☕ War, oil, what’s next for gold and a very inconvenient verdict for Meta

Howdy 👋 

If you’re feeling like the markets are a little too calm given everything that’s going on… you’re not alone. 

I share that thinking. 

However and in contrast to many, I see that as a good thing. 

Why? 

Because it means that many investors are looking beyond the conflict. 

Hopefully, you are too. 

History shows beyond any shadow of a doubt that the time to buy great stocks is when most people can’t bear the thought of doing so. 

The legendary Sir John Templeton – who shaped a lot of my thinking over the years – referred to this as “buying at points of maximum pessimism.” 

I simply say… 

Uncertainty always paves the path to profits others can’t imagine.  

Here’s my playbook. 

1 – The Middle East is closer to a tipping point than advertised 

US President Donald Trump wants to bring the war in Iran to a close quickly. And, as a part of that, reports this morning suggest that the Gulf states are signaling they’re ready to handle things themselves. (Read) 

That’s very different from "wait and see.” 

I think it opens up an entirely new set of opportunities in a wide variety of industries ranging from energy to shipping, to insurance, to defense, to tech and more. 

“Keith's Rule of the Back Page” applies in spades — meaning that the biggest, most important and potentially most profitable investments are still buried in the "back pages" where very few investors think or dare to look. 

Do NOT miss the next leg up! 

Keith's Investing Tip: You don't need headlines because those are almost always a day late and a few trillion dollars short. It's far more profitable to understand the setup and to concentrate on that. 

I’ll be here if you need me. 

Speaking of which… 

2 – The oil market is already telling you what's up 

It’s in what is called “backwardation” meaning that near-term supply is tighter than future supply and traders are willing to pay more today than they are for delivery down the road. (Read) 

We’ve seen this before—2007, 2018, even briefly coming out of the pandemic. 

Each time, smart energy investors didn’t debate it. Instead, they bought quality producers, services, and infrastructure while everyone else was still arguing about headlines. 

For example, from the 2007 setup into 2008, names like SLB and XOM delivered double-digit gains before the broader market caught up. In 2018, energy ripped while the S&P churned—select service names moved 20–40% in months. Coming out of COVID, the playbook was even clearer—XLE ran more than 100% from the lows while many investors were still hiding in cash. 

Long time readers will recall my remarks at the time on each quite clearly and – hopefully – profitably too. 🎯 

Again, and to the point I made in #1 today, smart investors got paid for acting early and - yep - investing in optimism, something you hear me talk about a lot. 

Contrary to what most news anchors and pundits would have you believe, backwardation isn’t academic but a very real investment opportunity because traders are reaching for barrels now instead of promises later. 

Plus, it lines up nearly perfectly with the geopolitical backdrop. 

Stocks will likely rip higher as oil drops back to $60. 

You know what to do - ‘cuz we've sure as heck talked about that enough lately. 😉 

Keith's Investing Tip: The smart money leaves footprints. Price is one of them. 

3 – Meta finally gets a taste… and the market shrugs 

A jury just cracked the door on Big Tech’s long established immunity shield by ruling against Meta. (Read) 

About time. 

I’ve lived this one and it’s been no end of frustrating to say the least. 

My counsel and I have repeatedly asked Meta to take down a group run by a particularly nasty group of criminals impersonating me using stolen images, trademarks, proprietary research… even pictures of my dog… to lure unsuspecting folks into giving ‘em money for whatever scam du jour they peddled. 

And suddenly, after nearly a year, Meta recently did. 

Coincidence? 

I think not. 

The US jury verdict sets up a massive fight over immunity from the Digital Rights Act – one that I think is long overdue. It sure as heck won’t be the last, IMHO. 

So why hasn’t Meta fallen? 

Because Wall Street doesn’t price in what it can’t model. 

