I’m back home after a hectic few days in New York City. If you only watched the news, you’d think NYC is a dirty, dangerous dump. Truth: NYC is buzzing. Restaurants are packed and people are spending like there’s no tomorrow. I waited 25 minutes to get into the KazuNori sushi restaurant (on a Monday night). Highly recommend. Only cost $50, and I left stuffed.
Let’s get after it…
The stock market is getting stronger, not weaker
I joined my friend J.C. Parets of All Star Charts’ Portfolio Accelerator event on my trip. It was a room full of technical analysts, who study charts to see how markets are actually behaving to make trading decision.
My No.1 takeaway from cycling through hundreds of charts: The market is getting stronger, not weaker. Big tech stocks carried the market higher last year. Now, you’re seeing the bull market broadening out. Read more: January got stocks off on the right foot.
TV gangster Tony Soprano used to say, “I’m in the waste management business.” We’d all be made men like Tony if we had bought Waste Management WM stock. It’s making new highs. Biotech stocks like Regeneron REGN , defense contractors like General Dynamics GD and insurers like Allstate ALL are also hitting record highs.
Notice how none of these are tech stocks?
Something I’ve learned over the years is to listen to the market. Are stocks rising or falling, which type of stocks are going up and how many stocks are participating? This is all crucial information that can give you a hint about what stocks will do next. Right now, the market is telling us it wants to move higher.
How to burn $3 million in one month
I had breakfast with a well-known Wall Street veteran who asked not to be named. He told me about a friend who sold his swanky house for $10 million around Christmas and invested it all into one stock: Tesla TSLA . Tesla has fallen 30% since then. Tesla got absolutely hammered after warning investors on its recent earnings call that sales growth would slow this year.
My friend covered the auto sector for a big Wall Street firm for over a decade, so he knows the industry inside and out. He walked me through why it’s one of the worst businesses on the planet. I agree, which is why I’ve steered clear of investing in EVs. You need great businesses to complement fast-growing trends.
It’s shaping up to be a rough year for EV-related stocks. Car-rental firm Hertz HTZ recently said it was selling 20,000 Teslas and switching back to gas-guzzlers. The bigger problem is how quickly EVs lose value. A second-hand Tesla Model X fetched $76,000 in December 2022. Today, you can buy the same model for $49,000. That would make me think twice about buying one.
Put EVs in the “too hard” pile for now. There are easier ways to make money. And please, never sell your house and put all that money into one stock.
The stock market crowns a new king
Microsoft MSFT (blue line) recently overtook Apple AAPL (purple line) as the world’s most valuable company.
Last October, I predicted artificial intelligence (AI) would help Microsoft reclaim this crown from Apple. Microsoft owns 49% of ChatGPT creator OpenAI. And it’s integrating OpenAI’s cutting-edge tech into its products. In fact, Microsoft announced it’s putting an “AI button” into its new keyboards, which will take users straight to its ChatGPT-like assistant, Microsoft Copilot.
Nvidia NVDA and Microsoft made new highs recently, while AI laggards like Apple and Amazon AMZN fell behind. Talk about the market giving us signals. It’s telling us 2024 is the year AI takes over.
Microsoft is the only big tech stock I’d own. But it’s not the best way to profit from AI. Microsoft alone plans to spend $50 billion expanding its AI data centers next year. Another way to profit from this trend is investing in companies powering the AI infrastructure build-out and printing money right now.
Today’s dose of optimism
Here’s a truly mesmerizing video: A T-cell—a type of white blood cell that fights disease—killing a cancerous cell. We’ve discovered many life-saving breakthroughs over the past 250 years: vaccines, antibiotics and anesthetics, to name a few. But cancer still kills over 600,000 Americans each year.
I’m looking forward to the day when being diagnosed with cancer is no worse than finding out you have the flu: a minor illness that can easily be cured. It will take time. But I’m optimistic that breakthroughs like CAR T-cell therapy and cancer-killing pills can get us there.
Future’s bright…
Read Next
