Unfinished Business for 2025

Unfinished Business

It’s not too soon to start thinking ahead to 2026. But to think clearly, you have to first contend with unfinished business from 2025.

This year, “We’ve watched companies tied to big themes like AI, quantum computing and nuclear soar earlier in the year and then pull back,” says Paradigm trading pro Enrique Abeyta.

“That mix of big winners and sudden losers gives you the chance to clean things up and set yourself up for next year.”

Maybe you booked some large — and taxable — gains earlier in the year. And maybe you’re also sitting on some paper losses.

“This is the perfect time to realize some of those losses and help offset some of those big gains,” Enrique ventures.

Just make sure you don’t run afoul of the IRS’ rule governing “wash sales.” You have to wait at least 30 days after selling a stock before you buy it back.

Not only that, the IRS also watches out for whether you bought a “substantially identical” position.

“This prevents you from taking profits in a stock and simply replacing it with an option on the same stock,” Enrique explains. “The rules are quite clear that the loss would not be allowed.

“But what about when different stocks trade similarly?” Enrique goes on. “Take the quantum computing industry, for example.

“There are a number of stocks like IonQ Inc. (IONQ), D-Wave Quantum (QBTS), Rigetti Computing (RGTI) and Quantum Computing (QUBT). Even though they are very different companies, they are all in the same industry. So the stocks trade similarly.

“There’s nothing stopping you from taking a loss in a stock in this group that you bought recently and using the proceeds to buy back another stock in that industry.”

As always, consult a tax professional before making any moves. We’re just laying out the big picture.

Another move you can make: Take advantage of the recent sell-off to buy quality stocks at a relative bargain price.

Case in point: Facebook parent Meta Platforms. META “reported awesome results at the end of October,” Enrique says — “yet the stock is down almost 20% from when it reported.

“This is one of the best stocks of all time, and the company is crushing results. Why not take some of your losses and rotate the capital into a long-term winner that’s trading at a great price?

“There are other examples out there, but I think this is the best one.”

• Another plus for META: Yesterday a federal judge dismissed the Federal Trade Commission’s antitrust complaint against Meta — which accused the company of building an illegal monopoly in social media via its acquisitions of Instagram and WhatsApp. The feds might appeal, but it would be an uphill climb.

At the same time, “Beware selling an otherwise good company into the year-end tax-loss retreat just because there’s a year-end tax-loss retreat,” counsels our Byron King.

Byron is Paradigm’s mining-and-energy authority, and he’s thinking about many of the gold-mining shares that rallied spectacularly this year — only to pull back in recent weeks.

“Think ahead to early 2026, when good companies will find new buyers. Those currently ‘down’ shares — especially some of the solid mining plays that are off their 2025 highs — may have strong uplift in them come 2026.

“Along these last lines, you might consider deploying some cash in, say, early December to go bargain hunting among good names; or at least be prepared to pick up shares at a discount come early January.”

Byron expands on these thoughts — and submits a lengthy list of buys for your consideration — over at our sister e-letter The Daily Reckoning. Worth a look.

NVDA Watch

In the same way the U.S. stock market marks time ahead of a Federal Reserve announcement, the market is treading water today ahead of Nvidia earnings.

NVDA reports after the closing bell. In the meantime, the S&P 500 and the Nasdaq are staging oversold bounces — the S&P up about a quarter percent to 6,635 and the Nasdaq up a half-percent at 22,559.

You don’t have to look hard to find buzz that NVDA is overvalued. But Davis Wilson from our sister e-letter The Million Mission isn’t buying it.

“Nvidia trades at 50X trailing earnings — one of the lowest multiples this company has had in years. On next year’s earnings, NVDA trades at just 27X, putting it right in line with companies like Starbucks, Mastercard, Hershey and TJX.

“But here’s the kicker: Earnings estimates keep rising.

“Just 90 days ago, Wall Street expected Nvidia to earn $5.90. Today that estimate is up to $6.83. And these estimates tick higher every day. This is the exact setup I love: A stock drifting lower while earnings move sharply higher.

“That gap always closes… And it usually closes to the upside.”

Meanwhile, the hyperscalers — the Googles, Microsofts and Amazons of the world that buy NVDA chips — are accelerating plans to keep giving NVDA their business.

So what’s to make of the fact NVDA’s share price has fallen from $210 to $181? “Stocks sometimes fall simply because sentiment weakens,” says Davis — “not because fundamentals deteriorate… The stock price has moved lower. The business hasn’t.

“Earnings tonight may add volatility, but the long-term direction is unchanged.”

In the commodity complex the big story is crude — down nearly 2.4% after the Energy Department’s weekly inventory numbers.

A barrel of West Texas Intermediate trades for $59.31. To be sure, it’s traded lower in recent weeks but the trend is unmistakable — lower highs and lower lows. Not good for the near-term outlook.

Precious metals staged a strong rally this morning, only to give most of it back by midday. At last check, the bid on gold is $4,072 and silver trades at $50.68.

No joy in crypto: Bitcoin is back below $90,000 and Ethereum under $3,000.

Follow-Up: China’s Gold

Now it’s become a new cottage industry on Wall Street — guessing how much gold bullion China is stacking.

