☕️ Tesla, the Fed, real estate and more

Howdy from 35,000 feet! 🛩️ 

The S&P 500 rebounded again yesterday but oil muted the gains. 

Not that this should be a surprise. 

The markets are so interlinked and the computers so intertwined that the cross-trading and constant rebalancing/hedging makes volatility a thing and raw, sustained gains an illusion… at least for now anyway. 

History shows very, very clearly that playing offense is smart and, yep, likely very profitable over time. 

Here’s my playbook. 

1 – Will somebody please take away the mic? 

I’m expecting zippo when the Fed speaks. 

Not that that’s unusual but what a waste of airtime. 

Fed Chair Jerome “JPow” Powell hasn’t got a proactive bone in his body, so more jawboning about the need to be data-dependent is probably what’ll happen. 

That won’t stop the pundits from speculating about how the Iran war will or won’t impact rates but it’s moot. 

MyPOV is simple. 

This is very likely Powell’s last meeting in the “chair” and as Chair so let what he says go in one ear and out the other. The markets are already doing his job and have been for a long time. 

Keith’s Investing Tip: Concentrate on buying great companies that can succeed despite the Fed’s next follies. 

2 – Kalshi gets charged – no word on mugshots 

I’ve been waiting for this development but didn’t know which AG was going to file first. 

Arizona apparently won the race by filing misdemeanor charges against Kalshi (the “prediction” platform), saying it is really an illegal gambling and election wagering operation in the state. (Read) 

I agree. 

Kalshi, of course, says it draws distinctions between event contracts it offers and what the casinos and sportsbooks offer. 

We’ll see. 

Wall Street is, of course, hoping to get a chunk of taking Kalshi public so it’ll be interesting to see who weighs in on which side… that it’s a CFTC-regulated product or raw gambling. 

Meanwhile, if you’re gonna buy an actual casino stock, consider a slice of MGM, which has a major slice of the strip (which is challenged because people have finally had enough of Vegas’s ripoff pricing) but also a 56% stake in two Macau casinos. Critically, the real bit that’s interesting is BetMGM and digital gaming revenues which grew by 35% last year. Or, directly, Entain plc which is traded on the London Stock Exchange as ENT (because it just began distributing cash to its parents… including MGM). 

3 – Tesla snaps up GM’s batteries 

GM fabulously went in on batteries as part of an EV push that it’s now abandoning. 

Tesla has stepped up to clean up. 

Team Musk is expanding ties with LG Energy Solution and will buy $4.3B in battery cells for energy storage cells produced in Lansing. (Read) 

You know what to do. 

And if you don’t, I’m here along with thousands of likeminded investors who tell me what they’ve learned has given them newfound confidence and already changed their investing results forever. 

4 – Miami is now the highest-risk real estate market in the country 

A new UBS report cites Miami as the highest-risk real estate market in the country, surpassing both NY and LA. (Read) 

Like that’s a surprise. 

Prices disconnected from fundamentals a long time ago with homes rising an average of 25%, rents 10% and incomes about 5%. 

My eyes are on the mid-tier condo market where rising maintenance costs and mandatory reserves have skyrocketed. But I can’t find an investment I like in that space… yet. 

Hmmm. 🤔 

5 – Read this about AI no matter which side of the fence you’re on 

I make a point of reading widely, especially when it comes to things that can impact our financial markets. Heck, those that already are. 

This article by Charles Ferguson on AI qualifies because it’s thought-provoking no matter which side of the AI fence you’re on.

Bottom Line 

Learn to think like a hunter, not the hunted.  

Your portfolio will thank you. 

As always, MAKE it a great day – you got this! 

Keith 😀