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“Generals always prepare to fight the last war, especially if they won it.”

French Prime Minister Georges Clemenceau supposedly said that during World War I.

The same applies to investing. Investors will often look at what worked before and assume it’ll keep working.

We’ve seen this happen with the dot-com bubble in the late 1990s. Investors threw money at any company with “.com” in its name, only for many of them to crash and burn. Then, in the 2000s, investors bet big on brick-and-mortar retail giants like Sears and JCPenney, missing the rise of e-commerce and Amazon.com Inc. (AMZN).

During the beginning of the AI Revolution, arguably the biggest technological shift of our time, some investors stuck with legacy tech stocks like Intel Corp. (INTC).

This was once an iconic American company. But take one look at Intel’s chart below. The chipmaker’s stock is down about 63% over the past five years.

What makes this drop even more shocking is the fact that all of Intel’s missteps happened as the AI Revolution picked up steam.

So, competitors like NVIDIA Corp. (NVDA) came along and revolutionized the semiconductor industry and become the clear-cut leader of the AI race.

Intel was fighting the last war.

Meanwhile NVIDIAsurged ahead, dominating the AI Revolution, thanks to its graphic processing units (GPUs), which proved to be far superior to CPUs (central processing units) for AI work. That’s when everything changed. All of a sudden, everyone doing AI was clamoring for NVIDIA’s chips, and the AI arms race was on.

As a result, few companies have profited from this profound shift more than NVIDIA. In my 40-plus years in this business, I’ve never seen a company as monopolistic as NVIDIA.

It’s why I went on record saying that NVIDIA is the “Stock of the Decade.” Its pace of innovation is unmatched.

But you have to wonder: How much longer can NVIDIA keep this up?

By the end of this decade, I predict the transistors in each of NVIDIA’s chips will be approaching the “atomic” level. That’s when the laws of physics will get in the way of making its chips any faster.

So, is NVIDIA fighting the “last war”?

I don’t think so.

I think NVIDIA plans to utilize quantum computing to dominate the next phase of the AI Revolution.

Now, you are going to start hearing more about quantum computing very soon. And that’s because, on March 20, NVIDIA will hold the first ever “Quantum Day” at their annual AI conference…

Or what I’m calling “Q Day.”

According to the company, it will bring together experts to consider what we should expect from quantum computing in the coming decades.

I believe this will be when NVIDIA makes its biggest announcement of the year…

And that announcement won’t just be great for NVIDIA. It’ll also be great for select “pure play” quantum computing companies that are partnering with NVIDIA.

Remember:The biggest gains will likely come from smaller “pure play” quantum computing companies.

These are the ones that could become the next NVIDIA.

So, make sure you block off your calendar for Thursday, March 13, at 1 p.m. Eastern. That’s when I’ll share all the detailsyou need to know about Q Day in a special summit – including my top pick, a small-cap stock protected by 102 patents with close ties to NVIDIA.

You can reserve your spot by clicking here.

After you’ve saved your spot, be sure to send me your biggest questions about quantum computing. I’ve already received a number of great questions, so keep them coming! You can reach us at [email protected] and use the subject line “Quantum computing questions” so that I can be sure to see each one of them.

In the meantime, to understand what’s coming, I’ll explain the ins and outs of quantum computing, including how NVIDIA is getting in on the action. It’s important to understand what quantum computing is and how it works.

Plus, I’ll share two ideas for how you can profit.

Let’s dive in…

The creative destruction of technology … tech’s role in snowballing wealth concentration … Louis Navellier’s starting gun for AI profits … a key event to watch two weeks from today

In December 2019, Democratic presidential candidate Joe Biden was rallying a crowd in Derry, New Hampshire, a big coal mining town.

Derry was struggling economically as the long-shrinking coal industry continued to shed jobs.

Against this backdrop, Biden provided some eyebrow-raising career advice…and let’s just say it didn’t go over well.

According to Dave Weigel of the Washington Post, Biden told the crowd:

Anybody who can go down 3,000 feet in a mine can sure as hell learn to program as well…

Anybody who can throw coal into a furnace can learn how to program, for God’s sake!

According to Weigel, the response was stunned silence.

Now, most people believe that environmental concerns have been behind the shift away from coal. And while that’s partially true, there’s been a key economic driver as well.

Technological advancements have enabled shale gas extraction to become cheaper than mining coal.

It’s just one of many examples of technology reshaping the economy, and the American workforce.

Now, let’s take it one step farther…

Let’s say one of these miners followed Biden’s advice and became a coder.

Unfortunately, that person could soon be out of a job yet again as technology continues reshaping the American economy and workforce.

From Forbes in January:

In a recent interview with Joe Rogan, Meta CEO Mark Zuckerberg said that AI will replace mid-level engineers by 2025.

He believes AI can take over coding tasks, allowing human engineers to focus on higher-level problem-solving and creativity.

The author of the article adds his take – AI will not replace all mid-level software developers, but many will disappear. He concludes:

As AI continues to mature – over the next few years – many of the software applications written will be done on command and without the need of these humans.

The trend is only broadening and gaining steam.

Now, there are silver linings. In fact, investing legend Louis Navellier is positioning his subscribers to profit from this shift thanks to a catalyst happening exactly two weeks from today.

But before we get to those details…

Older Digest readers will remember a prophetic ad from IBM in the early 1980s…

In it, two men watched a mechanical shovel digging a hole.

“If it wasn’t for that machine, 12 men with shovels could be doing that job,” gripes one of the men.

The other replies, “If it wasn’t for your 12 shovels, 200 men with teaspoons could be doing that job.”

At its core, technology accomplishes more with less. Of course, from a wealth-building perspective, this means that “the less” will accumulate “far more.”

For decades now, we’ve been seeing this wealth shift occurring on a country, company, and personal level.

At the country level, here’s the International Monetary Fund:

Inequality…has risen over the past two decades in most regions…

What is contributing to the widening of the income gap within countries? …

The main factor driving the recent increase in inequality across countries has been technological progress.

At the company level, here’s the Chicago Booth Review:

Since the 1930s, the share of the US economy dominated by the top 1 percent of companies (when sorted by assets) has increased to 90 percent, up from 70 percent.

Meanwhile, the asset share of the top 0.1 percent of companies has risen to 88 percent, up from 47 percent…

The study finds that technology-driven economies of scale better track the broad trend of rising concentration.

And on the personal level, here’s the Massachusetts Institute of Technology:

A newly published study co-authored by [MIT economist Daron Acemoglu] quantifies the extent to which automation has contributed to income inequality in the U.S., simply by replacing workers with technology — whether self-checkout machines, call-center systems, assembly-line technology, or other devices.

Over the last four decades, the income gap between more- and less-educated workers has grown significantly; the study finds that automation accounts for more than half of that increase.

“This single one variable … explains 50 to 70 percent of the changes or variation between group inequality from 1980 to about 2016,” Acemoglu says.

Those are just three examples of technology reshaping the American/global workforce and widening the wealth gap.

Well, get ready for this trend to explode now that AI is here – especially given one particular aspect of AI…

The coming winners and losers of this AI wealth redistribution

Louis has been tracking the tech-based wealth shift in recent years:

Throughout recent history there’s been two kinds of people: The folks who leverage cutting edge technology to get rich… and the folks who bury their heads in the sand and ignore new tech until it has already hit mass adoption.

