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The mother of all contrarian signals is in play again

Sep 01, 2023

Good morning! 👋

The markets are up in early going as hope rises that the latest jobs report will tame the Fed’s rate hike follies.

A. I wouldn’t bet on it; and,

B. The real reason traders are on the gas in early going is that the US-10YR yield has dropped slightly to 4.079% as I type, which means that the cost of leverage just went down for the big traders who depend on it (so they can afford to “lever up” and buy).

Here’s my playbook.

2 battery stocks to think about if you don’t like Tesla

Hyundai and LG are going to invest an additional $2 billion in their joint-venture Georgia battery plant. The $2B investment brings the total planned expenditure to nearly $8B and is anticipated to create 8,500 new jobs over 8 years. (Read)

People naturally think this is all about EVs, but as usual, another story emerges when you follow the money... or, in this case, the tax credits and the UD Inflation Reduction Act, which passed in 2022. It specified new sourcing for critical battery components and minerals.

My guess is this development will be good for Albemarle Corp (ALB) and Panasonic Holdings Corp (PCRFY), but I’ll stick with Unka Elon.

Meanwhile, I hope I’m smart enough to buy more dino juice, because those plants—and plenty of others like them around the world—are going to be built by old-fashioned, piston-clanking machinery.

The best contrarian indicator on the planet is in play (again)

Anybody who doesn’t understand investing psychology is at a tremendous disadvantage in today’s financial markets.

Let me explain.

Research from Barron’s, DALBAR, and others shows that 80% or more of all buy/sell decisions are wrong, meaning that investors sell when they should be buying and buy when they should be selling.


There’s actually a simple explanation.

Herding, for lack of a better term, is very real. And it’s getting worse because the internet has created a tremendous need for social validation.

At the same time, individual investors are reluctant to realize losses even when they should. Professionals don’t have that problem, which is why this is such a great juxtaposition.

And finally, many individual investors are overconfident in their ability to predict the future, yet at the same time fearful that “everybody else” knows something they don’t. Which is why many armchair experts have consistently predicted 10 of the last 2 recessions. [doh!]

Well, guess what’s happening?

US equity funds have seen a fifth successive week of outflows. According to Refinitiv Lipper, investors pulled $4.54B from US equity funds, which was driven by “risk aversion.” (Read)

Talk about a great contrarian signal!!!

AWS releases AI for small businesses

I told you about this a few weeks back when I noted that AWS’s next play would be “new business,” and now Amazon’s confirmed that with new offerings aimed squarely at small and medium-sized businesses. (Read)

At the risk of sounding like a broken record, AI is not just about AI, and it sure as heck isn’t about Big Tech exclusively. Every business on the planet will use it one way or the other within the next few years, even tangentially. Those that don’t or refuse to will die.

Small businesses are 70% of our economy or more…

Anecdotally, my company’s already on board—and has been for years—with AWS, so I am personally super excited to see this happening.

Musk’s X to collect biometric information and employment data

Biometric data is the future; the only question is how we use it and who has it.

People are griping about privacy fears, but I can almost guarantee you that Musk is 5 moves ahead. (Read)

My guess is that he’s thinking about all the information he’ll need to guarantee global payments, billing, and medical security when it comes to the Super App he’s got planned.

Not to be callous, but if you’re worried about privacy… give it up.

That ship sailed years ago when credit card companies, insurance companies, and social media teamed up to buy and sell your data without your permission.

OBAers: The September issue drops today

Keep an eye on your email later this morning.

I’m super excited to be sharing this month’s research... including a top-tier defense stock with great growth and income potential. Unbelievably, it’s trading at a discount right now. There’s also a super-innovative income strategy that’s straight out of what I am calling the billionaire’s playbook. You won’t believe the yield!

If you’ve got this covered and you’re already in to win, that’s excellent—well done! But if you’d like some help and confidence that you’re on the right path to profits, I’m here. Upgrade to Paid

Speaking of which…

Bottom Line

I’ve always believed that anybody can be wildly successful in the stock market with the right information, education, and tactics.


Find a mentor.

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Every day is a new opportunity.

Let’s finish the week strong—you got this!


Keith 😊


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