☕ Nvidia’s CEO Math - The more you buy, the more you save

Good morning! 👋 

Lower rates, game on! 

Sorta. 

Apparently, there’s a technical issue at the NYSE that’s resulting in some stock prices being displayed incorrectly including Unka Warren’s Berkshire Hathaway which – if you read the bad numbers – was down –99%. (Read) 

The conspiracist in me can’t help but wonder if there are some bad actors at work and the investmenticist in me (I know it’s not a word but work with me) can’t help but smell opportunity. 

Data protection is the next big wave as AI grows. 

I suspect the S&P will give up some ground by the time you read this but that the tech-laden Nazzy will remain higher. The Dow, whatever. 

Here’s my playbook. 

1 – Nvidia’s CEO Math 

“The more you buy, the more you save.” 

-- Nvidia CEO Jensen Huang speaking in Taiwan over the weekend 

Computers are no longer just instruments for data storage or processing but a “factory for generating intelligence in every industry.” (Read) 

Yep. 

My research suggests that every $1 spent on AI returns $5+ right now but that number may jump to $7-12 by next year. 

My Nvidia target is now $2,000 - $2,300 pre-split or shortly thereafter in which case we’re talking $200-$230. Plus. (Watch)

You know what to do. 

And, if you’d like some help, I’ll be here right alongside thousands of OBAers who are well on their way to becoming more confident, knowledgeable, and effective investors. (Learn More) 

You CAN beat Wall Street at its own game! 

And, honestly, I believe that’s more doable than ever before considering there may be 10-15 Nvidias out there right now! 

2 – Game Stop: If this isn’t manipulation 🤦‍♂️ 

GameStop shares took off like a rocket this morning after the “Roaring Kitty” apparently posted what reports suggest could be a $115-$120M position. (Read) 

Two takeaways: 

1. If the SEC doesn’t take action, then why not? 

1. Unsuspecting retail investors are going to lose another few billion dollars 

The company remains largely bricks and mortar in a digital world. 

Trade Idea: Potentially selling cash secured puts at $5 if you want to buy it – and that’s a big “if” in my mind because I don’t - or a bearish put spread $10-5 with the understanding that you’ll need to fight volatility the entire time you own it. They’re only pennies but...  

Pass. 

Keith’s Investing Tip: One of the hardest lessons of all to learn when it comes to investing and trading is when to recognize a trade that’s “perfect” ... for somebody else. And, to have the mental discipline needed to stay out of the fray. 

3 – Time to have another Pepsi? 

I’ve recommended Pepsi over the years and am wondering if it’s time to have another taste.  

Why? 

The company seems to be shrugging off obesity fears and consumer resistance to higher prices. 

Shares are down –5.77% over the past 12 months but have returned –2.99% thanks to the company's strong dividend which right now is 3% or so. 

Hmmm. 

4 – CrowdStrike reports 

I think we’re going to see some strong numbers. 

Will they be strong enough? 

I’m expecting 30-35% top line growth which would be something in the neighborhood of $900 - $950M. Earnings, probably $0.90 per share. 

Guidance will, of course, be key. 

I don’t see management jumping on the dividend bandwagon, but a more aggressive buyback program could be in the cards.  

The stock has been hit with a wave of selling recently, suggesting that traders may be expecting a strong topside move. That would be consistent with dumping shares now to scare out the weak money and buy shares less expensively ahead of the announcement.  

Why I am NOT going to “trade” CRWD: Buying a straddle – meaning simultaneously purchasing call options and put options – can be an effective way trade earnings announcements; in fact, I’ve recommended several that have 5 Fitzers have told me worked well this earnings season. 

However, the trader in me is sitting this one out. 

The trade is getting crowded. It’s also more expensive than it would be otherwise as volatility has come up. And finally, open interest is relatively disbursed on the put side – meaning it’s hard to see who’s betting on what. I don’t like that set up because it’s too risky. 

The investor in me plans to use any weakness as an opportunity to go shopping. 

5 – Suze’s right – don't wait!  

One of the things I respect most about personal finance expert Suze Orman is her ability to cut to the chase and to explain things in plain English.  

Take this week’s podcast for example. 

“Don’t wait,” she said when asked about investing. 

I agree. 

The markets are a source of constant opportunity which is why you want to do everything in your power to harness that. 

Now, to be fair, Suze was responding to a question about when the special investing product I’ve been working on for everyone will be ready and the answer is “almost.” 

That's entirely on me. 

Today’s markets are some of the most complicated in history which is why I want to be absolutely certain the math works before I roll something out for one simple reason... you place a lot of trust in me to get this stuff right. And that’s exactly what I am going to do doggonit! 

Meanwhile and to Suze’s point, get started.  

Get invested.  

Get going. 

My two cents is equally simple. 

You’ve got to be in to win or you won’t... win. 

Btw, Noriko and I listen to Suze’s podcast regularly and encourage you to do so as well! 😊 

Bottom Line 

Many aspiring investors & traders want to do "something" because they can while failing to realize that "nothing" is a viable choice.  

Wait for YOUR setup, change your tactics.  

Learn to trade around core investing positions. 

There is NO rush. 

As always, MAKE it a fabulous day. 

You got this – I promise! 

Keith 😊