We’ve seen this movie before with companies that pushed the limits until reality caught up—Enron, WorldCom, Tyco, Adelphia, Lehman and Bear in ’08, Wells Fargo’s fake accounts mess, Valeant’s pricing games, Theranos, FTX… and more recently other names that treat users and data like collateral damage. In each case, those same stocks held up because the numbers worked… until they didn’t. 

Meta is a different animal, though. 

Team Zuck prints cash, controls distribution, owns attention at global scale, and sits at the center of the AI buildout whether people like it or not. That gives Wall Street every incentive to defend it—models get stretched, risks get discounted, and narratives get reinforced because there’s simply too much money tied to it (and to be made from it). 

Courts don’t care about any of that, though. 

So you’ve got a divergence setting up—meaning that markets will support the stock as long as they can, while legal pressure builds in the background. 

My experience is that kind of tension doesn’t tend to resolve gently. 

I respectfully submit that you think very, very carefully if you own META. Seems to me that this is not a “set it and forget it” name anymore.  

Hmmm... 

Keith's Investing Tip: What gets ignored today usually gets repriced tomorrow. Don’t kid yourself. 

4 – Gold is doing exactly what it always does when you see this setup 

People want gold to be a safe haven, but the problem is that it isn't when liquidity tightens. 

That’s when it becomes a source of funds. 

Gold is declining again in the overnight markets as I type. (Read) 

We’ve seen this movie before. 

Gold has a very real history of falling hard when conditions shift.  

For instance, in 2013, it dropped nearly 30% in a matter of months. From 2011 to 2015, it lost roughly 45% peak to trough. Go back further and you’ll find similar double-digit declines when liquidity tightened and confidence shifted.  

Don't believe me? 

I get that a lot. 

In the early 1980s, gold fell more than 60% after its blow-off top as inflation cooled and rates surged. Even in the late 1990s, it ground lower for years, losing roughly 40% as capital chased growth elsewhere. 

Metals are like that and gold specifically... it's inevitably the same outcome when the backdrop shifts. 

Trade Idea: Stay with gold putskies. Seems to me that there's a lot more downside here than most are willing to admit. And if you don’t want to do that, at least take some off the table if you haven’t already. 

5 – The latest Social Security “solution” solves nothing 

A new proposal caps Social Security benefits at $100k. (Read) 

Sounds responsible… until you think about it for more than 5 minutes. 

Proponents insist that more retirees would be affected by the SFL over time and insist that the top 1% of couples will receive 5% less in benefits on average by 2030 with no impact on the bottom 90%. They also suggest that would shift to a 7% benefit reduction in 2040 for the top 1% with no impact on the bottom 80%; and to a 24% benefit reduction for the top 1% in 2060 with no impact on the bottom 70% of households. 

My take is different. 

Americans paid in and they deserve every dollar they are owed regardless of income or economic strata. 

This is a priorities problem. 

Anything else is politics dressed up as policy. 

History shows very clearly that ideas like this inevitably risk becoming a backdoor to broader cuts that weaken Social Security rather than protect and strengthen it for future generations. 

I say take it outta Congress’ collective hide for raiding Social Security with bad policy for decades. 

The “you know what” inevitably flows downhill and that is the real problem that nobody wants to talk about here. In other words, the gap won’t get fixed inside the Beltway by either party but will get pushed onto the American public (again). 

If you don’t take responsibility for your own future, somebody else will – and I can almost guarantee you won’t like the result. 

Keith’s Investing Tip: Build your own version of Social Security by investing early and often in companies that pay you to grow and which compensate you handsomely for the risks you take as a shareholder. Never outsource your future to politicians no matter what your party or theirs. 

People tell me that One Bar Ahead® has helped ‘em do that but if you’re content with the results you’re getting, GREAT! Many investors are leaving a lot on the proverbial table and having a far rougher go of it than needed. 

Bottom Line 

Investing is about focus, not noise. 

•       Plan 
•       Execute & adjust 
•       Repeat 

You got this – I promise! 

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

Keith 😀