Just yesterday we told you how after 15-plus years, mainstream financial media are finally acknowledging that Beijing’s gold accumulation is much greater than the official figures released by the People’s Bank of China. Gold is how China can trade and transact with other BRICS countries — really, all of the Global South — without resorting to U.S. dollars.

Officially, China’s gold stash is just over 2,300 metric tons. Unofficially it’s probably over twice that total — making it the world’s second largest behind only the United States.

Now it appears Goldman Sachs is issuing monthly estimates of China’s gold accumulation. From Bloomberg…

China added an estimated 15 tons of gold to its forex reserves in September as central banks accelerated their purchases of bullion after a seasonal summer lull, according to Goldman Sachs Group.

The bank’s calculation compares with only 1.24 tons of gold purchases that China officially reported for the month.

For whatever it’s worth Goldman says the gold price will continue to rise during 2026 — just not at 2025’s furious pace. The analysts’ year-end 2026 target is $4,900.

The Golden Toilet: A Bargain!

Whoever bought the solid-gold toilet at auction last night got a steal.

The Italian artist and sculptor Maurizio Cattelan created the golden toilet in 2016 and called it America — his not-so-subtle commentary on what he considers excessive wealth in this country.

As we mentioned earlier in November, the luxe loo was scheduled to be auctioned this week by Sotheby’s after it had been held by a private collector since 2017. The collector’s identity was made public only last week — the hedge fund manager and New York Mets owner Steve Cohen.

(The toilet is fully functional as long as it’s hooked up to plumbing; did Cohen have it installed in one of his bathrooms?)

“The work, which weighs just over 100 kilograms and contains roughly 2,440 ounces of gold (worth $9.9 million as of Monday evening), came to auction with a starting bid pegged to the value of its metal alone,” according to a story at the ARTnews site.

Bidding started at $10 million even. Turns out there was only one bidder, his or her identity still unknown. The final price, including fees: $12.1 million.

Hmmm… That’s a mere 21% premium over the spot price of gold.

For perspective, you can buy a one-ounce U.S. Gold Eagle today and expect to pay the typical dealer a premium of just over 5%.

Seen in this context, 21% percent seems paltry. Looking forward a year or two, the buyer stands to make more money from the gold than from the “artistic value” of the work!

Mailbag: Gold IRAs, Quality of Labor

“Why don’t you address the pitfalls of purchasing gold?” a reader writes.

“In April I decided to roll over my IRA into gold coins and decided to use American Hartford Gold. I recently went to find out that the value of the gold I purchased was worth 20% less than the money I invested. Also the coins had not appreciated as gold bullion had over the six months.

“I wish now I had not rolled over my IRA which is worth $50,000 less than I started with.”

Dave responds: I’m sorry that happened to you. In mid-2023 we published an extensive warning about gold IRAs and the — ummm — questionable business practices of the firms that market them most aggressively. Caveat emptor.

I figured our email thread about “good help is hard to find” had pretty much wound down yesterday. Was I ever wrong!

“I live in Iowa — very rural. Iowa is basically one big farm with a few larger and many smaller cities.

“Work ethic is our culture, but because of the things your readers stated — especially the government handouts and socialist policies — many are working the system. Working part time and living on food stamps and whatever else is given out in housing assistance, etc.

“These beloved liberals who hate America are poisoning our country and our culture hoping that their lies will be believed by those living off their lies.”

“As a retired health care worker I have seen how the work ethic has eroded,” writes another.

“Plus, the state and federal departments of education have lowered standards of proficiency so low to make the so-called teachers look good. What was failing 10 years ago is now being proficient.

“Now AI is shown to take away middle-management jobs — what is there to strive for to better yourself? I'm glad I am as old as I am.

“The readers sharing their insight into labor issues made me think of a saying:

“‘Hard times create strong men. Strong men create good times. Good times create soft men. Soft men create hard times.’

“Is that how it goes?

“Things have sure changed. In about 1983 I started driving a logging truck for my dad full time. Interest rates were still very high. Jobs were hard to find. It was late in the season and I worked almost 100 hours my first week from Monday through Saturday. Sunday was unpaid fix-the-truck day. I felt I had earned myself a sleep-in. Wrong.

“The phone rang about 9 a.m.. It was my dad. He said my name to make sure it was me, and then screamed out an expletive-laden 15 seconds telling me If I didn't get to work immediately I was fired, and then hung up the phone so hard it seemed to ring the bell on my end… ha ha ha.

“(I wasn't laughing at the time, I was getting my boots on.) The good old days.”

“I am not-so-patiently waiting for someone to tell me WHERE the billions of dollars worth of ‘reshored’ factories are going to get QUALIFIED employees to work in them,” says our final correspondent.

“The last two generations of high school graduates, along with many college graduates, cannot write a sentence without spelling and grammar errors. Basic mathematics appears to be somewhat of a mystery to them, and a very high percentage are just fat and lazy. And note that 65% of those who adhere to one particular political party support socialism and thinly disguised Marxism.”

Dave: Thanks again to everyone for weighing in. Other mailbag topics — including Venezuela, and yesterday’s edition generated some interesting replies — will have to wait till tomorrow. Our cup runneth over!