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☕️ What Musk said about Optimus will create a new generation of millionaires

May 21, 2025

Howdy 👋

Headlines are trumpeting that the 30-year US Treasury Yield has now topped 5% while the 10-year has hit 4.5% on deficit concerns. (Read)

Nice try.

US debt has hit those levels because buyers are walking away as traders reprice risk, something we’ve been talking about since last Sunday when I warned you very specifically about it together with a downside test this week.

Remember how the game is played.

Highly leveraged traders – aka the big money - borrow boatloads of moola to magnify returns.

When rates rise, the vigorish costs more so they sell to a) reduce the risk of institutional size margin calls by reducing their VaR (Value at Risk) and b) because every dollar they'd otherwise fork over in interest to pay for their leverage costs more while also becoming a performance drag; both of which reduce bonus potential. 🤦‍

What to do?

Funny you should ask.

Here’s my playbook.

1 – What events there mean for your money here

I sat down for a wide-ranging interview with my colleague, the fabulous Scott “the Cow Guy” Shellady yesterday. He wanted to know how and why the spike in Japanese government bonds would impact investors here.

It’s not something that’s widely talked about because most financial advisors, frankly, haven’t got a clue how international markets work. But probably should be, imho. (Watch)

This really IS a bigger deal than people think which is why smart investors will pay attention – heck, already are.

Keith’s Investing Tip: Low-beta, high divvy stocks are going to be your best friend if there’s some volatility ahead like I think might be the case. Hopefully you’ve got your own shopping list, but you know where to find me if you don’t (and you’d like mine).

2 – Just how dirty is UnitedHealth?

Now reports are surfacing that the company secretly paid to reduce hospital transfers. (Read)

As I noted on April 17, this company is a disaster and what’s happening is very likely the tip of the iceberg.

Shares are down –29.18% since which means anybody who paid attention and who got on board by shorting the stock or buying putskies – a bet that a stock will decline - is probably doing quite well at the moment.

Anybody who stayed on board, well… 🤦‍

Here’s something else to think about while we’re on the topic.

Stuff like this is rarely confined to a single player when what’s happening is very likely a wide-ranging industry pattern of behavior. UNH is simply the one who got caught first.

UNH gets a rare “avoid like the plague” from me as do other insurers who are undoubtedly at the risk of similar blowback.

At the risk of sounding like a broken record, dividend investors beware.

Keith’s Investing Tip: People playing “long only” - meaning they only buy stocks - are quite literally missing half the profit potential. Stocks go up AND down which means there’s plenty of profit potential in both directions. Learning to use options can help but there are other ways to control risk if ya don’t wanna.

3 – What Elon said made my jaw drop

Unka Elon had two interviews recently — CNBC and Bloomberg. Here are a few of the key takeaways:

Tesla will launch its robotaxi program by the end of June, starting with ~10 vehicles in Austin, with expansion planned for LA and San Francisco.

Musk confirmed Tesla is open to licensing FSD and is already in discussions with other automakers – exactly as I said would be the case, btw. Very similar to making charging the de facto standard and the real time database the most valuable of its kind… wait till insurance companies have at it (which I can all but guarantee is coming).

As mentioned in yesterday’s M5, Musk said he will focus more on Tesla and his companies going forward. About time, imho.

Both Tesla and xAI will continue purchasing GPUs from Nvidia and AMD to support their growing AI capabilities.

But the biggest development is one being treated as an afterthought by the mainstream media which has all but glossed over it.

Optimus, Tesla’s humanoid robot, is now getting close to being able to learn tasks by watching video—a major leap in embodied AI development.

Love him or hate him, Musk made it very clear that we “ain’t seen nothing yet.”

I agree.

Robots that learn by watching represent a massive leap forward — not just in AI but in how machines interact with the real world. Observational learning is a deeply human skill. It's how we tie our shoes, cook a meal, or fix a leaky faucet — without needing reams of code or instructions.

