☕ Buy this, not that & why

Good morning! 👋

The indices are all higher this morning in early going. 

Hooyah! 

The markets tend to run 83-85% of the time in the direction created by the first 5 trading days of a New Year. Which, if that holds, sets us up for another run higher on the heels of two 20%+ years in a row.  

What does that look like? 

To a point I made in last night’s short (watch) I expect a run higher into Q2 that’ll be followed by a brief rest and another charge higher into 2026, absent a force majeure or “black elephant” event (both of which I’ll be sharing in the January Annual Outlook a few days from now).  

The pre-holiday selloff plays a big role in making that possible. 

If you’re tempted to sit on the sidelines – and many people are – I’d urge you to rethink that premise.   

Missing opportunity is always more expensive than trying to avoid risks you can’t control.  

Here’s my playbook. 

1 – Walmart: this is the year its attack on Amazon gains steam  

I sat down with the super smart Stuart Varney earlier this morning to discuss why I think this could be Walmart’s year and not so much Amazon’s. The former is clearly gunnin’ for the latter. 

We also talked Tesla briefly. (Watch) 

Speaking of Tesla…  

2 – A wonderful Tesla discussion with Herbert Ong 

Herbert Ong, a super smart, super knowledgeable Tesla expert kindly invited me for a wide-ranging, opened ended discussion recently. It was one of the most enjoyable interviews I’ve ever done… and super interesting too. 

We talked about Tesla in quite some detail, but also my take on investing, valuations, and the MAG7 among other things. So, I invite you to grab a cuppa ☕️ and enjoy! (Watch)   

3 – The prospect of “narrower” tariffs lit a fire under chips this morning 

Don’t say I didn’t tell you this was coming, but… I did.  

The threat of comprehensive tariffs is being pared back, certainly narrower than originally anticipated, according to a Washington Post report.  

Talk about lighting a fire under chip makers! 

Hopefully you’ve taken advantage of the lull as I’ve repeatedly encouraged you to do over the past few weeks. If not and you’d like some help or even a swift (encouraging) kick in the rumpus to get you started, I’m here. 

Keith’s Investing Tip: Many people instinctively wait for the perfect time to invest, not realizing that investing under imperfect conditions is the real path to profits. If you’re a trader, that’s one thing and perfectly okay. Volatility is your lifeblood. But it’s quite another thing if you’re an investor, in which case volatility becomes a major source of profit potential. 😃 

4 – Is Morgan Stanley talkin’ somebody’s book or their own?  

Morgan Stanley is out with a report saying that Palantir could take a 25% hit. (Read) 

Something’s off. 

Wall Street has a long and very nasty habit of “talking it’s book” meaning promoting specific investments or story lines that they have a vested in or would like to. 

Typically, it’s because the firm or its clients have a significant position or because the company is involved in underwriting it. 

I am not saying that’s happening here or that Morgan Stanley is doing so but this development strikes me as a little too convenient given the firm’s history and the timing. 

• In January 2024, Morgan Stanley agreed to pay $249 million in penalties to resolve investigations by federal prosecutors and securities regulators into the firm's practices. The investigations found that at least one employee at the bank had misused confidential information in connection with block trades of stocks by some of its customers. 

• In May 2022, Morgan Stanley was accused of front-running by the Financial Industry Regulatory Authority (FINRA) and was fined $3.25 million for violating securities laws. 
• In May 2009, a senior trader employed on Morgan Stanley's London trading floor was banned and fined by the Financial Services Authority (FSA) for "deliberately disadvantaging his customers by 'pre-hedging' trades without their consent," which is a form of front-running. 

I don’t think it’s a stretch to imagine that Morgan Stanley’s largest clients or even the firm’s traders themselves missed a good portion of Palantir’s run up (like many big Wall Streeters and investors did). Nor that they want to create… ahem, suggest… a pullback then use the opportunity to buy shares off anybody who panics. 

I know what I’ll be doing. 

5 – Why Disney’s really merging Hulu + Live TV with Fubo 

Word is that this is a surprise. (Read)

Not. 

As we have discussed many times, companies that are threatened by bigger, more dominant players frequently engage in M&A activity not to grow, but to survive. 

I think that’s the case here. 

Disney desperately wants to compete with YouTube TV which has 8M+ subscribers and building a virtual multichannel video provider - trying sayin’ that 5x real fast 🤦 - may be the only way they can do that. 

The situation strikes me as more like Nissan/Honda than a smart move. 

Disney is still down nearly ~50% from 2021 post-Covid highs. 

Continue to short/avoid. 

$75 is still my line in the sand, meaning the point at which I’d consider buying shares. 

Meanwhile, I’ve got far bigger fish to fry with far more dynamic and considerably bigger profit potential imho. 

Speaking of which, we’re planning to publish the January issue of One Bar Ahead® this Friday and, with it, new recommendations, research and more. There’s no pressure, of course, but folks tell me it’s made a huge difference in their lives and helped ‘em become more confident, effective investors. If that’s of interest, I’d be honoured. (Learn More) 

Bottom Line 

Markets aren't the issue.  

Your mindset is.  

No excuses. 

You got this - I promise. 

As always, let’s MAKE it a great day and an awesome year! 

Keith 😀 

PS and on a serious note: It’s come to my attention that a nefarious cast of characters is using AI to mimic my voice and my writing style to solicit folks by phone and by DM for some sort of secret horse-hockey, sh!tcoins and more. Please DO NOT FALL FOR IT! Report and block all imposters immediately. I write the 5 with Fitz and One Bar Ahead® and that’s it. No private chats, no super mysterious trading systems, crypto coins and schlock. Period.