Kodak, Blockbuster, and JCPenney are three of the most well-known examples of companies (and investors) that stuck their proverbial heads in the sand and suffered the financial fallout.

Kodak failed to adapt to digital photography (despite inventing it). Netflix’s superior streaming service destroyed Blockbuster. And JCPenney couldn’t keep pace with the consumer shift to online shopping, ultimately dominated by Amazon.

As we look ahead today, there’s one aspect of the AI revolution that Louis believes will accelerate this “prosper” or “suffer” wealth binary…

Quantum computing.

To make sure we’re all on the same page, quantum computing is a gargantuan technological step forward where we leverage the principles of quantum mechanics to process information exponentially faster than classical computers. Quantum computers will be millions of times faster than the most advanced, cutting-edge supercomputers that our top scientists use today.

Here’s Louis with what this means:

The implications are staggering:

• Biopharma companies could discover breakthrough drugs faster than ever before.

• Automakers could develop driverless car systems that really work.

• Chemical companies will develop materials we can’t even imagine.

And that’s just the tip of the iceberg, folks.

With quantum computing, we’re going to start solving problems we don’t even know we have.

Shifting to the investment implications, all these breakthroughs will redirect the flow of trillions of dollars in the global economy.

As technological advancements have done for decades, a handful of companies (and their investors) will leverage these breakthroughs to put themselves on the receiving end of this tsunami of global capital…while the companies (and employees) that don’t leverage this technology will fund that wealth transfer.

But there’s a difference today…

Because the breakthrough technology is AI/quantum computing, the wealth redistribution has the potential to occur on a scale we’ve never seen before.

And Louis believes that what’s happening just two weeks from today could serve as the starting gun…

We’re just days away from “Q Day”

Here’s Louis:

On March 20, NVIDIA will hold the first ever “Quantum Day” at their annual AI conference… or what I’m calling “Q Day.”

According to the company, it will bring together experts to consider what we should expect from quantum computing in the coming decades.

I believe this will be when NVIDIA makes its biggest announcement of the year…

And that announcement won’t just be great for NVIDIA. It’ll also be great for select “pure play” quantum computing companies that are partnering with NVIDIA.

Remember: The biggest gains will likely come from smaller “pure play” quantum computing companies.

To explain everything in greater detail, Louis is hosting a special summit on Thursday, March 13, at 1 p.m. ET – exactly one week from today, which is one week before Nvidia’s announcement.

He’s going to tell you the story of a tiny, small-cap company that’s positioned to be crucial to Nvidia’s anticipated “Q Day” reveal. It boasts quantum technology that’s protected by 102 patents.

If you’re a newer Digest reader, I should clarify something…

Louis is no stranger to making predictions about technological advancements and their impact on specific companies.

He made a similar tech prediction about Nvidia itself back in 2016. Had an investor bought Nvidia based on Louis’ analysis – and held on – they’d have 50X’d their money by now.

Louis believes 50X gains are on the table again today.

Here he is with related details:

My prediction is that NVIDIA will figure out a way to marry AI with quantum computing in a way no one has ever done before. We’re talking about the possibility of a new technological breakthrough that could affect industries worth a combined $46 trillion.

That means NVIDIA is still a solid “Buy” for long-term investors. That’s my Profit Idea No. 1.

But if you really want to make big gains, you have to start looking at the “pure play” quantum companies that NVIDIA and other Big Tech companies are partnering with. That’s my Profit Idea No. 2.

To learn more about that strategy, you need to be prepared. So, that’s why I want to join me on Thursday, March 13, at 1 p.m. Eastern.

That’s when I’m hosting my exclusive briefing: The Next 50X NVIDIA Call.

My goal for this briefing is to get you AHEAD of the crowd… AHEAD of the news outlets…

We’ll bring you more over the next few days, but to go ahead and reserve your seat for Louis’ research briefing, click here.

Whether you can make Louis’ presentation or not, recognize what’s coming

Elon Musk just referred to it on Joe Rogan’s podcast last week.

He believes A.I. will be smarter than any individual human within the next year or so. He then predicted that A.I. will be smarter than all of humanity – combined – by 2029 or 2030.

Consider the implications…

How will such a concentration of intelligence impact the global concentration of wealth?

If we follow the trajectory of tech-based wealth redistribution from recent decades, we know the general outcome…

“The less” will accumulate “far more.”

For Louis’ take on how to be on the right side of this wealth binary, join him one week from today.

And I’ll make you one promise about the event…

Louis won’t recommend you learn how to code.

Have a good evening,

Jeff Remsburg

Tom Yeung here with today’s Smart Money.

Do you remember what happened on March 1, 2018?

James Hackett probably does.

On that day, the then-CEO of Ford Motor Co. (F) saw President Donald Trump announce a sweeping round of tariffs targeting steel (25% duties) and aluminum (10%) – two of the most essential raw materials for automakers.

Over the following year, Hackett saw his company lose a fifth of its stock value – driven by a $750 million loss from tariffs and another $1.1 billion from broadly higher commodity prices. Many other importers saw even steeper declines.

But to most investors, March 1, 2018, was relatively unremarkable. The broader S&P 500 would rise 5% over the next 12 months, and high-quality tech stocks like Salesforce Inc. (CRM) and Intuit Inc. (INTU) and Advanced Micro Devices (AMD) would rise 20% … 50%… even 100%.

That’s because top companies can perform well despite interference from the top.

These innovative firms make products that are so essential that no amount of trade wars or late-night presidential tweets can seem to derail them.

Fast forward to today, and we’re watching history rhyme.

Trump has returned to the White House, and tariffs are back on the table – this time in even bigger and broader forms. On Tuesday, tariffs on Chinese goods rose another 10%, while certain non-exempt goods from Canada and Mexico saw a 25% hike. (Yes, things have shifted since then, and they probably will again tomorrow.)

Predictably, the headlines are full of doom and gloom. But for investors, there’s little reason to lose sleep over tariffs – just like in 2018.

That’s because the most successful stock market stories of the next decade will have very little to do with Chinese imports, steel prices, or even the cost of eggs.

Instead, they’ll be about companies that are reimagining the very foundations of our economy, and the ones that have discovered products so desirable that customers will put aside their economic fears to savor those products.

So, in today’s Smart Money, I’ll share more about the industries and companies driving the next decade of wealth creation.

And, most importantly, where you can find them.

Desirable Industries and Desirable Products

Consider artificial intelligence. It’s no secret that this industry has already changed the market landscape… and will continue to change that of our economy.

Over the next five years, global spending on AI will surge to $800 billion, growing at 30% annually.

Companies pioneering the infrastructure of AI – from Nvidia Corp. (NVDA) with its specialized GPUs to OpenAI and DeepSeek with their groundbreaking language models – will drive productivity gains that dwarf the cost increases that tariffs cause.

That’s not just a theoretical argument. It’s already happening.

Over the past year, U.S. companies added over 160,000 AI-related job postings, even as they slashed positions in older sectors like retail and legacy manufacturing. It’s becoming harder to get through the day without encountering AI. At this point, it’s safe to say that most of us have encountered an AI-powered customer service chatbot.

And the story goes beyond AI.

