The Apple Way

One Week Till Go Time (Apple and AI)

We’re a week away from what one Wall Street analyst calls "the most anticipated Apple event in a decade."

For once, this sort of Apple-adjacent hyperbole might be justified. "Every other tech stalwart has unveiled its AI strategy and vision with one exception — Cupertino," Wedbush Securities analyst Daniel Ives tells Investor's Business Daily.

True enough. Apple increasingly looks like the also-ran of the Big Tech names. Earlier this year, it surrendered its crown as the world’s biggest company to Microsoft. It’s at risk of slipping to No. 3 behind Nvidia.

Adds the legendary tech analyst Gene Munster from Deepwater Asset Management, “If they had a clear strategy that people believed in, I think the stock would be 15% higher."

Apple has the chance to turn that around one week from today at its annual Worldwide Developers Conference.

For the next week, the business pages and the tech press will engage in endless speculation about whatever CEO Tim Cook plans to announce.

This much is all but certain: Apple will roll out new AI features with the release of iOS 18 — which will come installed with new iPhone 16 handsets later this fall.

Apart from that, expectations — both from the media and from Wall Street — are low. Why wouldn’t they be, given Apple’s recent history?

As Paradigm’s AI authority James Altucher is quick to point out, Apple isn’t losing its mojo — it’s biding its time to get things absolutely right. That’s the Apple way.

The iPhone, released in 2007, wasn’t the first smartphone. BlackBerry and the Palm Treo both put a phone, music player and internet device in a single package. Apple bided its time before making an earth-shaking announcement.

The iPod, released in 2001, wasn’t the first digital music player. The Diamond Rio and Sony Vaio came before. Apple bided its time before making an earth-shaking announcement.

And so Apple has been content to let OpenAI, Microsoft and Google steal all the headlines.

Next Monday, James says Apple will show all of them up. “And those that know the details ahead of their massive announcement,” he tells us, “could have the chance to target 10X their money in the next year.”

No, not by buying Apple shares — although James says AAPL has a good shot of adding 30% to its share price in the months ahead.

James is instead zeroed in on a little-known opportunity for you to potentially 10X your money over the next year, and even 100X your money over the next decade — thanks to Apple’s AI announcement.

You’ll want to be in position before Tim Cook takes the stage next Monday. That’s why James is hosting a live event this Thursday at 7:15 p.m. EDT.

“Imagine,” says James, “attending an exclusive event right before the launch of the iPod or the iPhone — an event that gave you all the details you needed to become an early investor in Apple, before it was a $3 trillion company.”

Attendance is free. All we ask is that you sign up in advance. And signup couldn’t be easier —one click on this link, and you’re in.

Just Another Ordinary Day

It’s just another ordinary day in the markets — where GameStop is up 30% and Warren Buffett’s Berkshire Hathaway is down 99%.

Let’s deal with the latter first: “A technical issue at the New York Stock Exchange on Monday caused the A-class shares of Warren Buffett’s Berkshire Hathaway to appear to be down nearly 100%” says CNBC. “Trading was halted in those shares, as well as in Barrick Gold and NuScale Power, which had also seen dramatic falls.”

Aside from saying the problem was resolved at midday, the NYSE isn’t offering much clarity on this “technical issue.” But that’s par for the course; the Nasdaq never fully explained what shut down trading for three hours one afternoon in 2013.

As for the ramp-up in GameStop shares, that’s because trader Keith Gill, aka “Roaring Kitty,” disclosed a position of 5 million shares worth $116 million — as well as 120,000 GME call options expiring later this month. It was three weeks ago that a cryptic tweet by Gill prompted a renewed frenzy in GME and other “meme stocks” that were all the rage in 2021.

The major averages are a mixed bag as the week begins — the Dow down a half percent, the Nasdaq up a quarter percent. The S&P 500 is down all of 10 points to 5,267.

For whatever it’s worth, figures from Bianco Research show that 43% of the S&P’s return year-to-date can be attributed to just one name — Nvidia. And another 12% is made up of only three more names — Amazon, Facebook parent Meta and Google parent Alphabet.

Everything we were told earlier this year about how the market’s “breadth” was improving and names beyond a “Fabulous Four” were starting to benefit? Never mind…

Elsewhere, crude is cratering after a clear-as-mud announcement from the OPEC+ nations.

The headline is that all production cuts will be extended into next year. But in the fine print is word that eight countries including Saudi Arabia will then gradually unwind some of those cuts through September 2025.

With that, a barrel of West Texas Intermediate is down nearly $3 to $74.30. The last time crude traded below $75 was in early February.

Precious metals are in the green as a new week begins — gold up nearly $15 to $2,341 and silver up 3 cents to $30.42. Bitcoin took a run toward $70,000 this morning but now it’s back to $69,235.

2024 Travel Boom

Whether it’s “doom spending” or some other phenomenon at work, air travel is setting records as we head into summer.

On the Friday before Memorial Day, nearly 3 million people were screened at TSA checkpoints — a record going back to when the TSA was inflicted upon the American people in 2001.

“According to TSA data,” says Paradigm’s Zach Scheidt, “five of the 10 busiest American airport travel days have occurred in the past two weeks. And nine of the top 10 days took place just in the past year!”

Chalk it up to twin travel phenomena: “Robust retail demand persists despite concerns about the economy,” says Zach. “Consumers are prioritizing experiences over material goods, fueling leisure travel.” At the same time, “we're also witnessing a resurgence in business travel as companies embrace more flexibility in work arrangements.”

As a result, “the lines between ‘weekday’ and ‘weekend’ are blurring as remote work becomes entrenched. This interesting shift in dynamics is a massive productivity boost for airlines. With demand more balanced across all days, carriers can optimize routes and fill more seats on more flights. It's a game-changer that should drive higher profitability.”

