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☕ Quantum computing’s “ChatGPT moment” is here

Dec 18, 2024

Good morning! 👋

All three indices are green as I type which strikes me as a good thing because that means there’s still plenty of appetite for upside but…

Here comes ‘da Fed.

The markets expect Fed Chair Jerome “JPow” Powell to lower rates but, as I noted earlier this week, I think there’s an outside chance he may stand pat or mention doing the same in 2025.

There’s already an endless parade of Fexperts (Fed + Experts) making the rounds on TV, not one of whom actually knows what Chairman Powell will say.

My advice is that you do two things.

First, turn off the volume. It’ll make a great substitute for Animal Planet.

And second, focus on what you can control rather than speculating over what you can’t. And btw there’s plenty… like buying great companies making world class products and services, with superb revenue and earnings and strong growth.

Investing in optimism beats cowering in pessimism or speculating on the unknown!

Here’s my playbook.

1 – Quantum computing’s “ChatGPT moment” is here

I suggested a while back that quantum computing was on the verge of its own “chatgpt” moment and it appears I was on to something. Especially lately. (Watch)

If you’re thinking you’ve missed the boat – and I get that you might be – don’t.

Quantum computing is still very, very early days.

I believe that there will be more profit potential created in the next 10 years than the last 50 combined. Quantum computing along with AI will play a huge role in making that happen.

Frankly, I am hard pressed to think of a more exciting, dynamic time to be an investor. 💯

Keith’s Investing Tip: Many folks ask me frequently about hot stocks when it comes to stuff like this but that’s the wrong question. What you want to do is flip that around and ask yourself which companies are likely to be there when you need ‘em. It’s a short list.

2 – Nissan + Honda = Sekigahara 2.0

Nissan and Honda are reportedly entering negotiations for a potential merger. (Read)

Western media sources are billing it as a “blockbuster deal” to ensure competitiveness.

Not.

This is about survival.

In fact, the situation reminds me a lot of one of the most pivotal events in Japanese history… when Toyotomi Hideyoshi asked Tokugawa Ieyasu for help in 1584 in return for allegiance following the death of Oda Nobunaga.

Not to get too far in the weeds but this is important for reasons that will become apparent in a moment.

Tokugawa broke his promise to Hideyoshi in 1598 by allying with other warlords in a move that culminated in the Battle of Sekigahara in 1600… and Tokugawa rule for the next 268 years.

Nissan is Hideyoshi and Honda is Tokugawa.

I think the merger may work for a few years and it will certainly play well in the Japanese press.

The problem is that many modern Japanese executives – particularly in companies like Honda and Nissan - do not understand innovation which is why most Japanese companies will never regain the prowess they once enjoyed. In fact, I think both companies are ultimately made weaker by the alliance if it happens.

I will be surprised if either still exists as a standalone a decade from now.

MyPOV: Car makers worldwide are a nasty investment with very little potential, save a handful. Be sure you understand what you’re getting into if you own ‘em – pun absolutely intended. 🤦‍

3 – Russia cancer vaccine

Russia has announced the development of its own mRNA cancer vaccine, slated for public release in early 2025 and to be offered free of charge. (Read)

If this is the real deal, it’s a massive game changer and not just for Russia either.

I am watching VERY closely.

Meanwhile, I continue to recommend a very select group of Western companies working in the same area, all of which have massive oncology development potential, solid cash flow and dividends.

Click here if that’s of interest and you’d like to learn more. If you’ve got this covered, excellent!

4 – GIS tees up another non-starter

Shares of General Mills are down 3% as I type following earnings. (Read)

Makes sense.

The company beat expectations but cut full year 2025 guidance.

Like Intel, I am glad I dumped it a while back.

MyPOV: Consumers are still stressed, going down market and have increasingly reached the limits of what they’re will to tolerate in terms of higher prices. Imagine that! 🤦‍♂️

Buy the best, ignore the rest.

5 - CrowdStrike to Delta… pfffft!

I am not surprised; in fact, I told you explicitly that it would only be a matter of time before CrowdStrike stood up to Delta if the latter pushed ahead with a lawsuit against the former related to its own incompetence this past summer’s cybersecurity kerfuffle.

Now, that’s happening.

CrowdStrike is pushing back against Delta Air Lines’ lawsuit over the July cybersecurity outage, calling it an attempt to sidestep their contract. (Read)

I still think Delta better mind its P’s and Q’s.

Scuttlebutt suggests that CrowdStrike has all the ammo it needs to bury Delta including what I understand is a particularly damning series of emails in which Delta execs refused help.

I also encouraged you to buy CrowdStrike and add to existing positions if possible during the worst of the dip and I hope to heck you did.

CrowdStrike shares have returned 67.23% since. The S&P 500, by comparison, has returned 16.78%.

At the risk of sounding like a broken record, chaos creates opportunity!

The sooner you come to terms with that, the sooner your portfolio will thank you.

Cybercrime, btw, may be a $24T problem by 2027 and you simply don’t see that kind of profit potential very often.