“What part of this chart do you not understand?”

People frequently ask me why I am so laser focused on Apple and Microsoft, including the super-savvy Stuart Varney this morning ahead of today’s opening bell. (Watch)

The path to profits is super simple. Buy the world’s best companies making “must-have products and services” when nobody wants ‘em & sell when others can’t resist buying ‘em.

Look at the chart.

Look at the chart.

Look at the chart.

Oh… and just in case I am not making myself clear… look at the dang chart!

Let’s review:

• MSFT: Revolves around bringing people together. Estimates vary, but a staggering percentage of the world relies on Microsoft products. According to Statista, 95+% of Fortune 100 companies use Azure; Teams is used monthly by 270 million people; and Office 365 controls nearly half of the office productivity software market. Moreover, the company’s newly released ChatGPT is a Google killer. Big data, medicine, AI… MSFT’s top line was $198,270,000,000 in 2022 which translates into $543,205,479 per day.        

• AAPL: This is the consumer component. Apple has 2+ billion active devices in operation worldwide, which doesn’t sound like much in an era where the word “trillion” is batted around without much thought. But here’s the kicker… that’s 25% of the world’s population. Apple could add a billion dollars topline just by changing a few lines of code, practically anytime it wants. Apple is a cash machine that produced $394,320,000,000 in revenue in 2022 which works out to $1,080,350,685 per day, also according to MacroTrends.

Investing Action Item: Investors do not understand the scope, scale, and opportunity stocks like Apple and Microsoft represent—and for reasons known only to themselves would still rather take their chances with the likes of Google, FedEx, and Intel instead. All are household names, but the latter three are considerably riskier than commonly believed. Upgrade to paid

Buffett: Buybacks & the financially illiterate

Warren Buffett weighed in this past weekend with some pretty dang harsh words for anybody criticizing corporate buybacks by calling ‘em “economically illiterate” in the annual Berkshire Hathaway letter. (Read)

Nice to have company, no two ways about it!

Investing “A-ha”—buy backs are not only a critical part of today’s corporate management, but a powerful investment input when analyzing stocks because buying back shares increases a company’s intrinsic value.

Caught with stinky shoes

Word just got out that Dow Inc. and the Singapore government promised to collect old sneakers and use the recycled rubber for playground equipment. Reuters, smelling a rat, put trackers into some of the shoes and found that they turned up at an Indonesian flea market. (Read)

Reminds me of the recycling ruse we see here in the US: Many Americans diligently separate their trash, clueless that in most places, recycling and trash are collected separately but dumped into the same landfill. Only about 5% of plastic debris is actually being recycled. (Read)

Hmmm.

It’s enough to make you want to invest in companies that can turn trash into cash. 🤦‍♂️

Oh, wait—I did, and so did the OBA Family when I recommended you do so. My favourite is still a super-compelling choice, BTW.

Under Armour: Buy, sell, or hold?

Stephanie Linnartz takes over as president and CEO of Under Armour (UAA) today. Shares have fallen by over 45% over the past year. That’s 3.3X worse than Nike and nearly 5X worse than the S&P 500’s fall. (Read)

Some argue that’s a buy signal, but I have my doubts. Shares are trading at 19.3x P/E, and there’s no dividend. There are simply bigger fish to fry and better companies out there at the moment, IMHO.

Invest like the Swiss if you want to beat inflation

Our leaders talk a good game when it comes to beating inflation, but that’s about all it is to them… a game.

Switzerland is doing something about it. (Read) Three things are key to that nation’s success when it comes to tamping down inflation, all of which we’ve talked about extensively:

1. Control over domestic energy production

2. Prioritizing local production and using price controls to give preferential treatment to all things “made in Switzerland”

3. Pricing contracts that help isolate businesses at risk from major price fluctuations and, in doing so, help protect consumer demand

Invest like the Swiss… in companies making must-have products and services, capable of protecting margins and maintaining customer demand instead of stomping all over that.

It’s a pretty short list at the moment.

Bottom Line

The best way to create your financial future is to create it.

Start now.

As always, let’s MAKE it a great day!

Keith 😊

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