Among the big airlines, Zach is most keen at the moment on Delta Air Lines (DAL). “I don't typically like to hold these stocks for long-term investments,” he says. “That's because too many variables can hurt even the most well-run airline” — labor issues, weather and so on. “But during high-profit seasons, airlines can trade sharply higher, giving nimble investors some excellent profits.”

Along the same lines, Zach says you might want to look at hotel chains like Marriott International Inc. (MAR) and cruise operators such as Royal Caribbean Cruises Ltd. (RCL).

“The travel boom is here to stay,” says Zach, “leading to some big trading opportunities across the sector.”

Billionaires Warm up to… Trump?

Since when are so many billionaires lining up to back Donald Trump?

Hours after a jury in New York convicted him in the so-called hush money case on Thursday, Trump made his way to a fundraiser attended by — among others — Blackstone Group CEO Stephen Schwarzman.

That’s significant because Schwarzman broke from Trump for a while after the Capitol riot on Jan. 6, 2021 — and he blamed Trump for the GOP’s underperformance in the 2022 midterms.

Meanwhile, if the Financial Times is to be believed, hedge fund billionaire Bill Ackman plans to support Trump after backing Nikki Haley in the primaries. In years gone by, Ackman was a visible backer of Democratic senators in New York and nearby states like Chuck Schumer, Bob Menendez and Richard Blumenthal.

In addition, venture capital rock star Chamath Palihapitiya — who backed Democrat Michael Bloomberg in the 2020 presidential primaries — is co-hosting a Trump fundraiser in San Francisco this week. Minimum price of entry? $50,000. If you want “preferred seating” and a photo with Trump, that sets you back $300,000.

As we noted way back in January, JPMorgan Chase CEO Jamie Dimon — a donor mostly to Democrats over the years — isn’t exactly supporting Trump, but he seems open to another Trump term.

“Take a step back, be honest,” Dimon said at the World Economic Forum in Davos, Switzerland. “He was kind of right about NATO, kind of right on immigration. He grew the economy quite well. Trade tax reform worked. He was right about some of China.”

Because the media have the attention span of a gnat… it’s up to us to remind you that by and large, the billionaire class eschewed Trump when he first burst onto the scene.

Going into Election Day 2016, The Wall Street Journal reported that nine of the 10 biggest donors during that election cycle gave to Hillary Clinton. (Home Depot’s Bernie Marcus was the 10th.)

Among donations of $1 million or more, Clinton collected $180 million — compared with Trump’s $33 million.

To be sure, Joe Biden has no shortage of deep-pocketed donors this year… but the contest for billionaire campaign cash isn’t nearly as lopsided as it was eight years ago.

This shift matters when it comes to thinking about the prospect of a new American civil war.

I have yet to read Peter Turchin’s 2023 book End Times: Elites, Counter-Elites and the Path of Political Disintegration. But as I understand it, one of Turchin’s main theses based on his study of history is that you can’t have a civil war unless you have competing factions of elites.

Time was that most of the power elite was united against Trump. Evidently that is no longer the case, at least among some of its wealthiest members.

Meanwhile, for his part, Trump is eager to court big-money donors after looking down his nose at them in 2016. “I’m begging for your money,” he said during an event last month. He was only half-joking.

No, there aren’t any obvious investment angles to tease out from here. Not now, anyway. We’re just penning these thoughts on virtual paper because they might prove to be insightful a few weeks or months from now. Stay tuned…

Mailbag: Offending Both Sides, Book Recommendations, Mitigating Cow Burps

“You are offending both sides. Keep up the great work!” a reader writes after Friday’s mailbag.

“Personally, I think you are too moderate. I would do a much better job of offending people!”

Says another: “I enjoy your sense of humor when the audience swings you from a ‘MAGA conservative’ to a ‘flaming liberal’.... keep it up as it adds great comic relief given the blight now on our country.

“Don’t know if book recommendations are in order,” this individual adds, “but here it goes anyhow....

“I think to keep things in perspective our readers should read Broken Money by Lyn Alden and The Creature From Jekyll Island by G. Edward Griffin.

“Great reads and will keep things in perspective and obviously help the readers understand the corruption runs deep and the deck is stacked against the American people. Sad state of affairs given the recent news this month of May.”

Dave responds: I’ve not read the Lyn Alden book, although I’ve certainly heard enough podcast interviews with her that I’m intrigued. The Griffin volume I read many years ago — an underground classic!

“Thank you for your most enlightening coverage of the latest and greatest in reducing methane emissions from cows,” a reader writes. “True technological progress! (Yay?)

“But it is possible that you missed one thing in your coverage of this tech progress that you should have reviewed. 

“Did you not report earlier (maybe a couple years ago, but maybe more?) with a picture of a cow with plumbing from the cow's anus to a methane catch-bag attached to the cow's back? If you can find that picture again in your archives, you might want to review that as a testament to the tech progress you were reporting on. Love The 5!”

Dave: Well, it didn’t work exactly as you describe, but yes — it’s called Zelp and it turns up in our voluminous archives from April 2022…

Allegedly the device sits on the cow’s head — capturing methane as the animal exhales and sending the gas through a tiny catalytic converter and into the atmosphere as carbon dioxide and water vapor.

A cursory search reveals the company’s website is still up and running and it won funding last year from the Bill & Melinda Gates Foundation — because of course.

At least that concept seems comparatively harmless. But this new thing? Supplementing the feed for dairy cows to ensure fewer methane emissions at the source?

Yeah, I’d like to see some long-term studies on how that affects the resulting milk and cheese for human consumption…

Best regards,

 

 

 

 

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets