Chris Campbell makes Sean Ring feel much better about his stock pick of the year. June 04, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Urgent Apple Announcement On June 10, Apple is due for their biggest product launch of the past 40 years… where they'll announce their breakthrough product in artificial intelligence. A product that will affect the everyday consumer’s life more than any company to date… That’s why James Altucher is hosting a live event this Thursday, June 6 at 7:15 p.m. (ET)... He’s going to pull back the curtain on Apple’s AI reveal and give you all the details you need to target a 1,000% opportunity in the next year. [Click here to reserve your spot NOW for Thursday, June 6th at 7:15pm (ET)]( Clicking the link above automatically registers you for Apple’s 10X AI Announcement. By reserving your spot, you will receive event updates and offers. We will not share your email address with anyone. And you can opt-out at any time. [Privacy Policy.]( Campbell: Palantir Isn’t “Real AI?” SEAN
RING Dear Reader, Palantir, my stock of the year, has been having a rough time lately. My original thesis was that PLTR was a government darling and receives stacks of government money to spy on you. Since you can’t stop it, you might as well profit. After popping twice since that fateful October day in Vegas, PLTR, while still in the green, hasn’t rallied the way I had hoped. Then, my good friend and colleague Chris Campbell wrote this piece last week. Chris is a part of James Altucher’s team and is a tech expert. He wrote this below, unsolicited. It made me feel so good, I had to share it with you. Good reading! All the best, Sean Ring
Editor, Rude Awakening
X (formerly Twitter): [@seaniechaos]( [Send Me Your Mailing Address!]( What I’m holding in my hands is the “most dangerous book” in America right now. It paints a grim picture of our country’s future just a few years from now…in 2029. But I’m offering to send you a copy for free today as a way to help prepare you for what could happen next. [Click here now to see how to claim your copy.]( [Click Here To Learn More]( CHRIS
CAMPBELL One minute, you're a financial genius, the next, you're contemplating moving to a yurt in Mongolia. That’s what it’s like trading on mainstream financial media sound bites. (Don’t ask me how I know.) Ignore it. Good news and bad. Stanley Druckenmiller sold Nvidia to buy Palantir? Ignore! Druckenmiller’s track record for PLTR is terrible. He’s only lost money on the stock. On the other hand, Peter Thiel just sold a bunch of PLTR. Isn’t this bearish? IGNORE. Insider sales are most often planned long in advance for reasons unrelated to the company’s immediate performance. (The SEC makes sure of that -- cough cough Martha Stewart.) By the way, this principle applies to all PMG picks in our portfolio. If you focus on financial media sound bites, you’re going to be a confused nervous wreck. For example… RBC Capital Markets analyst Rishi Januria claims PLTR is “overhyped” because it is not “real AI.” He’s not alone in his analysis. But analysts like Januria miss the point completely. Let’s explore… and suss out why PLTR’s recent dip is more an opportunity than an omen of bad things to come for the stock. What Is Palantir? Palantir is a software powerhouse dedicated to solving the toughest challenges faced by government agencies and corporations. From aiding in the hunt for Osama Bin Laden to streamlining emergency response efforts during natural disasters, and revolutionizing supply chain management for major manufacturing companies, Palantir is scary good at what it does. That’s how they’ve been able to work with some of the world’s largest companies and governments to create breakthrough technologies. (Airbus created Skywise with Palantir years ago, which is now widely used in the airline industry.) Analysts like Rishi Januria look at Palantir and say, “They don’t have generative AI like ChatGPT, therefore it’s overhyped.” Januria is right: Palantir isn’t OpenAI. Instead, Palantir is positioning itself to be the infrastructure that supports these models. While OpenAI develops AI models like ChatGPT, Palantir specializes in providing the infrastructure and tools to help organizations build, deploy, and manage their own AI models. This strategy is about enabling other companies to build and optimize their AI models using Palantir's infrastructure. Palantir's CEO, Alex Karp, stressed that the true value in AI comes from integrating business logic and ethics with large language models (LLMs). The models themselves are just one piece of the puzzle. The real power lies in how these models interact with a company’s specific business needs and compliance requirements. Palantir's product, Artificial Intelligence Platform (AIP), acts as the orchestration layer, helping businesses make sense of and effectively use AI models to drive specific business outcomes. This infrastructure-first strategy is Palantir’s edge -- and they’ve been way ahead of the curve. Let me give you an example. This just happened this week. Palantir Strikes New Deal With Eaton If you’re not familiar… Eaton is a global power management company that offers energy-efficient solutions for electrical, hydraulic, and mechanical power systems. They operate in over 160 countries, catering to various industries such as electrical, aerospace, vehicle, and hydraulics. In the past, Palantir and Eaton used AI to help fix supply chain problems by finding and solving shortages proactively. Now, their partnership is expanding so Palantir can support Eaton's whole AI innovation process. This will help Eaton use AI across all its global operations. Moreover, Palantir recently secured $12 million from the Department of Energy as part of a previously established larger agreement. It’s one thing to land a contract with a large company. It’s another to have such deep-pocketed customers that keep coming back for more. Palantir Adopts SARs In other news, Palantir has introduced Stock Appreciation Rights (SARs) to align employee and shareholder interests. SARs reward employees with cash bonuses if the stock exceeds $50, without issuing new shares. This incentivizes employees to drive long-term growth, benefiting shareholders without dilution. While not impacting the stock price immediately, SARs boost confidence in Palantir's future prospects and align employee goals with increasing shareholder value. By the way… Stock-based compensation plans, especially those aligned with performance metrics, have a proven track record of success in driving company growth. Notable examples include Microsoft, Apple, Amazon, Tesla, and Salesforce. (Maybe you’ve heard of them.) In the 1990s, Microsoft's extensive stock option plans were crucial in attracting and retaining top talent. Similarly, Apple's use of restricted stock units (RSUs) motivated employees to focus on long-term growth and product innovation, playing a significant role in the success of products like the iPhone and iPad. The Future Looks Bright Palantir's clean balance sheet, with no debt and significant cash, further strengthens its financial position and ability to navigate a chaotic world. While there are risks to investing in Palantir, such as potential competition and political opposition, the company's strong performance and potential for future growth make it an attractive long-term investment. As artificial intelligence becomes increasingly important, Palantir's status as a leader in the industry positions it well for continued success. Keep calm, carry on. Sincerely, Chris Campbell Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… The Big Bounceback SEAN
