☕️ The trade I won't take (and neither will Jamie Dimon)

Howdy! 👋 

And just like that, we’re back in the green.  

Don’t ever forget what I’m about to say. 

Volatility is simply the price of admission for real wealth and serious investors. 

That’s why… 

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

Here’s my playbook. 

1 – UBS catches up as Wall Street discovers what we already know 

UBS has increased its year-end S&P 500 target to 8,100. (Read) 

The reasons? 

1. That corporate earnings keep beating expectations 
2. AI infrastructure spending keeps accelerating, and  
3. The economy keeps refusing to cooperate with everybody calling for a slowdown.   

If I were a UBS client I’d be thinking something along the lines of thanks for nothing but that’s just me. We’ve been talking about this for so long that this kinda stuff is laughable. 🤦‍♂️ 

Still, it’s nice to have company. 

And nicer still to have the rest of the herd’s wind in our sails. 

Keith’s Investing Tip: By the time a consensus Wall Street bank makes a bullish call this public, the easy money has probably already been made. 

2 – Novo lawyers up over Lilly’s claims 

Novo Nordisk has filed suit against Eli Lilly, alleging the company's ad campaigns for its blockbuster weight-loss drugs are designed to mislead consumers about how they stack up against Novo's own injections. (Read) 

Here's the beef or at least the lawyers’ take. 

Novo says Lilly's ads compare the highest dose of Lilly's drug against lower doses of Novo's — using what Novo calls outdated trial data — while leaving out Novo's newer, higher-dose version that closes the gap. Novo wants the ads pulled and is asking for damages. 

Forget about the lawsuit… this is the kinda stuff that happens when a) the category gets big enough to fight over and b) Novo may not have a comeback. 

GLP-1 drugs went from "niche diabetes treatment" to one of the most valuable drug categories on the planet in a few short years.  

When the money gets that big, marketing stops being marketing and starts being a legal weapon — and both of these companies know exactly what a 30-pound difference in an ad claim is worth to their respective market shares. 

Suits like this are common in pharma where competitors trade legal jabs over ad claims all the time and doing so rarely changes the underlying business because competitor lawsuits don’t change what the drugs do or why providers reach for ‘em. 

Keith’s Investing Tip: This is exactly the kind of headline that tempts people into hitting the sell button on great companies for all the wrong reasons. Better to focus on the stronger player. 

3 – The Treasury trade even Dimon hates 

JPMorgan's Jamie Dimon said he wouldn't be a buyer of long-dated U.S. Treasurys — the 10-year, 20-year, and 30-year bonds — at current prices. (Read) 

Me neither. 

MyPOV: The math is simple. Even in the best-case scenario where inflation cools all the way back to the Fed's 2% target, the 10-year bond should still sit around 4% to 4.5%. And here's the kicker — we're almost there already.  

So the question you want to be asking yourself as an investor is what's the upside in locking up your money for a decade or three at these levels? 

Keith’s Investing Tip: I've said this before during past selloffs when everybody wanted to run and hide in "safe" Treasurys — the safety you think you’re buying is nothing more than an expensive illusion if it costs you the recovery. Meaning the safe 3-5% you think you’re smart for buying won’t look so great if the markets and the stocks we talk about regularly suddenly take off to the tune of 15%, 20%, 30% or more. If you own it for other reasons, fine… just don’t confuse the two. 

4 – 3M beats – buy, sell or hold? 

3M raised its full-year profit outlook after beating Wall Street's expectations, now guiding to adjusted earnings of $8.80 to $8.95 a share — up from a prior ceiling of $8.70. Analysts were only looking for $8.74. The company also expects sales growth north of 4.5% for the year. (Read) 

Not bad for a company most people only think about when they run out of tape or sticky notes — 3M has launched thousands of products over the past 109 years — chances are you've got a few in your house right now.  

I know we do. 

Should you buy 3M? 

Perhaps – it’s got a nice dividend and the company did just raise guidance. 

The challenge is that 3M is an "n+1" choice — meaning a company making great products that are all better iterations of what's already out there. Great if you like watching grass grow and, btw, there’s nothing wrong with that. 3M is probably not going to change the world at this point. 

I prefer "Zero to One" choices — meaning those with the potential to change entire sectors and even the world. If you have this covered, great but if not and you’d like a helping hand in that department, I’ll be here.  

Keith’s Investing Tip: I encourage you to read Peter Thiel’s book, Zero to One immediately if you haven’t because it’ll reshape your thinking and your investing the way it’s helped reshape the One Bar Ahead® Family’s for years. Profit potential, too. 

5 – Washington's housing "fix" backfires right on schedule 

New housing legislation just banned institutional investors — anyone owning 350 or more homes — from buying any more single-family rentals.  

The result? 

Those same investors are now quietly dumping inventory with listings from institutional owners more than doubling since February, from 4,166 homes to 9,447, representing $3.1 billion in total asking price. (Read) 

The largest landlords in the country — the names that own hundreds of thousands of homes between them — have sold 3,180 more houses than they've bought so far this year. One of them, VineBrook, has nearly 10% of its entire portfolio on the market right now. 

Here's the part that should make you pay attention to rather than celebrating the sudden “affordability” racing around headlines at the moment. 

54% of those listings have already had a price cut compared to 38.7% for listings nationally. These aren't casual "test the market" sellers – they want out. 

Why? 

So that they can walk through another door… build-to-rent construction… and make gobs of money. 

Politicians will never get it. 

Keith's Investing Tip: Money will always flow to where it is treated best, especially when the Beltway Bandits try to regulate something very few if any of ‘em understand anyway.  

Bottom Line 

Investing is only a struggle if you make it one. 

So don’t!  

The path to profits is paved with investing in optimism and always has been. 

Keep it stupid simple. 

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

You got this — I promise! 

Keith 😀