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☕ 3 simple "buy the best, ignore the rest” stocks

Mar 25, 2024

Good morning! 👋

The markets are down a skosh in early going as we head into a holiday-shortened trading week ahead of Easter. Naturally, the doom and gloom crowd is saying this is sign of things to come.

I couldn’t have a stronger, more different opinion.

The markets are on track for a 5th consecutive month of gains and more new highs.
Despite an overwhelming raft of reasons why this shouldn't happen, we've just come off the best week since December and that's a good thing. SP 500 +2.23%, Dow ~1.97%, Nazzy 2.9%.
There is STILL plenty of upside potential.

Investors would be wise to put aside their fears.

There’s still $4-6T on the sidelines, FOMO is creeping in around the edges and scores of investors need to play catch up.

Investing in optimism beats cowering in pessimism any day of the week.

Tech stocks have caught a bid as smart investors who know what they herald – like we do - go shopping.

Simple as that.

What’s more, the buying looks strong enough that both the Nasdaq and S&P 500 could be green by the time you read this. Whether they stay that way is another matter. Honestly, I’m expecting some sideways price action this week.

I know it’s uncomfortable but the best moments to invest often are.

Here’s my playbook.

1 – 3 easy ways to buy the best, ignore the rest

You hear me talk about this constantly for one simple reason... history shows very clearly that doing so is the true path to profits over time.

There are three criteria:

Companies making “must have” products and services the world cannot live without, not “nice to haves” that are a dime a dozen. They’re usually 1 or 2 in their respective industries.
Fortress-like balance sheets and margin protection power capable of outrunning inflation, pricing pressure and bureaucratic bumbling.
Visionary executives capable of changing consumer behavior and who have an outstanding record of delivering on their vision.

Think Apple versus Peloton, for example.

It's really a pretty short list if you run through it like I did with the super-savvy Stuart Varney this morning ahead of today’s opening bell. (Watch)

And, btw, if you’d like more of where that came from, you may enjoy One Bar Ahead®, my paid research journal for individual investors. There are OBAers in 40 countries around the world so, chances are, you’ll be in good company. 😊

2 – Boeing finally sends execs packin’

Boeing CEO Dave Calhoun is resigning.

Sorta.

Apparently, he’s going to remain until the end of 2024 as part of a broad management shakeup that includes Chairman of the Board Larry Kellner. However, Stan Deal, CEO of the commercial airline unit is getting his walking papers immediately. (Read)

Shares are up $2.29 as I type.

Talk about irony.

I told you there could be a quick reversal in last Friday’s 5 with Fitz noting that “it might be time to bet on a reversal, meaning buy Boeing and consider shorting or avoiding Airbus.”

If you took that trade or something similar, don’t look a gift horse in the mouth.

3 – EU regulators have no game, so they’re punishing companies that do

EU regulators have launched new probes into Meta, Apple, and Alphabet. (Read)

At issue... so-called “anti-steering” rules and the “pay or consent” model.

The former centers on Apple and Alphabet because – say EU regulators – those companies may block businesses from telling users about cheaper options for their products or subscriptions outside the app store.

The latter centers on Meta which charges a premium for an ad-free experience which, according to the boffins, may not provide a real alternative if users don’t consent.

This is getting more ridiculous by the day.

Anti-steering regs are like Safeway being forced to tell you that Walmart has cheaper prices on Fuji apples when you’re shopping in a Safeway store.

The pay or consent case centers on the fact that EU regulators say there “should be” more free alternative options for users. Fine... Peter Luger’s steak house “should” offer more free options on the menu but there’s a snowball’s chance in you know where that’ll happen.

Keith’s Investing Tip: Regulators are often hopelessly behind when it comes to this kind of stuff. Adding insult to injury, very few have ever run successful companies of their own, so they don’t know how competition really works. The fact that they’re targeting Meta, Google and Apple is not an indictment of those companies but, rather, de facto proof they’re at the top of their game. And I submit very compelling investing choices.

4 – Palantir + Voyager Space = National Defense

I’ve been a broken record on this one.

Palantir will continue to chart a path forward that’s grounded in three things: real practical applications, strengthening commercial opportunities, and national defense.

As you can imagine, I was thrilled to see that Palantir’s joined forces with Voyager Space at a time when the need for off-planet security is increasingly critical.

Why?

Voyager operates the only private real estate on the ISS. “Everything else is nation state” noted Matthew Kuta, Voyager president and co-founder as reported by the Denver Post. (Read)

$50.

5 – China just got a whole lot more dangerous

Beijing is doing with American chips what we should have done a long time ago with Chinese chips... banning 'em from government computers. (Read)

China says neither AMD’s nor Intel’s products meet so-called “safe and reliable” standards as outlined in government purchasing criteria.

Riiiiiiggggghhhhhttttt.

What this really tells you is that Beijing believes it has now borrowed, liberated, adapted, appropriated, stolen – whatever term you want to apply - enough tech that it feels it has sufficient knowledge to do without AMD and Intel products.

This makes a) AMD and INTC national defense priorities and b) China exceptionally dangerous.

Invest accordingly.