In 2018, Salesforce, Intuit, and AMD thrived not because they were immune to tariffs, but because their core products – software solutions, financial technology, and advanced semiconductors – were too valuable for businesses and consumers to ignore.

That pattern will only accelerate in 2025 and beyond. Many companies around the world will panic over the next four years as they worry about what Donald Trump will do next.

But firms that make irresistibly desirable products will steam right ahead.

One of our favorite picks in this category is Dutch Bros Inc. (BROS), a drive-through coffee shop chain with a cultlike fanbase. Customers often drive for miles to get to a Dutch Bros location… and some rabid fans have even tattooed the company’s name and logo on themselves.

That’s dedication.

In fact, this Oregon-based company has proved so popular that it’s having no trouble spreading across America. In 2024, the firm opened 151 new stores in 18 states, helping drive a 35% surge in revenues. And they’re planning to open another 160 stores this year.

Eric added the company to the Fry’s Investment Report portfolio last August, and since then shares of this firm have risen 90%.

Incredibly, one-third of that growth has happened within the past two months… after President Trump first floated tariffs.

At Fry’s Investment Report, Eric remains focused on the megatrends that will outlive the tariff noise, and the companies set to prosper within them.

Here’s why this approach is so important…

Ignore the Noise, Focus on the Megatrends

If history teaches us anything, it’s that politics makes headlines – but great products make fortunes.

Investors who panicked over the 2018 tariffs and pulled money out of the market missed out on a golden era for tech stocks. Those who instead focused on transformative trends – cloud computing, mobile software, e-commerce – saw their portfolios surge.

The same principle applies today.

The 2025 Trump tariffs will make noise, but they won’t change the fundamental trajectory of industries driving the next decade of wealth creation.

Semiconductors, AI,  next-generation energy, and advanced healthcare – those sectors will generate trillions in new economic value, completely independent of tariff rates. In addition, some select firms in traditional sectors are also going to succeed, even as rivals stumble.

Of course, there will be pain ahead for those on the wrong side of the trade war. To refer back to Ford, shares of the automaker are down 6% since Trump took office in January, and more losses could be on the horizon.

But let’s not forget the big picture: Many innovative firms are still doing incredibly well, and that’s always what matters in the end.

To learn more about the companies that will continue to weather the tariff storm, click here to become a member of Fry’s Investment Report today.

Getting Prepped for Nvidia’s “Q Day”

My colleague, the Wall Street legend Louis Navellier, certainly isn’t letting the tariff headwinds distract him from the AI boom.

As the AI megatrend quickly evolves, Louis will tell anyone who’ll listen, Nvidia has maintained its king status. And now he is telling us that on March 20, during the company’s first ever “Q Day,” Nvidia may announce a new breakthrough technology that is poised to ignite the next phase of the AI supercycle… and affect nearly every aspect of our lives.

But according to Louis, the media is missing out on the most important part of the story: One tiny small-cap company is positioned to be crucial to Nvidia’s AI reveal, thanks to its technology protected 102 patents.

So, on Thursday, March 13, at 1 p.m. Eastern, he’s holding a special time-sensitive briefing to get you ahead of the news (reserve your spot for this free broadcast by going here). Instead of buying Nvidia now, Louis will reveal six alternative stocks set to benefit from this AI breakthrough – including the one small-cap company that could deliver 10X to 50X gains.

Click here to sign up for the free event.

Regards,

Tom Yeung

Markets Analyst, InvestorPlace

Wall Street legend Warren Buffet is known for his belief that when it comes to investing in stocks, it’s best to be greedy when others are fearful. 

Well, everyone is extremely fearful right now. A global trade war has begun. Government layoffs are spiking. Job growth is slowing. The economy is weakening. Consumer and business sentiment is sliding. And stocks are crashing.

Does that mean it is time to be greedy? I think so. 

But before you go thinking I’m putting the cart before the horse, let’s talk a bit about what’s driving the rampant fear out there right now – and what’s making us bullish.

Understanding the Market Risks

This week, U.S. President Donald Trump started what may be the biggest trade war seen in a century. He enforced 25% tariffs on goods from Canada and Mexico and levied an additional 10% tariff on goods from China. In so doing, Trump has raised the average tariff rate in the U.S. from 2.3% to 11.5%, the highest it has been since World War II. 

Economists’ consensus belief is that this will have an adverse impact on the economy. 

U.S. companies will face meaningfully higher import costs and either be forced to absorb them (shrinking profit margins), pass them on to consumers (raising inflation), or reorganize their supply chains (disrupting business operations). 

No matter which path companies choose, a negative growth shock is likely. Researchers at the Federal Reserve suggest that by raising the average U.S. tariff rate to 11.5%, GDP growth will be negatively affected by 1.3%. 

Meanwhile, real-time estimates for U.S. economic growth suggest that it is trending very weak this quarter. One estimate from the Atlanta Fed shows -2.8% growth; and that was even before the trade war began. Slicing off another 1.3% would put U.S. GDP growth below -4%. 

That’s awful. And it doesn’t even take into account the tariffs yet to come…

Technology’s spooky next step … enormous potential market size … the easiest way to invest today … nervous about a market crash? Keith Kaplan has you covered

In the pantheon of business/investing clichés, high on the list is the phrase immortalized by hockey legend Wayne Gretzky:

I skate to where the puck is going, not where it has been.

The quote has been recycled and mangled by countless investment professionals in PowerPoint presentations for years.

However, it accurately reflects how wise investors set themselves up for life-changing investment returns.

So, where is the puck going today?

Here’s a clue from Tesla CEO Elon Musk:

“[This cutting-edge technology product] will be overwhelmingly the value of the company” with “the potential to be north of $10 trillion in revenue.”

Got your guess?

Sci-Fi meets real life

Congrats if you answered “humanoids.”

Humanoids are advanced robotic machines that can mirror human movements, reasoning, and day-to-day activities. They sit at the convergence of multiple technological trends: AI, biomechanics, machine learning and sensor connectivity.

Whether you think they’re cool or creepy, they’re coming…and bringing with them a multi-trillion-dollar investment opportunity.

Let’s jump to our technology expert, Luke Lango:

These creations are finally stepping out of science fiction and into reality, possibly poised to become the most disruptive AI advancement yet.

From factory floors to elder care, these machines could easily reshape industries, redefine labor… maybe even challenge what it means to be human…

Everyone who’s anyone in the tech world is betting on humanoid robots being the next big AI breakthrough. 

Tesla’s Optimus humanoid is the most visible example. And as noted earlier, Musk believes the future of Tesla isn’t in electric cars, it’s in humanoids.

Optimus is already being used inside Tesla factories to complete a variety of tasks. Reports suggest Tesla will sell them to outside companies next year.

And after that, they’re headed to a household near you.

Here’s Luke:

We could soon have our own personal humanoid robot assistant in our homes, doing everything from unloading groceries and cleaning to safeguarding our house while we’re away. 

It’s not just Tesla – all the Big Tech players are moving on humanoids

Luke points toward, Meta, Apple, Alphabet, Nvidia, and OpenAI as just a few of the companies working on aspects of humanoid technology.

Meanwhile, many private companies are involved as well. A Polish startup called Clone Robotics just released a video of “Protoclone.” This is its “faceless, anatomically accurate synthetic human.”

Source: @clonerobotics

Whether this thrills or terrifies you, some version of it is headed your way over the next 5-10 years.

