☕️ Tesla's advantage is now 55 to 1

Howdy! 👋 

Doh! 🤦‍ 

Here we go again. 

US President Donald Trump has stated that he thinks Iran has taken too long to reach a peace deal and that the country will “pay the price.” 

Yields, of course, shot higher as traders began to reprice risk immediately. 

So did oil. 

Remember…  

You can’t hope to be up if you’re not willing to invest when the chips are down. 

Here’s my playbook.  

1 – Markets, mayhem and SpaceX 

I sat down yesterday for a thought-provoking conversation with my good friend and colleague Scott "the Cow Guy" Shellady. (Watch) 

He’s a super sharp former floor trader – so named the Cow Guy for the colorful old-school pit jackets he wears – and it’s always an honor to be on his show. 

Scott wanted my take on what will happen with the SpaceX IPO.  

Spoiler alert: Long-term There is no question in my mind that it (and the other mega-IPOs ahead) are going to create unprecedented profit potential for smart investors. Shorter-term, it’s another story. 

“I’m not keen to rush into a fire when someone else has the fuel can.” 

2 – Tesla’s advantage is now 55 to 1 

Tesla reports that it has exceeded 11 billion miles driven on Full Self Driving (FSD) supervised. (Read) 

And mind you, that’s after hitting 10B just last month. 

To put that in context, 11 billion miles would take you to the moon and back 23,000 times or allow you to drive around the earth’s equator 440,000 times. 

The closest competitors aren’t, well, even remotely close. 

Tesla is ~11B miles while Waymo is at ~200 million fully autonomous miles… a 55 to 1 advantage. 

The Waymo fan club continually pushes back saying that those miles aren’t autonomous, the number of robotaxis pales in comparison and so on. 

I get it and respectfully I say each time, they’re missing the point. 

Tesla's real competitive advantage has never been the car. 

It's the data engine behind it. Every mile driven trains the system and every system update, in turn, makes the next billion miles more valuable than the last.  

There isn’t another feedback loop in the planet at this scale in any industry. 

OBAers, you know my thinking so please stick with the plan. 

And if you’re one of millions of investors engaged in the whole Tesla v Waymo thing, posit this… would you rather own the company building the world's largest real-world AI training dataset, or wait until everyone else figures out what that's worth? 

Waymo buys more hardware to grow.  

Tesla hits a button. 

3 – The ARM is back. That's not good news 

The average 30-year fixed ticked up to 6.60% last week. Total mortgage applications rose 10.8%. Refinance apps jumped 15% — and are 20% higher than this time last year. (Read) 

That's not what you were supposed to see. 

Here's what caught my eye though. 

ARM applications climbed to 8.6% of total activity. Adjustable-rate mortgages spiking when rates are already elevated tells me some buyers are stretching to make the math work any way they can. 

We’ve seen this movie before. 

Adjustable-rate mortgages don't come back because buyers suddenly love rate reset risk. They come back because the fixed payment is too big and buyers are engineering the monthly number any way they can.  

The ARM makes it pencil — for now. 

There are two plays in a scenario like this one. 

First, companies that benefit from elevated mortgage servicing complexity and default activity — specialty servicers and mortgage technology firms with distressed-loan exposure tend to do well when delinquencies rise.  

Second, and more contrarian: quality homebuilders with strong balance sheets. If ARMs are a sign that resale buyers are maxed out, builders who can price to market and offer rate buydowns have a structural advantage over the existing home market.  

Keith’s Investing Tip: Stress in housing doesn't have to mean pain for the whole sector — it tends to mean that the strong get stronger. 

4 – The real World Cup winners aren’t on the pitch 

The 2026 FIFA World Cup kicks off tomorrow. Global wagers expected to hit $50 billion. (Read) 

Aaaaaaannnnndddd… 65% of Americans now have legal access to sports wagering. In 2022 it was 40%.  

Sportsbooks have had four years to improve their soccer products, parlays and live betting options, which means that the gambling around this World Cup looks nothing like the last one. 

Now here's where it gets interesting. 

Kalshi and Polymarket hit a combined $7 billion in weekly trading volume last week.  

Kalshi alone is offering nearly 500 unique markets on the tournament. And 19% of surveyed bettors said they'd use prediction platforms — ahead of social casinos, crypto platforms and offshore sites. 

The betting doesn't interest me, but the plumbing most definitely does.  

$7 billion a week flowing through prediction markets that nobody has properly regulated is at once a recipe for disaster of the highest order but also a structural story nobody knows how to read… yet. 

Keith's Investing Tip: Know that wherever the regulators show up uninvited, the money got there first. And invest accordingly. 

Trade Idea(s): The hot money crowd will be drawn to choices like DraftKings and Flutter just like flies at a picnic. But the more interesting play to me is casino stocks like MGM and Wynn that have been beaten down by Lost Wages – err, Las Vegas – tourism blowback. 

5 – War, terrorism and ugliness are unfortunately still growth industries 

Norway's KONGSBERG just completed the acquisition of California missile startup — and the reason why tells you everything about where defense spending is headed. (Read) 

The company is called Zone 5 Technologies.  

You've probably never heard of them but the U.S. Air Force has. In fact, the company won the contract for the AGM-188 FAMM — that's the Pentagon's "Family of Affordable Mass Missiles" program.  

The whole idea is simple: stop betting the farm on a handful of expensive, hard-to-replace weapons and to build thousands of cheaper ones instead… fast at scale. 

Hopefully you’ve given this some thought in your own portfolio. 

If not, you know where to find me. 

Bottom Line 

The upcoming crop of IPOs is being marketed so as to make you feel like you’re missing the deal of the century if you’re not on board. 

Do NOT fall for it because you will be violating rule #1 if you do… keep your emotions outta the equation. 

Investing, to a point I make often, is not a game of rushed decisions. 

Now and as always, let's MAKE it a great day! 

You got this — I promise! 

Keith 😀