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Microsoft $500 a share within 12–24 months or sooner

Nov 27, 2023

Good morning! 👋

The markets are likely to burn off pre-holiday hedging today, which means some additional volatility. We saw that in the early going, but the markets have now “caught a bid”—meaning that some buying has come in.

Keep your eyes on the prize.

Believe it or not, a violent rally into 2024 is still possible, for reasons I laid out with the fabulous Stuart Varney this morning ahead of the opening bell.

Here’s my playbook.

Yes, it’s on tape—MSFT > $500 a share

AI (artificial intelligence) is one of the most amazing stories in modern tech. And, at the same time, quite possibly the single-largest investing trend in recorded human history.

I see Microsoft at $500 a share within the next 12–24 months, perhaps sooner.

For every $100 spent on Azure (Microsoft’s cloud), I think there’s $50–$100 spent on AI. At the same time, Microsoft will roll out some version of AI in 50%–60% of its client base within the next few years. That puts another ~$25–$35B on the top line within the next few years that isn’t yet priced in.

ChatGPT is just an appetizer.

CrowdStrike earnings

CrowdStrike (CRWD) is scheduled to reveal its fiscal third-quarter 2024 earnings on Thursday, November 28. (Read)

I think we’ll see 30–35% growth in the top line and perhaps as much as 80%+ on the bottom line. ARR (annual recurring revenue) may top $3B of which I think perhaps $250M may be new money.

CRWD has returned 98.73% YTD and, like Microsoft, is just getting rolling.

There’s a cyber-attack every 39 seconds, and the average damage per attack is nearly $10M. Executives cannot afford not to spend, if that makes sense.

I’ll have instructions on what to do next for OBAers later this morning. If you’ve got this covered, excellent! And if you’d like some help, you can find me here. Upgrade to Paid

Musk visits Israel

Love him or hate him, Musk puts his money where his mouth is… this time with a visit to Israel where he met with Netanyahu and explicitly backed Israel in its battle against Hamas. (Read)

According to Reuters, Musk said, “Those that are intent on murder must be neutralised. The propaganda must stop that is training people to be murderers in the future. And then, making Gaza prosperous. And if that happens, I think it will be a good future.”

On a related note, Bloomberg reports that Tesla sentiment has soured and the “green stock” selloff continues.

I’d be very careful with that one.

Regardless of how you and I feel about Musk personally and irrespective of whether we agree or not, that’s exactly the kind of headline the big money would spread to shake out the weaker hands.

If you’ve made a conscious decision to dump Musk/Tesla, I respect that and applaud you for having done so.

I, however, am hanging on.

I believe that Tesla will recover and, in fact, shares will move higher over time as the charging network, AI, and a dozen other businesses he’s got in the hopper begin to put numbers on the table.

Tesla’s “Apple moment” is here.

Russia’s rupee problem sets up a gutsy trade

This is a very interesting shift, and India, as I suggested would very likely be the case at the time, made a bad bet when it insisted that Russia accept rupees for oil.

The Chinese yuan is much more valuable. (Read)

China’s made no bones about its desire to unseat the dollar, and Uncle Vlad has cast his bet.

I think it sets up a super-gutsy trade if I’m right.

The play here isn’t oil or gas like you’d think, but China’s budding bromance—specifically, the pipelines for natural gas and petroleum products Russia wants to export to China.

Stay tuned!

What a $2 million bottle of Scotch can teach you about investing

Sotheby’s oversaw what is being billed as a “whiskey weekend,” during which a bottle of ultra-rare Scotch whiskey barrelled in 1926 and bottled in 1986 sold for a record $2.1 million, roughly double and then some of the original $934,000 pre-auction estimate. (Read)

First, here’s more to making money than stocks, bonds, and real estate. People think about a situation like this only in terms of the $ involved—and I get it because $2M is a lot of scratch—but the real takeaway is to be curious, not judgmental, a line commonly attributed to American poet Walt Whitman, though he reportedly never uttered it.

Second, physical assets like whiskey (and fine wine) can provide a substantial buffer to otherwise volatile markets while generating growth, too.

Case in point—pun absolutely intended—fine wine has appreciated 162% over the past decade while rare whiskey has tacked on 373%, according to Knight Frank. The S&P 500, by comparison, has returned 202.38% or right about in the middle, according to FinMasters.

And third, alternative assets aren’t just for the uber-rich. Just 14% of what EY calls the “mass affluent” invest in alternative investments while 81% of ultra-high-net-worth investors do. And at the same time, 81% of institutional investors intend to boost holdings, according to a 2020 Prequin that matches up to what I heard anecdotally now.

I.e., there could be a nice tailwind building.

If you’d like to learn more—and I hope you do—consider a free subscription to Oeno’s Saturday Cork & Cask. (Click here to check it out).

Full disclosure: Noriko and I are happy Oeno clients with a small collection of fine wine and whiskey ourselves. I do not receive any sort of commission whatsoever for referring you to The Cork & Cask. I just think you may find it an interesting way to learn about one of the tastiest asset classes out there. They’re great to work with, by the way.

Bottom Line

You will spend 1/3 of your life chasing $$, perhaps more… 8–10 hours a day, 365 days a year.

Why on earth wouldn’t you spend 10 minutes a day learning how to make more and keep it?

Invest, trade, practice... better yet, do all three every day!

Quick heads up… the December OBA drops Friday and, with it, what could just be the best investment of 2024. I think the timing may be about as good as it gets!

Keith 😊

Straight to your inbox from Keith himself!

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