☕️ Tesla and Palantir, two stocks I like a lot right now
May 19, 2025Howdy 👋
The sheer audacity of it all.
Moody’s cut America’s last “pristine” credit rating… and the markets have sold off as I type.
Yeah, and I’ve got a bridge to sell ya.
Traders are simply repricing risk because that was overdue after a big 5% move last week, something I mentioned in last night’s short. (Watch)
Btw, I think pullbacks are likely to be shallower and far less painful in the weeks ahead than many expect which is why I encourage you to view ‘em the way I do… as an opportunity.
Remember…
Investing in optimism beats cowering in pessimism!
Especially if you focus – like I do – on the very best companies you can buy.
Innovation will do the rest.
Hopefully you’ve got your “buy list” out today as well.
Here’s my playbook.
1 – Two stocks I like right now
We were a little pressed for time this morning because of breaking news so Stuart got right to it… asking which two stocks I particularly like right now. (Watch)
2 - Moody’s is like a paper map in the GPS age
Moody’s downgraded the United States’ long-term credit rating from Aaa to Aa1, marking the first time all three major credit agencies—Moody’s, S&P, and Fitch—have rated the U.S. below the top tier. (Read)
The downgrade reflects concerns over escalating national debt, projected to reach 134% of GDP by 2035, and rising interest costs, with annual payments expected to exceed $1 trillion.
Really?!?!
S&P downgraded in 2011 and Fitch in 2023.
The question everybody ought to be asking is what took Moody’s long.
Moody’s is like a paper map in the age of real time GPS.
Bond spreads, CDS (credit default swap) pricing, and other real-time indicators often give far faster and far more accurate warnings of distress than Moody’s can or does.
In today’s world of AI-driven financial modeling and second-by-second data, relying on a committee-based process is painfully slow; after the fact, pro cyclical.
Or at least that’s what Bryce, our risk management intern says. 🐾
3 – Bostic wants “one and done”
Atlanta Fed head Raphael Bostic says he’s “leaning” toward just one rate cut this year. (Read)
Oh goodie.
Bostic also said the Fed should “be patient” and “let the data be our guide.”
In FedSpeak, that’s, “We're still driving forward while staring into the rearview mirror.”
Meanwhile, consumer credit’s blowing out, CRE’s cracking, and small businesses are getting starved. But hey—let’s wait until something really breaks. Like oh, I dunno... the economy. 🤦
The Fed doesn’t have a proactive bone in its body and has already caused the next 3 crises, imho.
Keith’s Investing Tip: Central banks never lead; they follow… and badly.
Trade Idea: TLT may be interesting on any weakness, especially if we get a CPI or a PCE miss. Rates are a coiled spring. Timing's tricky, but a big move down is coming, and the markets are likely to force that long before Bostic makes up his mind.
Or, buy stocks in world-class companies like those that are being put on sale.
Why?
Real growth has a funny way of producing real profits… no Fed follies needed. I’ll be here if you need me or would find my perspective helpful.
4 - Bath & Body Works … getting the fix or the flash?
Bath & Body Works just swapped CEOs—again—making this their second leadership reboot in under 3 years. (Read)
This time it’s Daniel Heaf, fresh from Nike, where he led “transformation.”
No doubt he is a super smart guy with digital chops and global scale creds but what gives me pause is that Nike’s turnaround is still limping along.
Begs the question in my mind… is BBWI getting the fixer or the flash?
Not to be too harsh, but remember what BBWI sells feel-good, “nice to have” stuff.
Great margins when times are good, but it's tough to move body butter and bath salts when folks are budgeting for gas and groceries.
Keith’s Investing Tip: When your product’s a “want,” not a “need,” leadership better be airtight. And dang effective.
Trade Idea: Putskies, otherwise, short or avoid.
5 – Costco shoppers’ve got gold fever—should you?
Gold at Costco was wild enough.
But now?
Demand’s so hot, management just tightened the limits.
What started as 5 bars per day is now down to 2 per 24 hours—same Lady Fortuna and Rand Refinery 1oz bars. (Read)
That’s not a shortage.
That’s speculative froth, front and center.
Put another way... when your neighbor’s stacking bullion next to bulk pretzels and 3-gallon mayo tubs… you might want to check the temperature.
Reminds me of tulips, tech stocks in 2000, crypto in 2021, and NFTs of rocks.
Could it run higher?
Sure.
As Keynes (sorta) said: Markets can remain irrational longer than you can stay solvent.
Meanwhile, I’m thinking hedges—GLD puts, GDX trims, or rotate into cash-flowing hard assets. Fever breaks faster than you can spell T-O-P.
Keith’s Investing Tip: When gold’s on your Costco list, I submit the trade is getting crowded. You’ll know the end is near when they start accepting gold bars for hot dogs and pizza… and I’m joking but just.
Bottom Line
Success in the markets comes from 3 things:
- Being different and having perspectives others don't.
- Asking questions others won't.
- Taking risks that hold others back.
As always, let’s MAKE it a great day and, of course, start the week strong.
You got this – I promise!
Keith 😀
