☕ What to do about Gold? Plus, the biggest earnings week is here
Jan 26, 2026Howdy! 👋
Big week on deck.
Roughly 20% of the S&P 500 reports over the next 5 days.
We’re gonna get a little of everything… tech, AI, energy, industrials and more.
As noted in yesterday’s Sunday evening short, we’ve had 10 consecutive quarters of growth. Can we get 11?
I think so.
Roughly 13% of S&P 500 companies have reported, as of last Friday, with 69% reporting positive revenue surprises and 75% reporting positive EPS surprises. The blended growth rate is about 8%, but that’ll probably get pulled higher as stronger names report 20%+.
I feel like a Viking at an “all you can eat buffet.”
Investing in optimism beats cowering in pessimism.
Here’s my playbook.
1 – Biggest earnings week of the year, plus what I make of Apple and Tesla
I sat down with the venerable Stuart Varney ahead of today’s opening bell, who asked me for my thoughts on this week’s earnings along with my thoughts on two highly anticipated earnings reports: Apple and Tesla. (Watch)
I think the former will make a potentially earth-shattering announcement at WWDC and the latter is making so much earth-shattering progress that he’s got to start on another planet… and is!
Not surprisingly, I plan to buy more of both if the markets hand me that opportunity.
You?
2 – Buy CoreWeave?
Team Jensen is apparently investing another $2 billion in CoreWeave – an AI cloud computing startup – to build 5 gigawatts of “AI factories” by 2030. (Read)
Many folks are buying CoreWeave and shares have popped 12% as I type.
They’re missing the point.
CoreWeave is still a middleman, a high-octane one, but a middleman, nonetheless.
I’d rather own Nvidia… because it’s king of the jungle.
Big difference.
If there were a services ETF – as in plumbers, construction workers and electricians a.k.a. “the trades” – I’d buy it in a heartbeat, but that doesn’t yet exist.
Hmmm.
Keith’s Investing Tip: Skip the hype chase because that almost never ends well. No matter how you cut it, GPUs are the bottleneck and the opportunity.
Not all chip stocks are the same, though.
Be sure you understand the difference and, if you don’t, find somebody who does... at least from an investing perspective anyway. At the risk of sounding like a broken record, I’ll be here if you need me.
3 – Natural gas prices jumped 70% last week – now what?
US natural gas prices jumped 70% last week as a massive polar storm swept through the United States. (Read)
That’s forced emergency intervention and strained power grids.
Just 10 days ago, I said, "the more immediate path to profits for smart investors is natural gas.”
Why?
Natural gas is the marginal fuel that carries the load whenever the grid gets strained.
It’s also the “now” fuel for AI despite the fact that ticker tourists are enamored with nuclear power a decade from now… assuming it gets permitted, built etc.
I understand the idea of chasing big potential, but imagine how much you could earn in rock solid, cold hard cash via dividends in the meantime?
My faves are kicking off ~4% right now AND have plenty of growth potential, too.
Contrary to what many think, income investing doesn’t have to be like watching grass grow. Hopefully you own similar choices in your own portfolio.
4 – China purge… or failed coup?
China’s highest-ranking military officer, Zhang Youxia, was brought down during what is being described as a “purge” of senior military commanders over the weekend. (Read)
My own network of friends in low places said there was a coup underway (that has now failed).
Either way, this is one of the most significant changes we’ve seen in China in years. And very dangerous.
General Zhang Youxia was 2nd only to President Xi in China’s top military decision-making body. He and another general named Liu Zhenli are under investigation for “serious violations of party discipline and law.”
That’s carefully crafted language for something far more serious like… “we’re going to make you and generations of your family disappear because you threaten Xi and his power base.”
Zhang is one of only a handful with combat experience, both men are sons of Communist Party heroes. Both are also Xi’s longtime trusted advisors. The Old Guard.
A few thoughts come to mind given the very Mao-like move.
- Taiwan by 2027 or 2028. Removing Zhang and Liu clears the way for younger generals who are decidedly wolfish and keen to make a name for themselves.
- Defense stocks. Duh.
- TSMC had better get a move on moving production. Beijing is a serious risk to their intellectual property.
5 – Gold: what a mentor taught me
Gold is back in the headlines, hitting even higher highs. (Read)
This time going above $5,100 per ounce.
Why?
The media is billing this as a “flight to safety” but that’s not quite right.
Gold is moving this morning for three reasons.
- Because Chinese traders and their central bank love gold. The move strongly reinforces the rumor mill and the possibility of a failed coup over the weekend. Both will be impossible to verify, of course, but where there’s smoke…
- Extreme leverage. Gold futures on COMEX (part of CME Group) allow traders to control large positions with relatively small margin deposits—often 5-10% or less of the contract value historically, enabling 10-20x effective leverage (or higher in some leveraged products/exchanges); that dramatically amplifies price volatility because it forces shorts to post more collateral (variation margin calls), potentially triggering forced covering and cascading upward momentum.
- Plumbing is broken. Index rebalancing, counterparty risks and physical metal friction – meaning tariffs, central banks, logistics, vaults and so on – prevent clean price arbitrage which means that temporary price dislocations – like the recent rally – can’t clear like they would normally.
Which brings me to what my mentor said years ago.
“Whenever everybody knows something – like, in this instance, gold is going to the moon – it makes sense to look at the other side of the trade.”
I think we’re very close to a sharp reversal.
Long-term drivers like debasement and supply stress keep the trade alive, but near-term risks scream caution.
Many people won’t believe me and that’s okay.
As the old saying goes, you can lead a horse to water….
Two trade ideas.
- Plain ol’ put options on gold could be very profitable when the cascade starts, if it starts. Meanwhile, you’ve got to fight time decay so there is a tradeoff.
- Inverse gold funds, too. The challenge with these is that they’re suitable for day-trades or swing trading but work against you because of the way they’re constructed.
Could gold rally still higher?
Absolutely.
Just keep in mind that every dollar higher is statistically and incrementally riskier.
If you’re good with that, go for it.
Just be aware that there won’t be any warning when the big money reverses.
And nobody will serve cheese with the “whining.”
The odds of getting caught offsides are higher than ever.
Keith’s Investing Tip: Gold is to investors what a popsicle is to kids on a hot summer day. Treat it accordingly. 🤷🏻
Bottom Line
Sometimes what you don’t buy is just as important as what you do!
Let that sink in.
If you are not investing in the best, you will get left with the rest.
Now, let’s MAKE it a great day and start the week strong.
You got this — I promise!
Keith 😀
