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☕ What to watch with Nvidia and Walmart earnings

Nov 18, 2024

Good morning! 👋

I hope you had a fabulous weekend wherever this finds you and that you’re as ready as I am to get after it this week!

Speaking of which, the markets are mixed in early going and scores of journalists would have you believe that the “post-election rally” has stalled or something similar. Clickbait artists, meanwhile, are busy forecasting the end of the financial universe as we know it.

Not true.

The markets are simply adjusting.

History shows very clearly that politics and policies come and go but profits are always the currency of success.

I cannot stress how important it is that you understand this as an investor. Or at least come to terms with it.

Don’t get me wrong… it’s not easy.

And what is?

Getting swept up by your emotions, the headlines, your neighbors, dinner table conversation, the Internet, Martians… okay, just checking if you’re with me. 😏

Seriously, one of the single most important lessons you can learn is to keep your emotions out of the equation. There is NO faster way to ruin your portfolio than to let your feelings and second-guessing the unguessable rule your world.

Focus on what you know to be true.

Case in point…

Some 93% of S&P 500 companies have now reported and ~75% of ‘em have reported positive EPS surprises whilst ~61% have reported a positive revenue surprises, according to a Friday note from FactSet’s John Butters. (Read)

What’s more, the Q3 YoY blended earnings rate for S&P 500 companies is 5.4% which, if it holds, will be the 5th consecutive quarter of YoY growth.

And finally, you constantly hear me harp on the importance of the “bigger picture” which, not surprisingly shows that companies generating more than 50% of their sales outside the US have a blended growth rate of 6.1% versus just 5.3% from those generating more than 50% of their sales within the US.

Buy the best, ignore the rest!

Here’s my playbook.

1 – What to watch with Nvidia and Walmart

This week we will see some big retailers reporting, including Walmart, Target and Ross but we will also hear from tech giant Nvidia.

Walmart and Nvidia both have the potential to be big catalysts. (Watch)

2 - Pentagon has no idea what it did with $824B

Okay sports fans.

The Pentagon has just failed its 7th internal audit and apparently has no explanation as to how it spent $824B … with a “B” ... yet Americans are being forced to report $600 payments on everything from Venmo to PayPal and Zelle starting next year. (Read)

What part of this is wrong, other than the whole part??!!

Here’s an idea.

How ‘bout we – the American people “we” – get a credit that burns off only as fast as they can account for spending our money. 🤷‍♂️

3 – Tesla pops to nearly $350

Tesla popped this morning as rumors circulate that president-elect Trump’s transition team will prioritize a federal framework for self-driving vehicle regulations that makes Robotaxi more likely and could streamline the approval process. (Read)

Yep.

Meanwhile, Lyft and Uber are taking a hit exactly I suggested a while back would be likely if/when FSD gains traction.

And the pairs trade idea I shared with investors late spring continues to perform as expected. Tesla has returned 95.60% since May 17th while Uber and Lyft have returned 4.03% and 3.17% as I type.

MyPOV: There are investors who wait for confirmation and there are investors who get ahead of the market’s next big moves, particularly when they can identify best in class companies and logical catalysts. The OBA Family, of course, has this covered just as I hope you do. Smiling ear to ear is encouraged, btw.

4 – Palantir’s bubble brigade hates to admit this but…

The “bubble brigade” is out in full force at the moment saying Palantir’s too expensive, over-valued, yada, yada, yada.

Are they right and should you listen?

If you’re a trader, maybe.
If you’re an investor, do so at your own risk.

‘Expensive’ and ‘overvalued’ are not the same thing.

Institutions keep buying, business is growing rapidly, customers are running to the company and demand, according to CEO Alex Karp is, “still only the beginning.”

I’ve seen this dozens of times over the years.

Critics have repeatedly levelled the exact same charges against Apple, Microsoft, Tesla, Nvidia… virtually any big runner you can think of… yet, you know how the story ends.

Keith’s Investing Tip: Accounting regs do not accurately reflect PE ratios nor a dozen other commonly used metrics when it comes to digital investing. In fact, PE ratios are all but dead-on-arrival for reasons I wrote about in quite some detail to the One Bar Ahead® Family recently. OBAers have told me that what I shared with ‘em has changed the way they look at the markets and, of course, their results. If you’ve got this covered, great. If not, I’ll be here if you need me.

5 – No saving ‘SAVE’

I mentioned on October 4th that Spirit Airlines was negotiating bankruptcy options with bondholders. (Read)

For naught.

The company, with the ironically fitting ticker ‘SAVE’, has now filed for Chapter 11 bankruptcy protection. (Read)

Operations will continue, and customers can still book flights as usual.

Not that this will amount to a hill of beans. Spirit hasn’t turned a profit since 2019 and reported over $335 million in losses in H1 2024.

I wasn’t lying when I said airlines are notoriously tough stocks to own and, at the risk of sounding like a broken record, I hope you don’t… own ’em that is.

As part of the bankruptcy process, Spirit will also be delisted from the NYSE.

I wonder who’s got the baggage tag for this boondoggle.