☕ Microsoft to $500: you can make money or excuses, just not both

Good morning! 👋 

I got up at 0215 last night to jot down a few quick notes related to an upcoming (and super exiting) project I’m working on with the venerable Suze Orman, host of the Women & Money Podcast which btw, Noriko and I think is awesome. 

As I often do, I took a quick peek at futures. 

Everything was firmly in the green which made sense given that the US10YR rate had fallen to 4.234% and traders levered up – meaning borrowed money to buy overnight ahead of the opening bell. 

All the usual suspects are still on the move this morning as I type. 

Here’s my playbook. 

1 - Tech Ace Dan Ives sets a $500 target for Microsoft 

My friend and colleague, Tech Ace Dan Ives has joined me at $500 a share on Microsoft. (Watch) 

Excellent! 

Dan is a super sharp thinker and I respect his opinion tremendously. The fact that he’s on board is powerful confirmation that we’re on the right path. I’ve got to josh him, of course, for being “late to the party” but there’s plenty of time for that later! 

Meanwhile, I thought you might enjoy a quick stroll down memory lane: 

• My take from last November with the fabulous Stuart Varney on why Microsoft wins the AI wars and $500 is appropriate. (Watch) 
• And an even earlier perspective from nine months ago with the terrific team from CNBC International when I noted $500 a share but hadn’t quite worked out the timing just yet. (Watch) 

Keith’s Investing Tip: I hear from people constantly who tell me that stocks like MSFT are “expensive” or somehow ahead of themselves. Yet here we are and the prices they were so concerned about back then now look cheap. You can make money or excuses, just not both. 

2 - New life for Zillow? 

You’ve heard the line if you’ve ever bought or sold a house… commissions are negotiable. 

Like heck. 

The National Association of Realtors has just agreed to a $419 million settlement and dropping the requirement that sellers pay for the buyer’s agent commissions. (Read) 

Now buyers can be their own agents. 

I think Zillow, which is heavily dependent on realtors making fat commissions, could have 30-40% downside from here. Zillow shares my concern and has warned about a potentially material impact. (Read) 

I could see a LowBall order at $35 working nicely because Zillow is going to have to reinvent itself to cope. 

Or not. 

Meanwhile, I don’t risk a dime. 

MyPOV: It doesn’t matter if you’re a buyer or a seller. Professional real estate agents will ALWAYS be worth the expense imho. This ruling will weed out the marginal players who seem to think they deserve a free lunch just for walking into an open house or perusing listings. 

3 - Tesla to require FSD demo before delivery 

CNBC reports that Tesla CEO Elon Musk has sent an email requiring every customer receive an FSD – full self-driving - demo before delivery. (Read) 

So? 

That tells me the potential litigation I wrote to you about recently may have teeth. (See #5) 

Breakthrough technology is not without its challenges.  

The key will be making enough progress that stupid people using things like the FSD in ways that rational people wouldn’t don’t become the tail that wags the dog. But, then again, the legal system has deteriorated to a game of technicalities, so the notion of personal responsibility seems to be a long-lost concept. 

Two trades come to mind: 

1. Selling Cash Secured Puts at lower prices as a way to get paid to shop for TSLA shares at a bargain; and, 
2. Buying a few Putskies - meaning buying a few ATM short term puts to capitalize on a more immediate downside move if it happens. 

Either way, weakness is a buying opportunity for longer term investors. 

Keith’s Investing Tip: Learning to trade around core positions is a critical skill most investors would be wise to learn. Especially these days.  

4 – What to buy if it’s finally India’s time 

I’ve been actively involved in global markets for 43+ years now and India has always been on the cusp of things but somehow never quite arrives. 

That could finally change. (Read) 

JPMorgan is adding India’s government bonds to the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) in June. Bloomberg will be adding Indian government bonds to the company’s Emerging Market Local Currency Government Index from Jan. 31, 2025. 

Why this matters. 

Large investors are frequently indexers and allocators, meaning they’re huge buyers of everything in specific indices.  

Goldman Sachs sees the move as pivotal and capable of attracting $40B from the time of announcement to the end of the scale in period and averaging around $2B a month as banks, mutual funds, and insurance companies take up positions. 

I think it could top $50B. 

Remember... $AAPL and other companies are moving away from China and, in doing so, already “inside” the walls so to speak. 

India wants a $5T economy by 2030 and this could help ‘em get there. 

One way to play that could be a choice like the iShares MSCI India ETF (INDA) which has returned just 3.82% YTD and is all but forgotten. 

MyPOV: I prefer individual stocks because I look at the world through the OBA Framework, but that’s just me... and savvy investors in 40 countries. If you’d like to join ‘em, please consider this an open invitation. I’d be honored. 

5 – AI: Beware of this line of thinking making the rounds 

There’s a line of thinking being promoted right now that goes something like this... AI will be challenging because of data center capacity and energy demands. 

GMAB. 

Don’t be caught on the wrong side of history! 

Permabears, curmudgeons, pontificators, whatever you want to call ‘em are smart. 

Many, in fact, make tremendously sophisticated arguments that sound alluring because the investors who listen to ‘em subconsciously interpret what they’re saying as a protective reflex. 

Unfortunately, as bright and well-known as many of these individuals are, what they’re doing is a lot like predicting 10 out of the last 2 recessions, and about as useful as worrying there will be 18 feet of snow in July based on 3 inches in November. 

Eventually, though, they’ll get it right and claim vindication. 

I’d rather see you claim profits. 

Bottom Line 

Work as hard as you can now.  

Invest.  

One day your money will repay the favour. 

You got this – I promise! 

Now and as always, let’s MAKE it a great day. 

Keith 😊