☕ Could this be the week Costco splits?

Good morning! 👋 

I urged the OBA Family to be on the lookout for a downside move today in yesterday’s update. And – right on cue – they were shortly after opening only to claw their way back green. 

Excellent! 

Remember, your job as an investor or trader isn't to figure out where the markets go next. It's to recognize that they're in motion, then act on the signals created when that happens. 

Chaos always creates opportunity and the more of the former there is, the more of the latter we have! 

Here’s my playbook. 

1 – Should you worry about Jamie Dimon’s latest warning? 

JPMorgan CEO Jamie Dimon has warned that, “Geopolitics is getting worse.” (Read) 

Should you worry? 

Only if you don’t own defense stocks, at least from an investing perspective. 

My favorite, LMT, has returned 30.34% YTD versus the S&P 500 which has turned in 19.64% as I type. Another is well into the triple digits. 

Hopefully, you’ve got this covered or are at least thinking about it from an investing perspective. If you don’t and you’d like some help, you know where to find me. 

History shows clearly that investing as if the sun will come up tomorrow is very much the way to go. 

2 – Boeing investors right now 

All rights reserved by their respective owners. 

CNBC is reporting that Boeing has put its “best offer” forward. (Read) Meanwhile, BoA estimates the strike is costing the company an estimated $50M a day. (Read) 

Two takeaways. 

1. The “best” offer may actually be a total reset under the guise of national defense (and it won’t be from management mind you) 
2. Housing prices and rent rolls could take a hit in the Seattle area if this continues much longer 

Meanwhile, Boeing stock continues to drift listlessly towards $150, a target I set this past March. (See #4). Now, I’m increasingly thinking $140 or lower, particularly if the strike impacts upcoming earnings the way I think it could. 

Putskies are still the way to go and possibly a LowBall Order at $125 if you’re a glutton for punishment with a super high-risk tolerance. There isn’t much volatility premium so Selling Cash Secured Puts isn’t as juicy as you’d think under the circumstances either. 

Otherwise simply steer clear. 

Sadly, Boeing remains a bug in search of a windshield. 

Keith’s Investing Tip: I hear from many investors who want to go bottom fishing or who think holding on is a good idea. I get it but remember, Boeing is losing $50M a day, perhaps more. A company like Apple generates $919M a day. Just sayin’.💡🤷 

3 – Forget Chinese intelligence, if you’re on social media they’ve already got your number 

The U.S. has proposed a ban on the sale of connected and autonomous vehicles equipped with Chinese or Russian software citing national security risks. (Read) 

We’ve talked about that. 

EVs are rolling sensor platforms which means that any car cruising the world is gathering real time information on a previously unimaginable level. Road signs, maps, structural details, defense locations, stores, the state of our infrastructure and more. 

Here’s the thing. 

The Chinese don’t need all that. 

If you’re on Facebook, Instagram, TikTok or any other social media, YOU (and I because I’m on it too) have voluntarily contributed to the single largest, most detailed targeting, marketing, and disinformation database in recorded human history. 

I don’t think there’s ever been a better excuse to buy cybersecurity stocks, frankly.  

MyPOV: I own very specific defense stocks because I expect ‘em to do considerably better than ETFs like iShares US Aerospace & Defense ETF and, fortunately, many have, but that’s just me. Quite a few folks prefer ETFs and ITA can be better than nothing if that’s your cuppa. 

4 – Smartsheet’s going private (and more will follow) 

Two of the best private equity firms – Blackstone and Vista Equity Partners – are teaming up to buy Smartsheet for $8.4B. (Read) 

Here’s why YOU should care. 

Every company that goes private today means the investable universe of stocks you have access to tomorrow gets smaller.  

Think about that for a moment. 

Great tiny companies often get bought up by bigger players keen to absorb their technology before they go public. So you lose out. 

Established companies often get bought up by private equity with deeper checkbooks and better management. Again, you lose out. 

Unless you own the companies doing the buyin’... 

Make sense? 

5 - Could this be the week Costco splits? 

It’s a story we’ve talked about for a long time. 

Costco could split. 

The company announces earnings on September 26th after the bell and doing so would make a lot of sense given the timing. No doubt Costco executives are watching what’s happened with Nvidia, Broadcom and Chipotle. 

Institutional investors won’t give a rip because they’re very unlikely to sell under any circumstances given the role Costco plays in their portfolios and their investing strategies. 

Individual investors, though, probably care very much. 

A split would make Costco imminently more affordable, encourage new ownership and yes, very likely drive prices higher. 

Game on! 

Calls into next week could be interesting. And what the heck, so could owning a single share. 

Bottom Line 

The biggest obstacle isn't the markets. It's the person looking back at you in the mirror every morning.  

You got this – I promise! 

As always, let’s MAKE it a great day. 

Keith 😊