☕️ Walmart vs. Target: only one of them gets it! Plus, is Bitcoin back?

Howdy! 👋 

To paraphrase my grandfather…  

You’ve got to get off the porch if you want to run with the big dogs. 

To which I add… you’ve also got to learn to think for yourself. 

Here’s my playbook.  

1 – Markets to Bessent: Pfffffft 

Treasury yield and the markets have reversed this morning with the former heading higher and the latter heading lower. (Read) 

Don’t be surprised. 

Yields are not about rates but they are very much about risk – something not a lot of people understand. As such, they’re a small bit of window dressing at a time when cosmetics matter. 

The markets are simply doing the Fed’s job for it. 

MyPOV: Bessent’s move is chump change unless there’s something resembling real fiscal policy that follows. And quickly. 

People constantly ask me what stuff like this means for markets but what they’re really asking is which stocks to buy or sell because of it because they don’t have a plan. 

Here’s an idea. 💡 

Try focusing on stocks that are a) not Fed/rate dependent and which have growth rates and dividend payouts that dramatically exceed both inflation and the cost of financial follies. 

It’s a very short list… or at least mine is. 

Yours? 😀 

2 – Walmart v Target 

Walmart reported this morning and, like Target, the results were fabulous as expected. (Read) 

Shares are down and – according to the media – that’s because Wall Street analysts are disappointed by quarterly comparable sales and sales guidance. 🤦‍ 

Let me get this straight… Wall Street analysts who don’t work there, who have never worked there, who aren’t responsible for anything Walmart actually does are disappointed???!!! 🤣 

I’ll stick with CFO John David Rainey’s perspective who said – and I quote – “we feel really good about the progress we’re making.” 

I agree. 

People constantly ask me “which” company I’d buy – Walmart or Target – and there’s an important distinction that has nothing to do with how Wall Street perceives the stock. 

Target used the one-time tariff triumph to trumpet profitability, but Walmart took it a step further noting that it will use the unexpected $2.9B bonanza to keep prices lower for customers… and that the impact will likely be seen in Q3. 

Three guesses which one will come out smelling like a rose and which one is likely the better investment imho. It’s the difference between managing for a quarter and managing for a decade. 

Keith’s Investing Tip: I make it a point of prioritizing investments in companies that prioritize their customers instead of their own pocketbooks because my research shows very clearly that they tend to significantly outperform over time. You can chase hot stocks but I’d rather focus on stocks that are going to be there when I need ‘em years from now. 

OBAers: Keep an eye on the LowBall Orders I suggested in Monday’s update because there’s a good chance you’re going to get filled. Breaking out your “victory dance” – an OBA Tradition – is optional… but highly encouraged. 😊  

3 – Ya can’t win ‘em all 

Shares of Moderna shot 176.97% higher yesterday and I suggested a quick counter-trade idea in the event the buzz wore off. (See #3). 

That’s happening and shares are down 20% as I type. 

That’s great for my puts but I may get skunked anyway. 

My plan was to sell at a small profit this morning if the markets wanted to hand me one OR plan on losing everything that I had placed into the trade (which is why I kept my position small). 

Now, I’m going to just enter an order to “breakeven” because I misjudged yesterday’s volatility and paid too much too early in the day. Maybe I’ll get lucky but probably not. 

Had I waited – as I am hearing anecdotally from 5 Fitzers and OBAers that they did – I would have potentially had about 50% in profits to contend with. 

Teach me to be quick on the draw – can’t win ‘em all. 🙄 

As always, I am super happy for anybody who has played this idea with better timing than my own! 

Meanwhile, I’m content to own three other pharma companies I prefer and have shared with the OBA Family for the simple reason that all three of ‘em are undoubtedly working on something similar and have highly developed oncology pipelines. 

4 – Is Bitcoin back? 

Bitcoin jumped more than 10% this week, briefly clearing $70,000 for the first time since June. Ether did even better – up as much as 19% at one point, its best move in months. 

The trigger, according to the headlines: Trump sat down with crypto executives at the White House and told Congress to pass the CLARITY Act – a bill that would finally give the industry actual legal rules to operate under. (Read) 

Convenient explanation, but that’s not what really moved it. 

What did? 

First, the Treasury just expanded its bond buyback program, which pushed long-term yields lower. Lower yields push money into risk assets like stocks, gold and crypto.  

Second – and this is the part nobody's headline mentions because a) they can’t be bothered and b) have no real understanding of market mechanics – something WE know is very critical. 

You see, a chunk of this move was forced. Bitcoin's volatility spiked and a wave of short positions got liquidated, meaning traders betting against the rally got steamrolled and, as a result, had to buy back in whether they wanted to or not.  

The situation is a lot like the Gold Rush of 1849, imho. 

Scores of people want to buy crypto because they believe in it the way the miners who rushed into the Sierra Nevadas back then believed they were going to strike it rich. 

I’d rather be the fella selling ‘em the picks, shovels and whiskey, all of which were consumed in huge quantities and, in fact, produced the state’s first millionaires. 

Today that’s clearing, financial infrastructure, exchanges and so on…the lot of it. 

One of my faves, for example, has returned 209.61% since I brought it to the OBA Family’s attention versus 94.87% from the SPY, a popular passive investment choice for people who simply wanna “buy the index” and be done with it. 

Keith’s Investing Tip: Buying the index can be a great way to go but allocating even a few % to the world’s best companies – particularly those making “must have” products and services can really move the needle.  

My research – along with that from people who are a whole lot smarter than I am – shows this very clearly. 

Read this very carefully and aloud if you must because it probably runs contrary to everything you’ve ever been told about investing. 

Just ~3.7% of all the stocks listed over the past 100 years have created 100% of ALL net shareholder wealth – some $91 trillion dollars in all. The other ~96.3% performed no better than and – in many cases – considerably worse than treasuries. 

So yeah, I favor concentration over diversification any day of the week, every day of the week. 🎯 

Click to enlarge.

5 – In case you missed it! 3 stocks I believe will double or triple by 2030 

I sat down with my good friend and colleague Scott “The Cow Guy” Shellady – so named for his colorful old-school cow-themed pit jackets – for a fabulous conversation where we covered three of my fave names. (Watch) 

I don’t do price targets like Wall Street because I don’t operate like Wall Street but I believe that they’ll all double or triple by 2030 – which is why I own ‘em. 

Buy the best, ignore the rest!® 

Bottom Line 

Many believe that investing must be complicated to work. 

Not true. 

Success in the markets comes down to these four things in order: 

• Have a plan. 
• Execute. 
• Adjust. 
• Repeat. 

You got this — I promise. 

As always, let’s MAKE it a great day. 

Keith 😀