Sizing the market potential

Let’s go to ETF provider and research shop, GlobalX:

The potential market opportunity for humanoids is massive, and it’s accelerating.

Tesla CEO Elon Musk and industry stakeholders believe there could be over 1 billion humanoids on Earth by the 2040s.

While adoption of single-purpose collaborative robots (cobots) is already widespread in industrial settings, the potential of general-purpose humanoid robotics remains largely untapped, with their appeal being their versatility.

Humanoids are now a tangible reality, capable of working in diverse settings like hazardous factories, and elderly homes, bringing innovative solutions to sectors like logistics, manufacturing, and healthcare.

Given the widespread potential use cases for industrial humanoids, GlobalX puts the total industrial addressable market size at nearly $2 trillion over the next decade.

But the market for household humanoids could be even bigger. GlobalX estimates 15% household penetration and a price point of $10,000 – $15,000. That results in a market size of almost $3 trillion by 2035.

So, how do you invest?

We profiled the easiest way to invest back in September.

Regular Digest readers will recall an issue in which I shared part of an internal email from InvestorPlace’s CEO Brian Hunt to a few members of our leadership team.

Brian described the technological advancements coming (like humanoids), the potential for market volatility, but the even greater potential to make enormous wealth over the next five to 10 years.

With that as our context, here’s Brian from that email with the most effortless way to ride this trend:

If you want to make it simple, easy, and powerful, just look up the five largest AI/robotics ETFs and buy them in equal parts and go to sleep for a while. Maybe throw in some QQQ.

Ignore the corrections. They will be painful but temporary.

This tailwind will blow with hurricane force.

As our experts make their single-stock humanoid recommendations over the coming quarters, we’ll highlight them for you. For now, Luke is eyeing the next step in the evolution toward humanoids – self-driving cars:

The next stage of the AI Revolution has begun. 

But it’s about more than just humanoid robots unloading groceries or doing factory work. It also includes robotic driving systems – like self-driving cars. 

This future may still seem many years away. But it’s already a reality… Of course, the arrival of the Age of Autonomous Vehicles also means the arrival of huge opportunities in AV stocks. 

If you’d like a deeper dive into the opportunity, Luke just put together a special informational presentation focused solely on the Autonomous Vehicle Revolution. You can check it out here.

What if you can’t handle the market corrections that Brian referenced?

Not everyone has a decade-long investment horizon.

What if you’re a few years from retirement and can’t afford the type of painful pullback Brian referenced?

What if you’re saving for a downpayment on a home, or a child’s tuition, or an aging parent’s healthcare needs, and you can’t absorb a haircut of, say, 30% on your capital?

You need a tool to help you sidestep the worst of a bear market crash. And that’s where the quant-based market tools from our corporate partner, TradeSmith, come in.

Here’s a quick story from TradeSmith’s CEO Keith Kaplan to illustrate:

It was early 2020 and I had flown to Florida to meet with a group of 50 of my peers where each of us pitched our best and biggest investment ideas.

When it was my turn, I told them all “I sold almost all my stocks on Friday.”

As you would imagine, I was not the most popular person in the room.

I urged people to protect their investments and consider warning their subscribers that a bear market was rapidly approaching.

I even showed them proof of how I knew we were headed toward the fastest bear market in history — one that would catch everyone by surprise and destroy years of wealth building.

I showed them the alerts I received and then how accurate these alerts have been over the last 20 years.

I was laughed at and told not to panic. Not a single person in the room wanted to hear what I had to say.

But anyone who acted on my systems advice saved their portfolio.

Keith was using a quant-based trading tool that sent him “bear market” alerts.

Here’s an example of what he saw on Friday February 27, 2020…

…which was shortly before the S&P 500 suffered its steepest plunge in the Covid crash…

Back to Keith:

In 2020, my personal portfolio was saved a huge loss thanks to the indicators I got.

Next Thursday at 8 PM ET, Keith is holding an event to explain how this tool works, and how it could help protect your wealth from a similar crash

If protecting the money that you already have is as important as generating new investment gains, this event is for you.

That said, I’ll point out that this same tool works in reverse – notifying investors when to buy back in after a crash.

Returning to Keith, here he is describing what happened not long after those sell alerts arrived:

Just a month later, our indicators did it again, alerting me to a bullish set up in the markets.

By this time the CNN Fear and Greed Index had plummeted to extreme fear and people were nervous.

Heck, I was nervous!

But again, I trusted the math and these signals, and I took action. I started gobbling up stocks that had big pullbacks and were noted “healthy” in our system by their green designation.

Boy was that the right decision!

As you know, the S&P would go on to soar nearly 70% from its March 2020 low through the end of that year.

Source: TradingView

I’ll bring you more on TradeSmith’s market timing tool over the next few days, but to reserve your seat for next Thursday’s presentation right now, click here.

During the event, Keith will walk through how this tool helps you know:

• When to buy a stock
• How much of a stock to buy
• When to sell a stock
• And how risky that stock is – how much movement you should expect

He’s also going to unveil the biggest market prediction in his company’s 20-year history.

It’s all next Thursday at 8 PM ET.

More on this to come…

In the meantime, start looking into humanoids. It’s going to be a big one.

Have a good evening,

Jeff Remsburg

Hello, Reader.

Over the course of human evolution, we Homo sapiens have developed a survival instinct called the “negativity bias.”

This rather pessimistic term refers to the theory that negative events impact us more significantly than positive or neutral events, even if the positive or neutral events far outweigh the negative ones.

As early humans, this trait served us well. Our ancestors faced greater immediate dangers, like predators and environmental hazards.

We can all agree that when confronted with a woolly mammoth, you’d want to consider every dire outcome. So, prioritizing negative stimuli provided an evolutionary advantage.

As modern humans, though, this cognitive bias can cause a lot of mental turmoil. Especially since our current president is the master of creating dizzying headlines.

Truth be told, I believe that “headline risk,” is probably the most significant new risk investors will face throughout the Trump administration.

However, a lot of present-day fear is grounded in reality.

Yesterday, President Trump made good on his tariff threats against Mexico, Canada, and China. Citing ineffective border controls (and other grievances), he implemented additional 25% tariffs on imports from our neighbors to the north and south and a 10% additional tariff on imports from China.

Canada responded with a package of tariffs on $107 billion worth of goods. China responded by announcing additional tariffs of up to 15% on imports of U.S. farm products such as poultry, chicken, and beef. Mexican President Claudia Sheinbaum condemned the tariffs and said her government would respond soon.

Markets began to sell off yesterday as a result of the tariffs. All of the major indices opened sharply lower in the morning. And at one point, they were all down by more than 1%.

Now, as investors, it’s important not to let negativity bias get the best of us when the market is volatile. While the headlines may be scary, there’s always a chance that negative events, like the woolly mammoth, will become extinct.

So today, I’d like to share the best course of action to take when faced with market volatility… and the best way to hedge against the chaos.

Stay Steadfast

Brian Hunt, the CEOhere at InvestorPlace, puts it well…

Our instincts make us pay close attention to potential dangers… both real and imagined. So, our subconscious minds compel us to click on bearish headlines, fixate on disasters, worry about elections, buy magazines with gloomy forecasts on their covers, and fret over 15% stock market corrections.

I encourage you to let common sense and the facts shape your actions instead of leaving it up to caveman thinking.

You’ll be far more successful investor if you do.

Why do I say that? And what are the facts?

Well, just consider that the stock market has averaged a positive annual return of 10% for the past 100 years. This is because the trend of increasing prosperity that is powered by free markets and free enterprise is one of the strongest trends in human history.

And here’s another important fact…

During the 20th century, stocks appreciated in value by 1,500,000%.

A 1,500,000% return turns every $100 invested into $1.5 million.

Of course, the 20th century was fraught with its own turbulence. The Great Depression… World War I and World War II… the Korean War… the Cuban Missile Crisis… the Watergate scandal… the list goes on.

However, as Hunt says…

Despite all these things, U.S. stocks appreciated in value by 1,500,000% during the 20th century.

Despite something bad happening every decade, incredible wealth was created by innovative businesses like The Coca-Cola Co. (KO), Ford Motor Co. (F), Hershey Co. (HSY), Intel Corp. (INTC), General Electric Co. (GE), McDonald’s Corp. (MCD), The Procter & Gamble Co. (PG), Tootsie Roll Industries Inc. (TR), Pfizer Inc. (PFE), Walmart Inc. (WMT), Starbucks Corp. (SBUX), and thousands of others.

We all know there are problems in America…

These topics are covered daily in the news. They are the subjects of best-selling books. They have many people paralyzed by fear.

But if you know your history and know how powerful American innovation is, you know this is no cause to sell your stocks and crawl into a hole.

John W. Gardner, the Secretary of Health, Education, and Welfare under President Lyndon B. Johnson, once said, “History never looks like history when you are living through it.”

But the reality is that history does rhyme, and there is precedent for remaining steadfast in the face of market volatility.

So, in agreement with Hunt, I still prefer the wait-and-see approach. In fact, this approach has already worked in the last 24 hours. Trump may soon announce tariff compromise deals with Canada and Mexico.

Yesterday, Commerce Secretary Howard Lutnick said, “I think [Trump] is going to work something out with them – it’s not going to be a pause, none of that pause stuff, but I think he’s going to figure out: you do more and I’ll meet you in the middle some way.”

Following Lutnick’s remarks, the stock futures tied to all three major averages rose.

So, it is important to curb our negativity bias.

Protection Against the Unknown

That said, if we want to pass by a woolly mammoth unscathed, it’s prudent to have a spear. Likewise, we want our portfolios to offer us the same sense of protection.

I believe that gold and gold stocks offer security in the face of uncertainty or market volatility.

When the S&P 500 index, the Dow Jones Industrial Average, the Nasdaq Composite, and the Russell 2000 were all in the red yesterday, gold was not. In fact, the futures contract for the price of gold in April 2025 ended the trading day yesterday 0.67% higher… and it is up 0.42% as I write today.

Now, I do not recommend “loading the boat” with precious metals. But I do recommend buying them as a hedge against unforeseen financial trauma. In other words, buy scarcity, at least as a hedge.

While many investors may rush to buy physical gold or gold stocks, there is a more powerful way to capitalize on this golden hedge – one that multiplies your returns.

It’s by using long-term equity anticipation securities (LEAPS), which are long-dated options contracts with expiration dates one to three years away. (Options may sound scary, but they don’t have to be. You can learn more about trading options in my free special broadcast, here.)

Every option is identified with a specific stock. And we’ve had major success with a recent LEAPS option on SPDR Gold Shares (GLD), the first U.S.-traded gold ETF.

I recommended a LEAPS option on GLD to my Leverage subscribers on March 21, 2024. The call had an expiration date of June 20, 2025.

Since then, we’ve sold…

• A one-fourth position on April 18, 2024, for a 379% gain…
• A one-fourth position on September 19, 2024, for a 94% gain…
• A one-fourth position on September 20, 2024, for a 110% gain…
• And the final one-fourth position on October 18, 2024, for a 292% gain.

Overall, those who followed my LEAPS strategy in Leverage pocketed a whopping 220% gain on this GLD call.

To learn more about this strategy, I’ve created a special presentation that explains how anyone can take advantage of LEAPS. In the broadcast, you’ll also learn how to access a special report that lays out three LEAPS trades with the potential to double your money in just a few months.

Click here to learn how to join Leverage and take advantage of this powerful options strategy.

Regards,

Eric Fry

P.S. Tariffs, along with geopolitical uncertainty and stalled-out price action, have been throwing a wrench into the works this year.

But our partners at TradeSmith couldn’t be more certain about what’s coming.

And what’s coming is the continuation of an epic melt-up that officially began in April of last year… and will likely only accelerate over the next 12 months.

Click here to watch TradeSmith CEO Keith Kaplan’s free special broadcast that includes full details on his Mega Melt-Up thesis… and a breakdown of his new trading strategy.

A big slowdown in job growth … statistics and perspective on this pullback … gold miners are trading at discount valuations … two trades to consider

Job creation hit the brakes last month.

This morning, ADP’s private sector jobs report showed February’s gains clocked in at just 77,000 workers. That’s miles beneath January’s revised number of 186,000 and substantially lower than the consensus estimate of 148,000.

For what’s behind the slowdown, here’s Nela Richardson, ADP’s chief economist:

Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month.

Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.

As we’ve been highlighting here in the Digest, “uncertainty” is the big market overhang today.

Will President Trump’s tariffs be fleeting or long-term? How will they impact corporate profits? How will they affect consumer spending? How will they influence inflation and the Fed’s interest rate policy?

This swirl of questions has weighed on the market since mid-February.

As we’re going to press, we’re getting welcomed news that’s helping the market

President Trump has given a one-month tariff exemption to the big three U.S. automakers.

From Press Secretary Karoline Leavitt:

Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage.

Stocks are rallying on the news. The hope is that this is a foreshadowing of additional tariff concessions to come.

Meanwhile, earlier today, Commerce Secretary Howard Lutnick suggested the Trump administration could scale back tariffs on Canadian and Mexican goods. An announcement with more details could come as soon as this afternoon. As we go to press, that update hasn’t arrived.

But even if that announcement comes, a “scale back” isn’t a “removal.” And so, the impact of scaled-back-yet-sustained tariffs remains an uncertainty…which Wall Street hates.

Returning to jobs, the most important report comes on Friday with the Labor Department’s Bureau of Labor Statistics report on nonfarm payrolls. It could be a market mover.

We’ll report back.

One thing to remember if the recent market drawdown has you feeling rattled…

It’s normal.

As I write, the S&P is down about 5% from its high. This doesn’t even register as a “correction,” as defined by “down 10% from the most recent high.”

So, in the grand scheme of things, this is far less a massive 10-car pileup, and more so the slightest of parking lot fender benders.

But what if we get a 10% correction, or even something a bit deeper?

Such pullbacks are commonplace in Wall Street’s long history. Here’s some perspective from Kiplinger:

Since the 1950s, the S&P 500 has experienced around 38 market corrections. That means that historically speaking, the S&P 500 has experienced a correction every 1.84 years.

Considering that the S&P’s last correction came in 2022, we’re basically right on schedule.

And how long should we be prepared to endure this?

Obviously, no one knows. But American Century Investments crunched the numbers and found that if this pullback reaches “correction” territory but doesn’t slip into a full bear market, then, on average, we’re in for a 14% drawdown that will last about four months.

