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☕The single most important thing any investor can do right now

Jan 22, 2024

Good morning! 👋  

Investing in Optimism 1, Naysayers 0. 

This is a tough business. 

There’s no doubt we’ve been incredibly fortunate to get a lot of stuff right when many investors fell prey to their fears over the past 12 months and didn’t. 

Can you imagine, for example, how different the situation would be if we’d listened to the naysayers who called me out for recommending big tech when everybody else wanted to throw it out with the bathwater last year at this time?  

Or what your portfolio would look like if you hadn’t gotten on board with the S&P 500 which I saw rallying sharply even though others feared a recession and the end of the financial universe as we know it? (Watch) 

There’s still plenty of upside. 

To be fair, it won’t be in a straight line. In fact, as I noted to the fabulous Stuart Varney this morning ahead of the opening bell, I think there’s going to be more than a few squiggles ahead. 

The single most important thing an investor can do right now is take a deep breath and remain focused on the world-class companies we talk about frequently.  

It’s more important than ever to be “in to win.” 

Here’s my playbook. 

1 – Exxon Mobil sues activist investors  

This is a new wrinkle and one that opens an entirely new chapter in boardroom behaviour. ESG had its day and now execs are fighting back. 

Exxon Mobil has sued activist investors in an attempt to stop ‘em from presenting climate proposals during the company’s annual shareholder meeting. (Read) 

Critics charge that management is squashing shareholder rights and I can understand why they’d think that given the proposals they want considered. 

The issue really speaks to something called “shareholder primacy.” 

It’s a much bigger conversation. 

Management has a responsibility to ensure a fair, regular and reasonable return to shareholders while ensuring the safety of their investment. It also has a duty to strengthen the company’s financial position and safeguard its assets. 

The challenge will be interpreting this kind of action – and there will be more - against the changing concept of corporate purpose, aka primacy. 

I will be watching this very, very closely because I think there could be profound investing implications, not all of which are good. 

2 – Oppenheimer warns about HD and Lowe’s 

Wall Street has keenly defended both stocks but I’m wondering how much longer that can continue if the Fed doesn’t begin cutting rates. 

I won’t touch either stock until there’s some clarity. 

Or my sink needs replacing. 

3 – Citi throws in the towel 

Now the bank says no “economic collapse” (Read) 

Imagine that...the world’s economies have proven far more resilient and the labour market more robust than expected. Not that we’ve been talking about this for more than a year or anything. 🤦‍♂️ 

Still, it’s nice to have Citi at the party. 

Sell-side research drives eyeballs and Citi’s about-face means there will be another group of investors who suddenly realize they must play catch-up. That’s great for everyone who’s been investing all along. 

4 – Musk expects 1B humanoid robots by 2040 – I think he’s low 

Unka Elon took to social media to agree with a prediction that there will be 1B humanoid robots on earth within the next 20 years. (Read) 

That strikes me as low. 

I can easily imagine double that if AI continues to advance as fast as it is now. There are some big caveats, of course, not the least of which is humans must maintain control. 

Meanwhile, here’s a quick look at Optimus, Tesla’s humanoid robot. 

Tesla, btw, reports this week, and I outlined 3 potential strategies for the OBA Family in a special Sunday update yesterday. Login to read. Or, check your email. 

5 – Karpus Diem: Demand is so high we're going to have to reinvent the company 

Palantir CEO Alex Karp doesn’t mince words. 

Speaking in Davos recently, he said that, “any one of the products we built would be the number one startup in Germany — and we have five" products. 

Palantir, “can’t keep up with demand” he also noted. 

What he said next, though, just about made me fall outta my chair. 

Karp predicted that AI will enable very large GDP growth — but that there will be only a handful of companies and countries that benefit... a shift that will lead to political and social "dislocation." 

OBAers will undoubtedly recognize the linkage. 

I share his opinion. 

Dislocation is one of the “5Ds” we’ve been following for years because it’s backed by trillions of dollars that will get spent practically no matter what the Fed does next, who is in the White House, or what Wall Street does to rig the game. 

The fact that Karp chose that word specifically... holy smokes! 

$50 a share. 

Bottom Line  

The changes happening now and in the immediate future are so profound that investing isn’t just a matter of hunting profits or buying hot stocks for the year but, rather, a matter of harnessing dynamic changes that are already in motion and using ‘em to build life-changing generational wealth over the next decade.  

I can’t think of a more exciting time to be an investor. 

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

Keith 😊 


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