’s also 3 smart moves to make before year-end, the portfolio review, and—near and dear to my neck—a few thoughts on how to crush your goals, not your body!

If you’ve got your investing covered, awesome! If some additional insight would be helpful, I’d love to earn your trust, goodwill, and business. Upgrade to Paid

Bottom Line

You’ve got to get off the porch if you want to run with the big dogs.

As true in life as it is in the markets.

Woof! 🐾🐾

As always, let’s finish the week strong—you got this!

Keith 😊

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