How do you manage your portfolio during such a drawdown?

A study of market history shows that the best thing to do is ignore it.

Of course, if your specific investment timeline and/or financial situation requires you to pull your money out of the market, do what you must. But if you’re investing for a longer period, log out of your brokerage account and go live your life as you wait for the inevitable rebound.

Here’s Schwab with perspective on that eventual bounce:

Occasional pullbacks have historically been followed by rebounds, according to the Schwab Center for Financial Research.

Since 1974, the S&P 500 has risen an average of more than 8% one month after a market correction bottom and more than 24% one year later.

Schwab delved into additional historical data on corrections, concluding:

Despite these pullbacks, however, stocks rose in most years, with positive returns in all but 3 years and an average gain of approximately 7%.

This brings to mind the 2025 market forecast from our hypergrowth expert Luke Lango, editor of Innovation Investor:

We think this will be the pattern for the stock market for the foreseeable future: two steps forward, one step back. Lather, rinse, repeat. 

And yet, I still think stocks are going higher in 2025.

Bottom line: Pullbacks like the one we’ve been experiencing today are 100% normal. Take it in stride.

A different way to play the gold bull market

As I write Wednesday, the yellow metal is barely 0.3% below a new all-time high.

But rather than discuss investing in gold today, let’s highlight gold miners. You can think of this as investing in gold yet with operating leverage. 

You see, there’s something strange happening with miners today…

While gold’s price has been hitting new highs in recent months, sentiment toward miners has been lukewarm at best. This is resulting in valuations near historic lows.

Here’s Barron’s from last month:

Gold stocks, despite their gains, really do look like bargains.

The VanEck ETF trades at just over 12 times 12-month forward earnings, a 44% discount to the S&P 500’s 22 times, a much wider gap than the 10-year average of 20%.

Narrowing the price/earnings gap to that average discount would bring the ETF up to just over 16 times, landing it, once again, at $51.

Let’s get a visual on this inconsistency between gold and miners.

As you can see below, since spring 2022, while gold has climbed almost 50%, gold miners, as represented by the VanEck Gold Miners ETF, GDX, are basically flat.

(Disclosure: I own GDX.)

This is abnormal. Typically, top-tier gold mining stocks make moves that are 2X- 3X the size of gold’s move. This reflects the swelling profits that miners enjoy as gold’s market price rises above breakeven costs…or the snowballing losses they suffer when prices swing the opposite way.

Recently, miners haven’t been commanding this premium. Here’s Mining.com:

The gold miners’ stock prices have largely decoupled from their metal, which overwhelmingly drives their profits.

This fundamental disconnect has spawned a shocking valuation anomaly, with gold stocks far too low relative to gold. But this aberration won’t last, as markets abhor extreme deviations from precedent.

Mean reversions and proportional overshoots soon follow, so gold stocks will soar to reflect their record earnings.

But why are miners lagging so badly?

First, miners usually sell their gold based on long-term contracts or hedging strategies. This creates a lag in profits even as gold hits all-time highs.

Beyond that, the question is usually better answered on a case-by-case basis. But here are some of the top reasons why miners are lagging:

• They’ve faced higher operating costs due to inflation
• Environmental and regulatory costs have also increased
• Some miners have a history of poor capital allocation (bad acquisitions, excessive debt, shareholder dilution)
• Many mines operate in politically unstable regions, leading to supply chain disruptions, government intervention, or nationalization risks

Remember to do your due diligence and be discerning about which miners you buy, but the opportunity today looks compelling.

For your own research, I’d recommend looking at Agnico Eagle Mines (AEM) and Alamos Gold (AGI). They’re generating enormous free cash flow today. And, of course, there’s GDX, which gives you exposure to a basket of top miners.

Finally, are you feeling courageous?

One of Warren Buffett’s most famous quotes is to “be fearful when others are greedy and to be greedy only when others are fearful.”

Well, we’ve got the “Fear” part covered.

Even though stocks are up as I write Wednesday, CNN’s Fear & Greed Index puts us at “Extreme Fear.”

So, are you ready to be greedy?

If so, here’s an idea…

According to TrendSpider, the trade is to buy QQQ (a fund that tracks the Nasdaq 100) when its price is 10%+ off its 20-week range high.

In the last 10 years, when following this entry signal, the average returns six months later have been 13.5% with an 82% win-rate.

Here’s the chart from TrendSpider.

Source: TrendSpider

For another idea, I’d point you to our global macro expert, Eric Fry, the editor behind Leverage

In Leverage, Eric recommends LEAPS trades, which stands for “Long-Term Equity Anticipation Security.” You can think of this as an option with a longer-dated expiration, usually lasting from one to three years.

One of the main reasons to use LEAPS is because of the “leverage” they afford investors. As Eric writes, you “put down a small investment to control a large amount of stock.”

As an example of the potential payoff, last month, Leverage subscribers locked in gains of nearly 300% on their Dutch Bros. Inc. (BROS) call options that they opened in July.

Now, less than two weeks ago, Eric recommended a miner that he called a “hidden” gold play.

From Eric:

[This miner’s] relatively low valuation underscores its identity as hidden gold play.

Its shares are trading for just six times gross earnings (EBITDA), which is 40% lower than the valuation of the Philadelphia Gold and Silver Index (XAU) stocks.

Since that recommendation, this stock has fallen slightly in sympathy with the broad market. But this is offering investors an even better entry price on what could be a monster trade if gold mining stocks roar higher as history suggests they’re likely to do.

To learn about joining Eric in Leverage to get the details on this trade, click here.  

If jumping into QQQ or Eric’s “hidden” gold trade makes you nervous…

That’s totally normal.

But here are a few words of wisdom from wise (and very successful) investors who have gone before us.

From billionaire Rob Arnott, founder and chairman of the board of Research Affiliates:

In investing, what is comfortable is rarely profitable.

And J.P. Morgan:

In bear markets, stocks return to their rightful owners.

Finally, Cullen Roche:

The stock market is the only market where things go on sale and all the customers run out of the store.

Bottom line: Don’t take on more risk than is appropriate for you and your financial situation, but recognize that one investor’s panic sale is another investor’s bargain entry price.

Have a good evening,

Jeff Remsburg

Right now, the U.S. economy is slowing rapidly. 

According to the Atlanta Federal Reserve’s GDPNow model, “the estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -1.5% on February 28, down from 2.3% on February 19. The nowcast of the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points, while the nowcast of first-quarter real personal consumption expenditures growth fell from 2.3% to 1.3%.”

And as recent data from ADP’s employment report shows, employers added just 77,000 jobs in February, far below January’s upwardly revised 186,000 and below the 148,000 estimate.

All this weak data and ongoing economic uncertainty has kept the stock market in volatile territory. 

As the following chart shows, the S&P 500 has endured near-constant up-and-down action for the past several months. In fact, just in the past five days, the index has fallen about 3%. It has tested and broken its 100-day moving average (MA) and is now approaching a test of its 200-day MA.

With President Trump’s trade war with Mexico, Canada, and China looming large, things could get even worse in the coming months, potentially tipping the global economy into a recession and plunging stocks into a full-blown bear market. 

That’s the bad news. 

But here’s the good news. 

We actually see huge opportunities emerging amid all this economic uncertainty and stock market volatility. 

