☕ Talking Nvidia Without Jensen, Microsoft’s “Outage” & Inflation Jitters

Happy FriYAY! 👋 

Whew – this has been the longest yet “fastest” week I can recall in a long time. Between actual investment-related analysis and the ongoing Jensen saga, we’ve burned a lot of midnight oil. 

Mind you, I am not complaining. 

To the contrary, actually. 

Chaos creates opportunity. 

This week there’s been a lot of both… which is why I’ve been on the hunt and hope you have too. 

Speaking of which… 

Here’s my playbook. 

1 – Inflation jitters? Fed worries? Take a hard look at this chart 

Remember what I told you last month? (See #1) 

Contrary to what many investors think, the inflation report has nothing to do with inflation. It’s all about what highly leveraged, short-term traders think Warsh will do next. 

Here we go again. 

Wholesale inflation came in a touch lighter than expected this morning, up 0.3% in October against the 0.4% economists were looking for. (Read) 

The go-fast crowd immediately interpreted that as “hey, Warsh might be less prone to raising rates” and began buying almost instantly. 

Then the selling returned. 

The major averages are still higher for the week. 

What to do? 

Take a hard look at this chart. 

Click to enlarge.

Keith’s Investing Tip: The world’s most successful investors don’t worry about what the Fed will or won’t do, which is why I don’t want you to do that either. They’re too busy buying great companies that grow no matter what rates are doing. And, not surprisingly, that’s where I propose YOU spend your energy like I do. 

2 – Can Nvidia survive without Jensen? 

“Bring back THE boss.” 

That’s what some Nvidia employees are saying about Jensen Huang, according to WIRED. An internal post urging the board to listen to staff has drawn more than 1,600 comments, mostly in support of reinstating him. (Read) 

Makes sense. 

Jensen co-founded Nvidia and ran it for 33 years. 

Nvidia’s chips and software still power most of the AI world. Millions of developers build on ‘em every day. Big tech companies buy ‘em because they need the computing power, not because of who signs the checks. 

Here’s the catch. 

Jensen wasn’t just a CEO.  

Like many controversial – and sadly maritally challenged founders – he made the big bets years before anybody else saw ‘em coming. I’d even go so far as to say that he was the chief dealmaker behind billions in AI financing, not to mention the guy who sold Nvidia to Washington, Wall Street and the world. 

Am I suggesting we look past his personal challenges? 

That’s your choice. 

As far as I am concerned and speaking personally, what he’s apparently done is morally reprehensible and if an investigation shows that there’s teeth to the Chinese spy allegations, perhaps even criminally negligent or worse. 

What I am trying to point out is what likely happens next. 

Jensen was Nvidia and no matter how you and I feel about that, the daunting reality is that you can’t replace him or what he brought to the table overnight. In fact, Goldman Sachs already says new deals may be harder to pull off at the same scale. 

I agree. 

So… can Nvidia survive without Jensen?  

Yes. 

Will it be the same company?  

No. 

Earnings are Tuesday. 

Keith’s Investing Tip: Profit potential is directly correlated to the ability to change your mind when presented with accurate information that contradicts your perception and your beliefs. 

3 – The Microsoft outage may not be what it seems 

Microsoft is still struggling with a worldwide tech outage impacting millions of people in an estimated 74 countries. (Read) 

The official story is that a large number of its servers suddenly became “unexpectedly unavailable” and that there is no evidence of a cyberattack, malicious activity or a security breach. 

I wouldn't be so sure. 

To paraphrase my grandfather, I was born in the middle of the night, just not last night. 

Something is very off here. 

1. Microsoft would never admit to a hack of this level or sophistication because doing so would be tantamount to providing a playbook to every bad actor who fancies a go. 
2. And even if it does, we are never likely to get the whole story for the same reason. 

So, what now? 

Here’s what you want to understand as an investor. 

The number and severity of cyberattacks are growing, as is the long list of nefarious players who would love to crash our economy. Case in point, Comcast Business estimates that there is some kind of cyber threat every 0.0004 seconds – roughly 2,500 a second – while global damages from cybercrime now exceed an estimated $10.5 trillion a year, according to Cybersecurity Ventures. 

Thankfully, executives finally seem to be waking up. 

Cybersecurity – and the stability that comes with it – was once a “nice to have” given cursory attention during budget meetings. Now, I submit, executives are playing catch-up and practically in blank check mode. 

I am hard pressed to think of a more compelling investment choice, frankly. 

Keith’s Investing Tip: There are three types of investors: those who watch things happen, those who make things happen, and those who wonder what the heck happened. 

You can buy a cybersecurity ETF like CIBR or BUG, but my preference is to concentrate on specific stocks that I believe can do considerably better, and so far, have. 

One of my faves, for example, has returned ~384% since I brought it to the OBA Family’s attention versus ~72% from the S&P 500 and ~97% and ~54% respectively from the ETFs I’ve just mentioned. 

Obviously, there are no guarantees that this will continue, and I am not trying to toot my own horn. I could easily have been wrong. What I want you to consider is a historical fact intended to make you think about your own investing choices, not a promise for future results. 

On a related note… 

4 – Take your personal security seriously because somebody else is 

Investing in cybersecurity is great, but it won’t amount to a hill of beans if you don’t take your personal data seriously, too. So I want you to be smart about it. 

I use Optery and have been very happy with it. 

People often tell me that “they’ll get around to it.” 

I used to think that way, too. 

Then I got real. 

The threat isn't coming – it's already here.  

While you're reading this, data brokers are packaging and selling your personal information to strangers. Every day you wait is another day your home address, your family's names, and your financial details are for sale to anyone willing to pay a few dollars.  

If you’re serious about protecting everything you have worked hard to build, seems to me that this is a good place to start.  

5 – Why Dinosaur juice is the new diplomacy 

Two oil stories crossed my desk this morning, and they’re more connected than most people realize… which, of course, is an opportunity for smart investors who can put the dots together. 

First up, the International Energy Agency says the world is now pumping more oil than it’s using for the first time since the Iran war began. (Read) In fact, supply is up an “extraordinary” 5.3 million barrels a day since August.  

Inventories are climbing again, too.  

Incredulously – at least to me given all that’s happening – Russia is part of that. Its production rose last month after President Trump’s Oct. 9 diesel deal with President Putin. 

Here’s the rub. 

Diesel is still tight because ongoing attacks on Russian energy infrastructure and problems in the Middle East are limiting how much reaches the market. 

That’s a bigger deal than it sounds. 

Diesel moves the trucks, trains and ships that move everything else. Which means it’s your problem whether you drive a diesel or not. 

Now the second story. 

President Trump says he wants to “get Cuba done” before he leaves office in 2029, and he’d “certainly consider” a short military operation. (Read) 

Meanwhile, Washington just hit Cuban oil tankers and shipping companies with fresh sanctions, on an island that’s already dealing with blackouts and fuel shortages. 

My point? 

Oil isn’t just something you put in your tank anymore. 

Washington is loosening the screws on Russian diesel with one hand and tightening them on Cuba with the other. And make no mistake about it, a market that’s swimming in crude makes that a whole lot easier to pull off. 

Will it come to military action?  

I sure as heck hope not. 

Meanwhile and generally speaking, oil companies continue to be a great investment for a variety of reasons. Particularly for dividend and income-oriented investors. 

Keith’s Investing Tip: Every investment has risk, but not all risks are worth the investment. 

Bottom Line  

If you are not investing while the chips are down, you will not be ahead of the game when they're up. 

As always, let’s MAKE it a great day and finish the week strong.  

You got this – I promise. 

Keith 😀