Everybody’s betting on failure, but what if—gasp—the markets go up from here?

Everything depends on the debt ceiling negotiations.

Speaking personally, I think it’s terribly irresponsible that we’ve gotten to this point (again). The economic brinkmanship is just disgusting, especially with the fate of so many hanging in the balance.

Speaking professionally, there is a bright spot.

Two, actually.

First, consumer sentiment is plumbing 6-month lows.

That’s almost always a contrarian bullish signal. Remember, studies overwhelmingly show that retail investors buy when they should be selling and sell when they should be buying, so... voilà... if you know the psychology is so negative, then it makes sense to flip that around.

Second, discretionary investors are so underweight stocks as to be laughable.

In fact, the latest numbers I saw over the weekend suggest that the number is just in the 9th percentile. I had to look twice because we’ve seen this before... at the base of the post-Internet Bubble crash, the base of the Global Financial Crisis, and the base of the COVID Bottom.

Once again, people have gone to the sidelines because they think they’re being “safe,” but the real risk for anybody trying to call “the bottom” is being left behind.

Buy the best, avoid the rest!!!

Reinvest.

Smile!

Paul Tudor Jones said the Fed is done... but what he said next is music to my ears

Billionaire investor Paul Tudor Jones caught my attention when he said the Fed was done. (Read)

Great, I thought to myself, I’ve got company.

What he said next was music to my ears.

The markets will shoot higher.

OBAers will recall that I laid out this scenario in the January 2023 update, including a mid-year pivot that I clearly identified using the predictive math that forms the backbone of my research.

If you’d like to “look ahead” too, I’d love to have you on board. Upgrade to Paid

Radical, revisionist, or derivative? Tesla stumps the auto industry

Tesla’s “unboxed assembly process” is a potential game-changer, but expert onlookers aren’t sure what it’s gonna be: radical, revisionist, or derivative. (Read)

As reported by Reuters, one expert called the new process “revolutionary” while others doubt that Elon Musk can really reach his goal of making drastically cheaper EVs.

Either way, betting against Musk is what industry professionals call a “widowmaker” trade—meaning everybody who’s tried has failed.

You know what to do.

Another nightmare for EV proponents

In related news, the average American cannot afford an $80k EV, so they’re keepin’ their gas-guzzling, piston-clanking monsters longer.

According to CNBC, “The average age of a consumer vehicle on US roads rose by more than three months—the highest year-over-year increase since the Great Recession in 2008-2009—to 12.5 years this year.” (Read)

Doh. 🤦 In this high-inflation environment, Americans are cash-strapped, and many barely make ends meet... so what the fruitloops are they expecting??!!

Unka Elon has a killer instinct for the zeitgeist.

Betting against him today is like betting against Steve Jobs back in the day.

Energy is flush with cash

Last weekend, natural gas transporter ONEOK agreed to buy US pipeline operator Magellan Midstream Partners (MMP) for about $18.8 billion, which will expand its operations into transporting crude oil and refined petroleum products like gasoline, kerosene, and fuel oil. (Read)

So?

The deal isn’t the point to focus on.

Instead, what you want to concentrate on is the massive cash reserves oil majors have built up.

Why?

Because huge piles of cash are an indicator of what’s to come when they start spending it. My favorite energy company ended the first quarter with $15.8 billion in cash, up from $7.1 billion just two years ago. Shares have returned 100.1% over the past 3 years, even after all the selling, according to Eikon. By contrast, the S&P 500 has turned in just 44.58%.

More than double.

U-rah!!

Instead of drilling for the sake of drilling, like they’ve done in years past, the world’s best energy companies are showing more discipline now. That gives ‘em multiple options like investing in a capex project, returning cash via dividend, or acquiring companies (a HUGE deal since credit is expensive now).

And the dividend we receive in the meantime will undoubtedly put a huge smile on your face, like it does on mine. Or at least I hope that’s the case!

Bottom Line

The irony of banks teaching everybody that money is an illusion!!??

Focus.

Learn.

Act on what you know to be true.

Now and as always, let’s make it a GREAT day!

Keith 😊

P.S. Thanks to everyone for the fabulous messages last week as we travelled to Newport, RI to watch our oldest son commission into the US Navy. It’s humbling as all heck to watch our boys charge into the world!

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