Follow me here…

Weak Economic Data Abounds

In our view, there’s no arguing that the U.S. economy is buckling under the pressure of policy uncertainty. No matter where you look, the data is weakening. 

Consumer sentiment has crashed, as shown by the Conference Board’s Consumer Confidence Index, which declined by 7.0 points in February. 

Consumer spending has slowed, with personal consumption expenditures (PCE) decreasing $30.7 billion (0.2%) in January, according to the Bureau of Economic Analysis. 

Inflation expectations have surged higher, from 5.2% to 6% in February. 

Business investment has slowed, down from $938 billion in Q3 of 2024 to $809 billion in Q4.

At the end of 2024, the U.S. economy was growing at a 2.3% clip. But based on real-time estimates from the Atlanta Fed, the economy is now contracting at a 2.8% clip. In other words, over the past two months, we’ve gone from steady growth in the U.S. economy (+2.3%) to meaningful contraction (-2.8%). 

That’s not good. 

And this slowdown to -2.8% GDP growth happened before the onset of a global trade war. 

Trump has enforced 25% tariffs on Mexico and Canada and has also levied additional tariffs on China. All three countries have responded with reciprocal tariffs of their own… meaning the global trade war has officially begun. 

According to calculations from Bloomberg Economics, all these tariffs will raise the average U.S. tariff rate from 2.3% to 11.5% – the highest it has been since World War II. 

Such a drastic rise in the average U.S. tariff rate will only further hinder economic growth.

Understanding the Risks to the Economy

According to estimates from the Fed, hiking the U.S. tariff rate from 2.3% to 11.5% would negatively impact the U.S. GDP growth by about 1.3%. 

We’re running at -2.8% GDP growth right now… before the trade war. And current tariffs already in place should knock that down another 1.3%… which means we’re looking at potentially -4.1% GDP growth. 

And that doesn’t even include any of the other tariffs Trump plans to enact over the next month. He’s said that he wants to implement 25% tariffs on all steel and aluminum imports, as well as 25% tariffs on cars, chips, and pharma goods. He is also planning to launch global reciprocal tariffs next month. 

If even just a portion of these threatened tariffs go into effect, that would negatively impact U.S. GDP growth by at least another 1%. If so, then with all these tariffs, we’re looking at a potential pathway to -5% GDP growth by the summer. 

By any and all metrics, that negative growth would be consistent with a recession. In fact, a -5% GDP would actually be consistent with a very bad recession – not a mild one. 

In other words, the global trade war – if it persists – could tip the U.S. economy into a recession by summer. 

Of course, if that happens, the stock market is likely to crash. 

Trade wars continue to roil the stock market … good news on the semiconductor front … an AI Applier recommendation from Eric Fry … more jobs losses due to AI

Earlier today, all three major stock indexes found themselves deep in the red as President Trump’s trade war escalates.

This morning, 25% tariffs on imports from Canada and Mexico went into effect, as did 20% levies on Chinese goods.

In response, China will impose new 10%-15% tariffs on certain U.S. imports next week… Canada is applying 25% tariffs on more than $20B of U.S. imports immediately … and Mexican President Claudia Sheinbaum said she will announce her tariff plans this weekend.

Stepping back, brief levies used as a negotiating tool are one thing… extended tariffs as a “new normal” for U.S. trade policy is another.

Today’s market upheaval reflects fears that we’re slipping into a “new normal” that would weigh on corporate earnings and the U.S. consumer.

The related economic uncertainty is creating a “batten down the hatches” mindset for corporate managers that’s slowing business activity.

For more on this, let’s jump to our hypergrowth expert Luke Lango. From yesterday’s Innovation Investor Daily Notes:

The U.S. economy is clearly buckling under the pressure of heightened policy uncertainty.

GDP grew by 2.3% in the fourth quarter of 2024. Real-time estimates for GDP growth in Q1 have fallen to -1.5%.

In other words, U.S. economic growth has fallen off a cliff over the past two months from steady growth (2.3%) to fairly meaningful contraction (-1.5%) …

According to the February ISM Manufacturing Report released [yesterday] morning, the U.S. economy is moving in all the wrong directions right now.

Business activity is collapsing, with the New Orders index falling from 55.1 to 48.6 – its lowest level since October 2024.

Labor conditions are deteriorating, with the Employment index falling from 50.3 to 47.6 – its lowest level since October 2023.

And inflation pressures are spiking, with the Prices Paid index surging from 54.9 to 62.4 – its highest level since June 2022.

Everything is going in the wrong direction.

Before we get too bearish, Luke remains optimistic that these tariffs won’t become permanent

He sees stocks roaring back when today’s uncertainty dissipates. And that point is approaching.

Back to Luke:

Policy uncertainty will abate in the coming weeks. It may even be replaced by policy optimism as the new administration shifts its focus from tariffs and federal spending cuts to deregulation and tax cuts.

As that happens, stocks should rebound…

Aside from policy risks, the fundamentals underlying the stock market remain positive and strong. That’s why we believe that as policy risks ease, this market will blast higher.

I’ll note that stocks are trading off their morning lows as I write early afternoon. The Nasdaq has jumped from “2% down” to less than half a percent lower.

Who knows where we’ll close, but this is encouraging, and has shades of Luke’s forecasted rebound.

Circling back to tariffs, Trump will likely defend/promote his policies tonight when he delivers the first joint congressional address of his second term. In the meantime, mind your stop-losses…and look for great stocks that are now selling at panic prices.

I’ll share one stock to consider below.

Following the trail of innovation…

Let’s follow the steppingstones.

AI is the future…

The nation that leads the AI race will gain a significant edge – both economically and militarily – over its rivals…

At the heart of this competition lies cutting-edge semiconductor technology…

And that places Taiwan Semiconductor Manufacturing Co. (TSMC) squarely in the global spotlight.

According to The Economist, Taiwan produces more than 60% of the world’s semiconductors and over 90% of the most advanced ones. And most of them come from TMSC.

To make sure you’re not confused, Nvidia designs the most advanced AI chips, but it does not manufacture them. Instead, it relies on TSMC to produce its cutting-edge chips, including the latest GPUs used for AI.

With this context, yesterday brought important news.

From The Wall Street Journal:

Taiwan Semiconductor Manufacturing Co. intends to invest $100 billion in chip-manufacturing plants in the U.S. over the next four years under a plan expected to be announced later Monday by President Trump, according to people familiar with the matter.

The investment would be used to build out cutting-edge chip-making facilities.

Such an expansion would advance a long-pursued U.S. goal to regrow the domestic semiconductor industry after manufacturing fled largely to Asian countries in recent decades.

This is a big next step in our AI war with China

Taiwan – particularly TMSC – is a potential flash point between the U.S. and China.

China has increasingly asserted its intention to reunify with Taiwan, using both military posturing and political pressure. Recent activities include intensified military drills and frequent incursions into Taiwan’s air space. Experts suggest this signals a readiness to use force if Beijing deems it necessary.

Here’s The Guardian:

China’s military launched a record number of warplane incursions around Taiwan in 2024 as it builds its ability to launch full-scale invasion, something a former chief of Taiwan’s armed forces said Beijing could be capable of within a decade.

TMSC – being the world’s largest contract chipmaker and a key supplier of cutting-edge semiconductors – is critically important to both China and the U.S., making the news of the $100 billion investment even more significant.

