Straight to your inbox from Keith himself!

*Trusted by 20,000+ savvy investors in 36+ countries (and counting)

☕ Another day, another record – hopefully you’re on board!

Jun 05, 2024

Good morning! 👋

ADP payrolls are down (which means the economy stinks) but the markets are up (which means that traders think this is good news) because it’ll make the Fed more likely to cut rates.

So, off to the races we go!

The action feels a bit weak so I think conditions may be split by the time you read this with – my guess – the Dow down but the S&P and Nazzy remaining higher. Then from there, the S&P 500 may give up ground while the Nasdaq stays green.

I say that because the US10YR has risen a skosh to 4.347% as I type which means that the cost of leverage (big traders use to magnify their returns) is going up. So they’ll likely do some selling to avoid colossal margin calls tonight.

Is your head spinning yet?

No worries if it is... I’ve been doing this 44+ years now and there are days when mine does, too.

Your smartest move – and the one you want to make – is to take a deep breath.

Stay focused on the bigger picture and the profit potential that goes with it.
Leave the short-term, lottery-like nonsense to those who want a ticket.

The markets still have a lot of pent-UP energy.

Get it? 😊

Here is my playbook.

1 – Payrolls down, markets up

SOSDD – same old story, different day.

ADP reported this morning that private payroll growth was just 152,000 in May, far less than expected. (Read)

What interests me, no scratch that, concerns me is more like it... is that nearly all of it came from the services sector with goods producers – the people who make stuff – accounting for just 3,000 slots. Manufacturing actually lost 20,000 jobs as did information and professional services.

What now?

Traders are using this report as “bait” because they know that the much bigger and more widely watched BLS nonfarm payrolls count comes out Friday.

If they’re right and that report shows more weakness, they’ll keep buying. If it comes in hotter than expected, chances are they’ll sell into the weekend.

MyPOV: Personally, I’m a big fan of watching from the peanut gallery. This kind of shenaniganry does not impact the investment case for anything I own. So, there’s no need to do anything stupid in the heat of the moment. Pass the popcorn! 🍿

2 – Ron Baron and I agree on Musk’s pay

Ron’s in support of Musk’s $56B pay package as am I. (Read)

It’s nice to have company.

People are castigating Musk, Tesla’s Board, and seemingly anybody they can pin for malfeasance.

What they should be focused on is the fact that Musk did what many thought was impossible when they awarded him the pay package. And, along the way, achieved quite a few BHAGs – big hairy audacious goals.

There would not be a Tesla without Musk, a point many of his harshest critics seem to have forgotten including one I watched recently telling off another in the grocery store, then driving off in a huff... in her Model Y. 🤦‍♂️

I still think Tesla triples a few years from now.

3 – New National Stock Exchange in Texas – hooyah!

Citadel and BlackRock plan to launch a new national stock exchange in Dallas as a way of countering an over domineering NYSE. (Read)

Good!

The NYSE and Nasdaq have long held a monopoly on new listings and are increasingly onerous to companies and investors alike.

I say break up the club and open a new one!

4 – Another day, another Nvidia record

I really feel for the naysayers; it must be tough to be so wrong for so long.

NVDA has hit another record in early going this morning and is now trading north of $1180. I think there’s a good chance it takes out $1200 today.

The Motley Fool asks if billionaires are loading up ahead of the 10 for 1 stock split but I think the story is far simpler than that.

Savvy investors are.

Being a billionaire isn’t a requirement.

NVDA, btw, has returned 204.59% over the past 12 months versus 25.85% from the SPY, a popular indexers choice.

The game is a long way from over, especially with the split coming.

Keith’s Investing Tip: Buying great companies never goes out of style. You can have results or excuses, not both. If you’re worried that it’s expensive, slow down your buying, buy fewer shares, or even fractional shares. TACTICS are how you manage risk.

Speaking of which, I’ll be sharing a new recommendation later this week and would love to earn your trust, goodwill, and business if that’s of interest. (Learn more)

5 – Prevent a KRACK attack

Most people have no idea how vulnerable they are.

I didn’t.

You see, I got clobbered in the Tokyo airport a while back via a KRACK attack launched over Narita’s wireless network.

A KRACK attack, in case you haven’t heard the term, happens when a bad actor manipulates a WiFi’s protected access via encryption keys used to establish a secure connection that allows ‘em to filch data when in close enough proximity.

Anyway, I had quite the mess to clean up just 10 hours later when we landed in the US.

I saw messages from my friends asking about the Nigerian princes who were apparently holding me hostage, heard from friends who’d been fished by crypto clowns promising to invest for ‘em and more. Even my bank wanted to check in!

There are a couple of simple things you can do to help make your information safer when you’re out and about.

Start by turning off your WiFi in public areas, especially if you’re not connecting for any reason.
Turn off “auto-connect” and file-sharing, both of which can often be conveniently turned on by helpful programmers with each update. And do NOT connect to sensitive stuff like your bank account or key corporate systems if you can help it.
And while you’re at it, keep your Bluetooth off, too. This helps prevent BlueBorne attacks which are designed to allow the bad guys to take control of your devices by exploiting weaknesses in Bluetooth (which at this point is pretty dang dated).