☕ Palantir gets a downgrade from analyst who called it unsustainable at $9 🤦

Good morning! 👋 

It’s official!  

The S&P 500 is on track for what could be its best Q1 gain since 2019.  

YTD and ahead of the bell, the score is +10% vs 13.1% back then. The Nasdaq is +9.3% YTD while the Dow trails at +5.5% which, by comparison, seems positively pedestrian. 

Here is my playbook.  

1 - Yellen’s in firm command of the obvious (again) 

Janet Yellen says, “China could dump EV and solar production surplus in global markets.” (Read) And plans to discuss the issue when she visits. 

Only, it’s not a question of could. 

It’s “will.” 

China doesn’t do anything by chance. 

We – the West - play chess and the object of the game is to eliminate the competition. They – China - play a much older game, Go, the goal of which is to outmaneuver the opponent to the point where he or she has no options. 

China will tell Yellen something like 瞎子戴眼镜 (xiā zi dài yǎn jìng), which if my rusty Chinese slang is correct, means that the blind are wearing glasses. 

China will do what it wants. 

The US government will likely react by providing subsidies to US manufacturers but not consumers.  

Trade/Investing Idea: Short or avoid solar makers for a while as this plays out. Or, if you are going to play along, consider a choice like NEE that has a solid revenue base because of solar, not from solar. 

2 - SBF to the big house + what's next for BTC 

FTX criminal mastermind SBF - a.k.a. Sam Bankman-Fried - will learn today in a Manhattan federal court how much time he'll have to do in the big house. 

Prosecutors want 40 to 50 years while the judge says he faces 110 years (Read) but his lawyers are asking for 5 to 6 because they say customers are going to recoup most of their money as the company whines its way through bankruptcy proceedings.  

Here’s an idea. 

How about turning him loose in Times Square with an open invitation to meet up with every FTXer who lost money?  

My guess is the conversation wouldn’t go so well which is why the notion of leniency seems ridiculous. But that’s just me. 

On a related note. 

Investing Implication: The SEC has a serious problem on its hands. On the one hand it’s finally embracing Bitcoin but it’s still asleep at the wheel when it comes to how cases like this get handled.  

The Coinbase situation is yet another example. (Read) 

Meanwhile, BTC prices continue to rise ahead of the “halving” on April 4th. 

Be very, very careful and stay frosty if you’re on board because a growing number of institutional traders who are now on board means the “game’s on.”  

MyPOV: I expect prices to track higher as a function of growing ETF flows but, at the same time, for volatility to grow. Very few individual investors who have suddenly piled into BTC and other coins are prepared for that but, funny enough, the HODLers are well equipped (and that’s a good thing)! 

3 - Home Depot goes shopping 

Home Depot is making the biggest buy in that company’s history – an $18.25B bet on growing Pro sales. (Read) 

Right now, sales are split roughly 50/50... DIYers and Pros. 

What this tells me is that management is making a shift that the public hasn’t yet thought about. 

Pros tend to work on projects and repairs that “must” get done.  

DIYers tend to work on stuff that’s “nice” to get done. 

I’m going to have to take another look. 

4 – Palantir gets a downgrade 🤣 

This is rich. 

The same analyst who expected further downside at $7 and called Palantir’s valuation unsustainable at $9 is at it again. 

Now Brian White of Monness, Crespi, Hardt & Co. says Palantir is “egregiously expensive.”  

Tip o’the hat btw to my colleague and friend, Palantir Ace @arny_trezzi who also picked up on this via Twitter, er, X. (Read) 

$50. 

5 – If GOOG is gonna rollover, it’s gonna be now 

I’ve made no bones about problems at Google. 

This report could be icing on the cake or the straw that breaks the camel’s back depending on your perspective. 

A whistle blower has identified critical flaws in Google’s AI engines and algorithms producing what’s being reported as “terrifying” patterns. (Read) 

Knowing what I know about AI, I don’t doubt it. 

In fact, I’ll bet there’s a whole lot of skeletons still in the closet. 

Putskies, bearish spreads or just simply avoid the mess. 

This is a long way from over. 

Keith’s Investing Tip: Many investors focus intently on stocks to buy but what they fail to realize is that knowing which ones to avoid is equally critical. Chasing fads is a terrible idea but ignoring headwinds like the ones building against Google could be worse.  

How do you know which is which?  

For me it boils down to what the headwinds are. 

Tesla, for instance, is clearly under pressure on a variety of fronts but still leads the pack in tech, has diversified revenue streams etc.  

Google’s very business is being questioned and that’s a far more dangerous proposition to investors.  

I can still make the case, for instance, that I want to hold Tesla but that went out the door for Google a while ago. 

Bottom Line  

“If you can't explain what your stock does in words that a 5-year-old would understand, chances are good you don't know what you own....and just masking it with b------t. Do not buy b-------t stocks." --Keith Fitz-Gerald 

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

Keith 😊 

PS: A quick reminder and a personal invitation to join me in May 7-9 at the Hyatt Regency San Francisco for the upcoming Investment Master’s Symposium. I’ll be co-hosting the event and really hope you’ll join me. There’s an amazing list of speakers on deck and the knowledge they’re going to share could be a game changer given where the markets are today. I’ll also be speaking. 🤦 

Anyway, you can get special room rates and more by clicking here.  

PPS: Our offices will be closed tomorrow in observance of Good Friday so let’s plan on getting back in touch on Monday.