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Mar 25, 2025

Howdy! 👋

The markets strike me lately as a lot like that old joke about what happens when you play country music backwards… the dog comes home, the tractor works, the pickup runs, crops harvest themselves and your last next ex returns. 🤦‍

All joshing aside, I am happy to see back-to-back gains simply because it’s been a while since there’s been any green on the screen.

That said, today’s action feels weaker to me, so I won’t be surprised if the computers introduce some selling later this morning but that’s neither here nor there. Probably, by the time you read this, in fact.

The bigger thought – and the one to keep front of mind – is that a) the big money knows that there’s a lot of upside ahead and b) they’re going to be keen to get in front of that.

When?

Who knows.

What we do know though is that uncertainty always gives way to clarity!

Here’s my playbook.

1 – Is peace close in Ukraine?

I am hearing reports from a variety of sources this morning that both the Kremlin and Kyiv are being unusually tight lipped about the latest ceasefire deal talks with the US. CNBC is also reporting the same. (Read)

Wouldn’t that be great!!!

I think it could be a quick 2-5% higher based on nothing more than relief.

Defense stocks will probably take a knee-jerk hit lower but, I’ll take it… and continue to reinvest the dividends. Then go shopping for more of ‘em.

Defense spending is sharply higher worldwide and accelerating.

Trade Idea: I can see a 1-2 punch working nicely… putskies on a few key defense stocks (which are dirt cheap at the moment comparatively speaking because volatility is all on the call side), then DITM call options to play the upside that returns. Or, just buying the stocks themselves in which case you get the added kicker of a dividend.

MyPOV: Wall Street is very quantitatively driven and any relaxation in defense stock prices is almost certainly going to be driven by the computers with little or no regard for fundamentals. That’s almost always an opening for investors with a little patience and willingness to see beyond the noise.

2 – India mulling $23B in US import tariffs to protect $66B in exports

And so, it begins. (Read)

I made the comment last Wednesday on CNBC Power Lunch that it won’t be long before we see which administrations want what. (Watch)

My guess is that it won’t be long before we start seeing similar deals from other nations either.

Chances are it’ll start as a smattering of tit for tat but eventually both parties will come to the table publicly, although to be honest, I’ve got to imagine there are a boatload of back-channel comms taking place already.

Tariffs are definitely ugly and certainly not a favorite, but history shows beyond any shadow of a doubt that they can be important negotiating tools at pivotal moments.

To be clear, I am NOT saying they’re right or this is one of ‘em so please don’t go all keyboard warrior on me. Just be aware of the broader context.

Take the 1980s tariffs on Japanese electronics, for example. They weren’t popular, but they forced Japan to the table and led to a rebalancing of trade and tech competition that shaped the next two decades.

The Meiji government in late-1800s Japan used selective tariff reforms to renegotiate unequal treaties with Western powers—an essential step in reclaiming economic sovereignty.

Jean-Baptiste Colbert used protectionist tariffs in 17th-century France to jumpstart French industry and reduce reliance on imports—laying the groundwork for France’s emergence as a European powerhouse.

Keith’s Investing Tip: The world’s best companies have always and will always find a path forward despite tariffs – that’s the thought you want to focus on. Lesser choices are a dime a dozen and not worth the investing risk imho.

3 – Alibaba: We’re not late, you’re early

Alibaba chairman Joe Tsai is warning that the AI data center buildout is looking frothy. He says projects are going up without a customer in sight and hints this could be a bubble. (Read)

“I start to get worried when people are building data centers on speculation,” Tsai said.

Fair.

But here’s the thing… this kind of warning often shows up when a company’s been slow to move and needs to posture for shareholders.

I call it “optics over operations.”

Companies that miss the train love to act like they chose not to board it. It’s a classic CYA move I’ve seen dozens of times during the course of my career: cast doubt, slow capital outflow, and buy time.

Stick with data center beneficiaries like those we talk about regularly. My faves continue to power up and – I submit – are still radically undervalued.

Hopefully, you’ve got this covered in your investing, too. If not or you’d like a little help sorting out the wheat from the chaff, I’ll be here.

4 – “Me too,” even in Big Oil

Shell just joined the crowd—boosting shareholder returns while cutting spending. (Read)

The energy giant raised buybacks to $3.5B and trimmed capex for the year which means more cash for investors, less risk on the table.

Who knew, “me too” isn’t just for tech.

Even Big Oil wants in on the capital discipline trend.

It’s an important consideration that many investors miss time and again… when companies stop chasing growth and start paying you instead, that’s your cue—the game’s changed.

Should you buy Shell?

Before you do, consider this.

My “other” choice in this space has paid 38 years of consecutive annual dividend increases that have averaged 4.47% a year for the past decade. Shell’s dished out 5 years but reflects an annualized growth rate of -2.97% over the past decade.

Nothing against Shell whatsoever, it’s a great stock and a lot of people are quite happy owning it. I just think there are better choices out there.

5 – Napster: From Piracy to the Metaverse

Remember when Napster nearly nuked the music biz?

Now it wants to save it.

Infinite Reality just bought Napster for $207M with plans to turn it into a 3D, AI-powered, blockchain-backed concertverse. (Read)

Because clearly, what fans really want is to watch digital merch drop in the metaverse while chatting with a chatbot pretending to be Post Malone or Taylor Swift. 🙄

Still… $3B raised and a $12.25B valuation says someone’s buying the pitch.

MyPOV: Napster was early once. Maybe this time it’s right on cue. Meanwhile, I’ll be rockin my vintage BOSE, vacuum tubes, and even a few favorite LPs, scratches and all.

You?