Straight to your inbox from Keith himself!

*Trusted by tens of thousands of savvy investors and traders around the world every day

☕ Powell goes for the fences but traders bench him anyway

Sep 19, 2024

Good morning! 👋

I’m working through the night tonight after a series of virtual meetings and a quick TV interview with DubaiOne and DubaiEye to break down yesterday’s Fed follies. (Watch)

So rather than delay the 5 with Fitz because I’ll be running on vapors a few hours from now, I figure I’ll take advantage of the ☕ and get this to you early! 😊

Here’s my playbook.

1 – Powell goes for the fences, but traders bench him anyway

Unka JPow came out of the gate stormin’ yesterday with 50bps rate cut.

At first, traders seemed to like it.

But - not coincidentally - only just long enough to suck in the FOMO crowd who clearly thought that stocks were going to moon... 25bps would have been good, but 50bps must be “great” went the thinking. 🤦‍♂️

Then along came a textbook perfect “rug pull” to separate many of ‘em from their money.

And poof, 375 points were gone in an instant.

2 - Now the real fun begins

Many investors are understandably confused by what's happening.

Wall Street likes it that way.

Why?

Two reasons.

Because it’s a) easier to separate you from your money when you’re making decisions by the seat of your pants and b) simpler to sell you a never-ending stream of products intended to diversify your holdings and earn them big fat commissions.

Here’s the thing.

It is absolutely possible to beat the big money at its own game, but you've got to be smart about it.

It's very telling that Apple held up.

Even more telling that futures are running higher tonight as I type.

To be fair, I have no idea where the markets will be a few hours from now but that’s beside the point. Inflation is coming down and the Fed just went big.

My annual target remains 5751.51, but I am now wondering if that’s high enough.

Hmmm.

3 - What should individual investors buy now?

Short answer, the stuff Wall Street sold hardest.

AI, too.

A new generation of millionaires is being created right at this very moment whilst the "smartest people in the room" are trapped on the sidelines yet again having predicted 10 of the last 2 recessions and market corrections.

You know what to do and where to find me if you don’t.

4 – Palantir: Cramer may live to eat his words

CNBC’s Jim Cramer doubled down yesterday calling Palantir a “cult stock” that has momentum because individual investors keep piling into it. It is not even really a stock.” (Watch)

Oh my.

Let’s review...

Customers cannot get enough of Palantir’s products

Growing revenue, margins, and profits

New contracts constantly

Oh, yeah... and the whole being included in the S&P 500 thingy

Shares have returned 137.31% over the past 12 months at a time when the S&P has logged 26.34%.

Cult stock, I think not.

$50+ a share, I definitely think so.

Keith’s Investing Tip: One of the coolest things about investing is the fact that we can all look at the same stock and have different opinions. Who is right or wrong really doesn’t matter in the scheme of things. It’s being profitable that matters, even when you’re wrong. Buffett missed Apple for a long time before coming around. Former Microsoft CEO Steve Ballmer famously poo-hoo'd the iPhone but subsequently recognized his mistake as one of the biggest he’d ever made. My guess is that Jim may well eat his words as will, sadly, many investors who take his comments at face value rather than doing a little homework themselves.

5 – Sorry Mr. Kuo, T-Mobile says otherwise

Apple analyst Ming-Chi Kuo roiled markets when he posted a note earlier this week saying that iPhone sales were running below expectations. (Read)

I encouraged you to take that with a grain of salt. (See #3)

Now T-Mobile CEO Mike Sievert says they’re running ahead of last year’s numbers. Unlike Kuo who is a widely read, well-regarded analyst, Sievert runs the joint.

Big difference.

Which is why, respectfully, I submit that Sievert probably has a better handle on actual iPhone sales.

Sales are not only ahead of last year, he continued during a CNBC interview, “but better than last year, and people are buying Pros, they’re buying Maxs, so they’re buying up the food chain, and they’re buying at a greater rate than last year.” (Read)

Apple, meanwhile, is planning to roll AI out shortly which is why there is no doubt in my mind that could – no scratch that – will turbocharge sales.

The AI party is just getting started, a sentiment I share with my friend and colleague, tech-ace Dan Ives of Wedbush. (Read)