If Tesla's Optimus can watch and learn, we're talking about the next level in embodied AI: machines that gain contextual understanding and begin forming real-world logic from experience. That’s a whole different ballgame than preprogrammed steps.

It could also be the first real step toward robots' reasoning in quantitative and adaptive terms — recognizing patterns, adjusting on the fly, even innovating. Not just repetition, but cognition.

This isn’t just a better robot — it’s potentially a new worker class, a new economic layer... and a new AI frontier that investors would be incredibly foolish to ignore.

Now, I get that many folks can’t get by Musk himself and respect that 100%.

I don’t have the luxury of taking sides in my capacity as an investment strategist which is why I’d be remiss if I didn’t say what I’m gonna say next.

I hope you're on board or think seriously about getting on board because a few years from now I think it’s very likely that anybody who isn't will rue the day they "coulda" bought Tesla for "just" $344 a share.

MyPOV: I hear from investors time and again about how much they regret not taking action when they had the chance. Imagine, for example, putting just $1,000 into Nvidia in early 2011 when it began to shift almost imperceptibly into AI. That'd be worth $336,300 today. The same $1,000 put into SPY would be worth $4,633.63. You can do the math...that's a life changing difference for anybody who acted and for those who could have but didn’t.

Btw, the OBA Family is ahead of several similar, life-altering developments in a variety of industries and building a list I call “The Must Have Portfolio™.” Hopefully, you’re making similar moves with your own money.

4 – Google… don’t forget about us!

At its I/O event, Google dropped AI Ultra, a $249.99/month subscription that gives you access to its most advanced Gemini model, some experimental toys, 30TB of storage you’ll never use, and—you guessed it—YouTube Premium. (Read)

The company also showed off Veo 3, their AI video generator with audio, and rolled out a $150 million partnership with Warby Parker to build smart glasses with real-time translation. That sent Warby shares up 15%, because apparently, nothing gets investors excited like déjà vu in eyewear.

Let’s call it what it is — more “me too” tech dressed up as moonshots.

Another model.

Another demo.

Another pair of glasses that might finally not make you look like a cyborg—maybe. Everyone’s racing to be second to everything, and Google’s leading the pack… from behind.

Unless smart glasses magically become a must-have platform, this doesn’t move the needle. People said virtually the same thing about GoPro back in the day.

As for Google delivering that kind of breakthrough?

I’m not holding my breath and would encourage you not to either.

I’ve avoided Google for years nothing I see here changes that. They used to lead. Now they just follow... and not all that well imho.

5 – Cybersecurity isn’t sexy… Until you need it

By then, it’s too late. 

Just ask Marks & Spencer.

British retailer Marks & Spencer said a “highly targeted” cyberattack will reduce its fiscal 2025/26 operating profit by £300 million, or approximately 30.5% of annual earnings. (Read)

The company reported that the breach, which occurred over the Easter holiday, disrupted online sales and left physical store shelves bare. In response, CEO Stuart Machin announced that M&S will accelerate its existing technology overhaul, condensing a two-year transformation plan into just six months.

M&S said the estimated loss would be offset in part by insurance, cost management, and other trading actions. However, the financial damage and ongoing disruption have already erased more than £1 billion in market value, with online operations expected to remain affected into July.

Machin declined to confirm whether a ransom had been paid but attributed the incident to “human error.” He emphasized that the company is now moving forward, calling the event “a window of disruption” that will fast-track long-term tech initiatives.

Translation? 

Cyber got ignored, the bill came due, and now the C-Suite suits are trying to spin it as a “good thing.”

Keith's Investing Tip: Any investor who isn't taking cybersecurity seriously isn't paying attention to the world we live in. A single click can cost billions which is why I believe that every investor portfolio should include exposure to cybersecurity — not just as a hedge, but as a cornerstone. 

It's not like this is a surprise.

My fave has returned 63.90% while BUG - a popular cyber security ETF - has tacked on 12.47% since I suggested you have a look 8/27/24 in the 5 with Fitz. (See #5). The SPX, by comparison, has returned 5.59% over the same time frame.