RING May 2024 Monthly Asset Class Report In my mind's eye, Jerome Powell will cut rates at this June meeting. Cutting rates so far from the election makes it look like he's not doing it for political purposes. The economic data has been slow enough that he's got cover. Besides, all his fed Governors want to cut as well. I don't have data to back up this assertion; it's just a hunch from many years of being a political spectator. My friend and erstwhile colleague Jim Rickards is right that the Fed doesn't matter as much as it used to. However, Wall Street will use the Fed as the biggest excuse to buy stock. I still love gold and silver and feel they will rally hard over the coming months. Although I don’t include them in this monthly class report, I’m long multiple gold and silver miners. Both the SPX and the Nasdaq are powering along. That the Russell is doing well confirms the stock market trend for us. I’m still not a fan of bonds in an inflationary environment, but crypto did very well last month. And base metals also performed well. With that said, let’s get to the charts. S&P 500 From three months ago: Looking at this chart, there’s no reason in the world to be short. We may take a breather in the coming weeks, but I’d still participate in this rally. The long-term target remains 6,000. After a much-needed rest last month, the broad market came roaring back. Not only did we pop back above the 50-day moving average, but we retested it last week and it bounced up off it. I remain bullish. Nasdaq Composite Although we had a crappy month-end, the Nazzie is still soaring. We simply cannot call time on this rally yet. Russell 2000 (Small caps) The Russell wants nothing to do with its 50-day moving average. It seems to like staying above it. It’s silly to be bearish here. The US 10-Year Yield I may be terribly off on this, but I think Powell will cut in June. Here’s why: it’s far enough from Election Day to make a cut look apolitical. The economic data hasn’t been great lately. And his fellow FOMC members really want to cut. Most importantly, Powell doesn’t want to work for Donald Trump again. In any event, Trump will fire Powell at the first opportunity. How does this affect the 10-year yield? In theory, if the Fed cuts, the 10-year yield should follow it down. But it may not, if we have the rapid curve steepening because the bond market thinks the Fed has lost control. Dollar Index We broke back down after I thought we’d be heading back to 115. Now, I’m not sure. We may get a temporary strengthening when the ECB and BOE cut rates, but right now, it looks like the trend is sideways. USG Bonds We bounced back to 90, but as the Fed starts to unleash another round of cuts, we should be heading back down. Investment Grade Bonds We had a rally last month, but I think this is short-lived. There’s still too much inflation in the system. I can see a retest of 104. High Yield Bonds [Florida Man Wields Odd Device on Virginia Farm]( He traveled 1,000 miles away from home… To show you this strange device on a farm in rural Virginia. You won’t know by looking at it, but a secret company behind this strange device could hold the potential to make you rich over the coming years. [Click here to find out how.]( Junk keeps moving up slowly. No reason to short this here, yet. Real Estate Another good month, but I think real estate is going to tank soon. Energy: West Texas Intermediate (Oil) Oil is down another five bucks or so. It’s amazing that with this constant stream of inflation, oil is trading so poorly. Next stop: $70, unless the Fed starts cutting prematurely. Base Metals: Copper From last month: We blasted through my 4.30 call to 4.56. But this rally was too much, too fast, and I can see us heading back to 4.30 before taking off again at 12.15. Precious Metals: Gold ***NEW MONTHLY RECORD CLOSE OF $2,345.80.*** From last month: $2,609 is our new target, but it may take a few months to get there. The yellow metal’s price detail shows a nice consolidation between 2300 and 2450. Precious Metals: Silver From two months ago: Up $2 from last month. When silver awakens, watch out! Above $26, and it’ll start to chase, and then surpass, Gold’s performance. GIDDYUP! We powered past $32 temporarily, and then Mr. Slammy came in to hammer it. But we still closed above $30 for the first time in about a dozen years. Still think we’ll hit $50. Cryptos: Bitcoin We rebounded back to $68,000, but we could head sideways a long way before BTC starts its ascent again. Cryptos: Ether ETH rebounded bigly after it looked like the SEC was ready to approve ETFs for them, as well. Again, this chart, like Bitcoin’s, could move sideways to consolidate before beginning another ascent. Trad Asset Class Summary The dollar won in April, which meant everyone else was down. In May, we had the reverse. The USD was down about a percent, so everything else rallied. The broad market led the way, up a chunky 5%. Commodities followed with a 3.10% return and the long bond was up 1.26%. Crypto Class Summary The April showers genuinely brought May flowers, as everything crypto was celebrated. Ether led the way with a 26.6% return, followed by Dogecoin at 22.14%, Monero at 19.73%, Bitcoin at 15.79%, Litecoin at 3.85%, and Ripple at a nearly flat 0.04%. Wrap Up Buy stocks, commodities, and crypto. I imagine this trend will continue in the medium term, at least. We’re just getting started on the commodities rally, that’s for sure. But even though the stock rally is a bit long in the tooth, there’s no reason to sell them now. Finally, let’s take a moment, courtesy of the Twitterverse: Have a wonderful week! All the best, Sean Ring
Editor, Rude Awakening
Twitter: [@seaniechaos]( ☰ ⊗
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