☕ Don’t fall for it, a new IPO to “take out Nvidia”

Good morning! 👋 

Both the S&P 500 and Dow notched new records yesterday following remarks from Unka Powell who indicated two more rate cuts – a quarter point or “25 bips” in Wall Street Speak – by year end if the economy behaves the way his data wizards and their busted models anticipate. 

The news cycle is trumpeting a break with past trends noting that this was the first positive September for the S&P 500.... wait for it... since 2019. 🤦‍♂️ 

But hey, it’s still great and I’ll take it. 

What’s next? 

That’s the biggie. 

The risks are clearly to the downside from a macroeconomic perspective – and we’re seeing that in early going this morning as I type. Yet, in the same breath, opportunity is almost always to the upside. 

Remember...

Here’s my playbook. 

1 – Ford gets an upgrade, should you buy it??!! 

Goldman Sachs has upgraded Ford saying that the company’s growing software, services, and Super Duty vehicles are tailwinds. (Read) 

I have been in this game too long to believe in coincidence. And this report reeks of convenience. 

Goldman has a long and not so glowing history of allegedly trading ahead of or even against clients, favoring select analysts and sharing confidential information with other traders. 

Issuing an upgrade now makes me wonder whose wallet is in it this time? 

Don’t forget that this is the team that CNBC said made a “big call” to clients to hedge against a market decline in mid-March 2024. (Read) 

The S&P has risen 12.61% since then which means that anybody who listened got caught offsides and, hopefully has learned a super important, albeit expensive lesson. 

Always do what Wall Street does, not what it says. 

If big houses are openly encouraging you to buy certain stocks, odds are better than average they’ve got favoured clients, house money and funds going the other way. 

But back to Ford. 

As I noted a while back and again in yesterday’s update (See #4), Chinese competitors can design, build, and field superior offerings for a fraction of Ford’s production cost alone. Tariffs are a pipe dream.  

Putskies, short or avoid. 

Ford is dangerously close to becoming the Intel of the automotive world imho. 

2 – Don’t fall for it: A new IPO to “take out Nvidia” 

Cerebras filed for an IPO, to trade under “CBRS” on the Nasdaq. Reports are bulling, err, billing, the company as an Nvidia competitor. (Read) 

That may be, but it doesn’t strike me as very likely and certainly not any time soon.  

Cerebras has just $78M in revenue and a single customer, Abu Dhabi’s G42, which accounts for 87% of revenues through June 30th, 2024. Cerebras lost $127.2M last year and has already dropped a cool $66.6M through the end of Q2 this year. 

Nvidia, on the other hand, is the world’s 3rd largest company by market cap; it’s led by a visionary with deep experience and a long tenure. It logged $60.9B for fiscal 2024 and has thousands of customers around the world who literally can’t get enough of what it makes. Nvidia's revenue for Q2 2025 was $30.04B. 

Still, Wall Street loves a good IPO. 

Should you buy it? 

Only if you like your money making other people rich, not the least of whom include lawyers, investment bankers and Cerebras insiders. 

Just sayin’... 

MyPOV: IPOs these days are exceptionally dangerous for individual investors and so rigged that they make an old-fashioned corner bookie look tame. Wait a quarter or two for Cerebras to prove itself as a public company. Then buy in if you’ve still got the itch to do that. 

3 – Boeing broke $150 earlier today 

Reports are now swirling that more than 40 operators are apparently using faulty rudder parts in their 737s. (Read) 

It’s a super tough situation. 

Honestly, I don’t know how you make up for years of incompetence short of a full ground stop and taking every single aircraft apart to effectively recertify it. 

This isn’t exactly like recalling bad milk. 

The rumor mill is also in high gear that Boeing may be considering selling additional stock to raise an estimated $10B in cash that it desperately needs. And media sources are beginning to pick up on that. (Read) 

Meanwhile, the pairs trade idea (Long Airbus / Short Boeing) I suggested a while back continues to play out. Airbus shares have returned 10.67% over the past 12 months while Boeing shares are down –21.54% over the same time frame. 

$140 or lower – I wonder. 

Putskies. 

4 – Record # of CEOs out the door 

A new report from Challenger, Gray & Christmas found that nearly 1,500 CEOs had announced their departure through August, the highest YTD tally on record and up 15% from last year which was also a record. (Read) 

It’s being spun as something to do with economic uncertainty, but I think there’s a much bigger problem at hand which is why it catches my attention. 

Technology is moving so fast and the changes that come with it are so pervasive that an increasingly large number of “old dogs” can’t learn new tricks. So they’re packing it in. 

Keith’s Investing Tip: Investing isn’t just about the money. Finding quality companies means taking a hard look at quality CEOs, at least to my way of thinking. Names like Karp, Cook and Dimon stand in sharp contrast to former Peloton CEO John Foley and now benched former Nike CEO John Donahoe.  

5 – Crude oil spikes on rumors Iran is making ready to attack Israel 

Iran is reportedly readying a strike on Israel and oil prices have jumped 3%. (Read) 

Not surprisingly, my favorite dinosaur juice producer is up sharply on the day as I type. 

I’ve repeatedly encouraged you to take advantage of the downturn in big energy over the past 12 months and ahead of what I’ve increasingly and very reluctantly viewed as an all but inevitable escalation in hostilities. 

Many oil companies have terrific dividends, low betas, and large reserves – all of which are likely to become considerably more valuable if supplies are constrained and volatility picks up. 

Choose carefully, though. 

Not all oil companies are the same. Pay special attention to how much leverage they carry because more debt means a less direct line from oil prices to profits.  

If you’d like some help sorting out what’s what, I’ll be here. 

Keith’s Investing Tip: War, terrorism, and ugliness are, unfortunately, a growth industry particularly as the Middle East continues to accelerate.  

Bottom Line 

People ask me about hot stocks frequently.  

That's the wrong question.  

Ask yourself which stocks will be there when you need 'em and work backwards.  

It's a very short list. 

Especially now. 

As always, let’s MAKE it a great day – you got this! 

Keith 😊