☕️ “They” told you it was impossible but smart investors know better

Howdy! 👋 

It’s Friday and once again the S&P 500 is flirting with record highs. 

Score?

• Smart investors – a bazillion $ 
• Permabears, pundits and prognosticators – zero $. 

I have repeatedly encouraged you to focus on two things: 1) where the markets are going and 2) buying into every last bit of fear the newsmongers were hawking this year.  

And I hope to heck you have. 

Could there be a selloff or correction ahead? 

I get asked that a lot because it’s a very real concern. 

The answer is undoubtedly. 

Big traders won’t let short-term profits stay on the table much longer so they’ll play their usual card… you know the one… hype and horse hockey followed by headlines about rates, inflation, a massive correction, the Fed, geopolitics etc. 

Stay focused. 

This isn’t our first rodeo and we know better. 

YOU know better. 🫵 

Click to enlarge.

Remember. 

Missing opportunity is more expensive than trying to avoid risks you can’t control. 

Here’s my playbook.

1 – “They” said it was impossible 

I LOVE the setup. 

SpaceX filed with the FCC for a constellation of up to 1 million satellites that could work as an orbital AI data center. (Read) 

Unka Elon Musk thinks space-based computing could beat the ground-based version on cost within two to three years. Bezos is chasing the same idea with Blue Origin. Google's got its own version cooking too. 

I agree. 

Meanwhile, Wall Street is fighting with itself over who’s gonna insure the risk because “they” previously told you it was impossible and now – ta da – guess who is gonna prove it isn’t yet again. 🤦‍ 

My guess is that Musk self-insures and tells the boffins to stick it. 

He’s done it before. 

For example, Tesla built its own insurance arm because it had driving data no outside insurer had access to, and finally an insurance company has partnered with Tesla to build FSD-specific coverage using that same data.  

It won’t be the last. 

You know what to do. 😀 

2 – Private equity smells a fixer-upper 

Wendy's got caught up in a short squeeze last June after the company announced a new CFO. (Read) 

You know the one. 

Reddit Raiders piled in… volume exploded 1,850% above average… and right on cue, the stock ripped 25% in a day. Then, kept climbing. 

Roughly 30% of the float was sold short – anything above 15-20% is elevated for context – so the Go Fast Crew – meaning big well capitalized traders had every incentive to play games at the expense of the investing public. 

Same movie, different theatre… AMC. GameStop. Beyond Meat... Wendy’s. 

Now Reuters is reporting Nelson Peltz's Trian Fund Management is putting together a group to take Wendy's private and the stock’s popped ~12% on the news. (Read) 

Should you buy it? 

A lot of people appear to be, but I’d steer clear… in fact, I’d seriously consider “getting while the getting is good” if I owned it – meaning selling out while there’s still a buyout premium on the table – but I don’t. 

Cashing out is almost always the main objective in a situation like this one when public investors have the opportunity to lock in profits associated with a short-term spike that’s driven by take-private buzz. 

Hmmm. 

Keith’s Investing Tip: Money flows to where it's treated best and, at least in Wendy’s case, that may be into private markets. Want fries with that? 🤣 

3 – AI: the “other” Big Short dude just caught up – sorta 🎯 

Steve Eisman – the other "Big Short" guy who called the 2008 housing collapse before anyone believed him – says the entire AI trade rests on two companies: OpenAI and Anthropic. (Read) 

I don’t agree, but for the sake of discussion, let’s play along. 

His math… those two private labs generate roughly 70% of AI-related revenue at Microsoft, Amazon, Google, and Oracle. That's 25-35% of those companies' total cloud revenue. 

In other words, and according to Eisman, the futures of these massive companies are basically a bet that OpenAI and Anthropic succeed. 

His worry isn't that they fail outright, though. 

It's China. 

Ummmm, yeah. 

I’ve told you as much for the better part of several years now and my views are only getting stronger. My concerns aren’t AI but the economics of AI. 

Here’s what most investors are having trouble grasping if the idea has dawned on ‘em at all. 

What China understands better than any nation on earth including our own is that better and higher quality does not guarantee dominance. Locking in “everywhere else” is the real play. 

I know which alternatives I prefer and which specific Chinese companies I want to own in addition to the great US tech names I focus on. And I’m hoping you do, too.  

This is not the time to be timid for the simple reason that China will not give you and your money a second chance.  

As my friend Hao put it years ago during a discussion at a lovely noodle restaurant near the Great Wall, “there’s no time to go slow in modern China.” 

That’s a twist on an ancient Chinese proverb dating back to the Three Kingdoms period, an era of constant warfare and shifting alliances where seizing the moment could determine whether those who did rose to power or perished in obscurity. 

机不可失，时不再来 (jī bù kě shī, shí bù zài lái) – "Don't let an opportunity slip, it won't come again" 

Keith’s Investing Tip: The Dragon is coming to dinner next Tuesday (figuratively speaking), which means the only decision you’ve got to make as an investor is whether to be at the table or on the menu.  

4 – Data breaches: are you victor or victim? 

Fresh numbers out this morning are simply jaw-dropping. (Read) 

• 1,803 reported data breaches in just the first half of 2026. That's already ahead of the same stretch last year – and if the pace holds, 2026 finishes above 2025's full-year total. 
• 471 million victim notices in six months, more than 50% of which are from a single incident. 
• One in four breaches over the past year was AI-enabled, up 56% from the year prior. 
• Insider attacks spiked to 21 in six months – compare that to just 3 for all of last year. Some of that's disgruntled employees on their way out the door. Some of it's foreign actors placing fake remote workers inside U.S. companies using deepfake interviews and AI-written resumes. 

AI used to be the target but now it's the burglar too. 

More AI adoption means more attack surface and that, in turn, means more demand for the companies that specialize in defending it – not eventually, right now, in earnings we're about to see. 

My fave name in this arena just hit new highs, and I don't think the run is anywhere even close to being over. In fact, I’ve got a specific update for the OBA Family in today’s AMAs and update – so please keep an eye on your email if you’re an OBAer. 

Shares have returned ~372.75% since I introduced it to the OBA Family versus ~76.79% from the SPY, a popular passive investing choice for many. That’s a ~4.9X advantage.  

At the risk of sounding like a broken record… Buy the best, ignore the rest!® 

5 – Tune in and enjoy 

As much as I enjoy being on TV around the world, there’s nothing better than sitting down for a wide-ranging discussion with some of today’s sharpest thinkers. 

Case in point, Brad aka “the Income Architect” who’s doing a fabulous job when it comes to investing and, specifically, income-oriented investing. (Watch) 

What an incredible time to be an investor – Enjoy! 💯 😀 

Bottom Line 

As one of my mentors noted years ago… 

Every investment has risk, but not all risks are worth the investment. 

Let that sink in the way I did. 

Odds are good that your portfolio will thank you. 😀 

You got this — I promise. 

As always, let’s MAKE it a great day and finish the week strong.  

Keith 😀