Domestic chip production would be critical if a worst-case scenario plays out between the U.S. and China over the coming years.

We’ll keep you updated as this story unfolds.

Meanwhile, a reminder to invest in “AI Appliers” – even more so today while the markets are panic selling

If you’re new to the Digest, “AI Appliers” are the companies using AI to grow revenues, cut costs, and beef up bottom lines. Here’s a bit more color from our global macro expert Eric Fry, editor of Investment Report:

AI Appliers take foundational tech breakthroughs – like Nvidia AI chips – and profit off utilizing them.

Some companies use AI to enhance businesses, while others provide the energy AI needs to run.

These are the companies now set to produce strong investment gains in the coming years.

In recent weeks, we’ve highlighted various AI Appliers recommended by our experts. Let’s highlight with another one, courtesy of Eric:

Coupang may not be a household name here in the United States, but the company is well known in every South Korean household. Coupang is South Korea’s go-to provider of Amazon-like services.

In his analysis, Eric highlights the company’s Q1 2024 earnings call in which founder Bom Suk Kim spoke to Coupang’s AI initiatives.

I’ll include a snippet of it below, as this is the exact type of commentary that we should be looking for from the CEOs of the companies in which we’re investing today.

From Kim:

Machine-learning and AI continues to be – have been a core part of our strategy. We’ve deployed them in many facets of our business from supply chain management to same-day logistics.

We’re also seeing tremendous potential with large language models in a number of areas from search and ads to catalogue and operations among others.

There is exciting potential for AI that we see and we see opportunities for it to contribute even more significantly to our business.

But like any investment we make, we’ll test and iterate and then invest further only in the cases where we see the greatest potential for return.

This focus isn’t new. Eric notes that Coupang’s e-commerce platform already utilizes AI and advanced robotics.

Meanwhile, the company’s other patent-protected AI-related tech can predict future order volumes, alert product managers when prices fluctuate significantly, optimize Coupang Eats delivery, and enhance search accuracy.

And if this isn’t enough, there’s one final reason to consider Coupang…

Stanley Druckenmiller – arguably one of the greatest traders of all time – is heavily invested.

For newer Digest readers, “the Druck” is a market legend. He’s credited alongside George Soros as “breaking the Bank of England” when the two made $1 billion from shorting the pound. He has perhaps the best long-term investment track record of any investor alive.

As of mid-November 2024, Coupang was one of his top five holdings.

Bottom line: If you’re looking for a top AI Applier that’s not already in the average U.S. investor’s portfolio, give Coupang a hard look.

By the way, the stock is down about 10% over the last two weeks as this selloff continues.

For additional AI Appliers that Eric is recommending in Investment Report, click here to learn about joining him.

Finally, maintain a big-picture perspective on why you’re investing in AI

Unfortunately, it’s not just about investment gains…

It’s about being on the right side of history and securing your future.

Right now, in closed-door business meetings around the country, executives are having the same conversation…and it’s leading to the same action step…

The most effective way for companies to increase profits today is by letting go of expensive, error-prone human workers and replacing them with inexpensive, near-perfect AI workers.

Here’s a tiny sampling of what’s been happening in the corporate world recently:

• Salesforce: Management announced layoffs due to artificial intelligence, indicating a strategic move towards automation to enhance efficiency.
• Autodesk: The software company will cut approximately 9% of its to increase efficiency and focus on growth areas such as artificial intelligence.
• Workday: They’ll be laying off about 8% of its workforce as part of a shift towards more AI-driven solutions and investments.
• Duolingo: In January last year, it offboarded 10% of its contractor workforce as the company pivoted to AI for content translation.
• Siemens: It’s considering cutting up to 5,000 jobs globally in its factory automation sector due to ongoing challenges, with a focus on integrating AI to enhance efficiency.

I could list dozens of these stories, but they all point to the same takeaway…

AI is replacing a growing number of the corporate workforce

Executives will do all they can to avoid directly stating this reality. After all, it looks terrible in the headlines. So, they’ll mask it with business jargon, using words like “efficiency” and “streamlining.” But the takeaway is the same…

More jobs lost to AI/automation.

To be clear, this isn’t about struggling companies using AI as a lifeline to right the ship and return to profitability. Most of the companies incorporating AI today are profitable. But AI can help them become even more profitable.

Here’s Forbes making this point yesterday in an article highlighting corporate job cuts coming in March:

Michael Ryan, a financial advisor, says that AI is a big driver in the announcements…

“It’s not like these companies are struggling to stay afloat. They’re making these cuts while their bottom lines look good.

“I think what we’re seeing isn’t just a normal economic hiccup. It feels more like companies are using this moment to fundamentally reshape how they operate.

“They’re thinking, ‘Well, if we can replace these positions with automation, why wouldn’t we?’”

This is the direction corporate America is headed. Here’s how I put it in our Oct. 7, 2024, Digest:

Imagine a billiards table with its pool balls spread about the table randomly…

Now, imagine hoisting up a corner of the table so that all the balls roll into a single pocket.

This is the financial impact of Artificial Intelligence (AI) on global wealth.

AI is lifting the billiards table… the pool balls are global wealth/investment capital… and the one pocket receiving all the balls are the owners of the businesses that wisely and effectively implement AI technologies.

What about the five other empty pockets?

Well, they’re the businesses that fail or are unable to adapt to next-gen AI technology or business models. They’re also the “regular Joes” who get shafted financially as AI steps in to do their jobs faster, better, and cheaper…

In the era we’re entering, there will be just two types of people: the owners of AI, benefiting from the lopsided flow of capital, and everyone else, who are watching AI swallow their former economic productivity like light into a black hole.

So, what do we do?

From an active income perspective, become proficient at whatever AI tools are most relevant to your industry (if applicable), and use them to make yourself more effective.

From a passive income perspective, your best defense is a good offense of well-placed AI investments.

That’s what we’re trying to help you achieve here in the Digest with recommendations like CPNG.

Bottom line: Make sure you’re ready for what’s coming…because it’s already begun.

Have a good evening,

Jeff Remsburg

February was a bumpy month for the overall stock market and our stocks.

Distractions like Trump 2.0’s latest tariff threats, the German elections, DeepSeek’s AI claims, weak consumer confidence and elevated inflation caused some wild market swings. As a result, all of the major indices ended the month of February lower, with the S&P 500 down 1.4%, the Dow down 1.6% and the NASDAQ down nearly 4%.

March has gotten off on equally volatile footing. Yesterday, markets began to sell off as deadlines approached for President Trump’s threatened tariffs against Canada and Mexico. As a result, the S&P fell 1.7% on Monday to post its worst day of the year. Meanwhile, the Dow lost 1.5% and the tech-heavy NASDAQ dropped 2.6%.

The stock market threw another hissy fit over tariffs today, with all of the major indices opening sharply lower this morning. At one point, they were all down by more than 1% before moderating those losses in afternoon trading. As investors digested the tariff news, they began to worry about how they will impact the U.S. economy now that they are in place. 

So, in today’s Market 360, let’s review the latest tariff news. I’ll explain why we shouldn’t worry and what we need to remember during market selloffs. Simply put, good stocks will bounce. I’ll share an example of one such stock… and why quantum computing should serve as a catalyst for it in the future.