Good Morning, Last week we we finally got an end to the longest Government shutdown in history! Somehow I feel like the whole thing was not necessary and have to ask why it had to come to this in the first place. I understand that politicians have issues that their passionate about, but in the end they either have the votes to advance their agenda or they do not. So why do they have to try attach it to a bill that funds the government? There is a proper time to address these issues when you don’t have the votes you need to pass the legislation that you want and that is during the midterm elections, not when passing a continuing resolution to keep our government open that so many depend on. This is democracy! If you don’t like something then simply vote against it.  If not, then wait until you can. Yes. I’m expressing a little frustration and you know what? I will express even more the next time I vote!!!!!

This morning finds us again with an unsure and unsettled market. So what gives? I about half expected stocks to take off after the shutdown was ended. So why is the market still choppy? The main issue is the AI trade that has led the market higher in 2025. You see the AI darling of darlings Nvidia reports on Wednesday and it is the largest company by market cap in the market. This rep0rt is considered by many to be a health check for the AI trade. There have been massive amounts of money spent by tech companies to develop artificial intelligence. Excited investors have bid the stock prices higher on all AI and AI related stocks until their valuations have reached nose bleed territory. This has caused many investors to doubt whether or not these stocks are worth the price. So they are unsure of the trades they have made and need someone to hold their hand while they continue to invest in AI. Many of them are just having trouble seeing h0w all this investment will pay off or to put it another way how it will justify itself. Here’s my take on it. First of all many of you are wondering what this has to do with TSP. Plenty! Many if not most of the largest companies in the major indices are investing heavily in AI. Since they represent such a large part of the market cap of the market as a whole they affect the direction of the major indices. Thus, they have a direct effect on the TSP funds that we invest in. In other words, so goes AI, so goes the market. Now here’s why I think you should not be overly concerned with this. Many market players love to say that AI related stocks are in a bubble just like the dot com stocks were in 1999. That is absolutely not the case with AI. To begin with, dot com stocks  were inflated and had no way to create new value. AI stocks on the other hand do. By the matter of fact the investment heretofore that investors are so worried about is only a drop of in the bucket of value that AI will create. Investors that cannot see that are short sighted! I will give you one small example of why I say this. I invested in a stock recently that uses AI to sell, write policies for, and manage insurance. This company, which I will leave unnamed, as many new small companies are, was unprofitable. When you invest in a company like this it is considered speculative in nature. You are betting that they will eventually make profit. So after putting the AI in operation for about a year, the company blew it’s earnings report out of the water! After several natural disasters occurred of the east and west coasts the company was able to post the surprise earnings beat after the AI accurately predicted and efficiently managed the events. In other words, the AI created value where value had not previously existed. My results? I made over 300% profit on the stock in short order. A stock that analysts said prior to the earnings report was overvalued. See theme here?  This folks is the reason that AI is not the same as the internet stocks where back in 1999. I find it amusing that many of the investors that are crying wolf about AI were either not invested or in some cases not even alive during the dot com bubble. Here’s what you do with this information. Just be aware that AI will not create value overnight but that it will slowly revolutionize every facet of the economy creating value worth many times it’s initial investment. Also, one last thing I will say about this subject. When you add quantum computing to this equation the value created by this trade will dwarf anything that was seen during the development of the internet. The internet is the vehicle, but AI is the value. Enough said.

Now lets briefly talk about the 0ther issue affecting our market right now and that is interest rates. Prior to the FED meeting that occurred during the last week in October, the market had priced in approximately a 90% chance that the FED will reduce interest rates by another quarter of a point in December. However, Fed chairman Powell  indicated in his post meeting statement that there was very little chance that the  Fed would reduce rates again in 2025. Market players were like, what???  So ever since then the market has been in a wait and see mode with the current expectations of a rate decrease now at less than 40%. This issue is definitely creating a strong head wind for a market that other wise could be rallying into the new year. We will see what the December Fed meeting brings, but be aware of one thing. There could possibly be a selloff. We just don’t know for sure at this time. There is a path ahead for a rally but it seems to get narrower by the day. I’m not saying you should sell now. I am cautiously optimistic that we will have a nice finish to the year, but what I am saying is that just because it’s seasonally one of the best times for the market of the year, don’t take it for granted that things will be alright. Don’t ignore your charts. It is possible that this could be one of those rare times that y0u have to sell in December. So be prepared for all contingencies!!! Don’t forget too to keep praying for God to guide our hand. That is the most important thing you could possibly do…..ever.

Trading so far today has yielded the following results: Our TSP allotment is trading slightly higher at +0.05%. For comparison, the Dow is off -0.03%, the Nasdaq is higher at +0.03%, and the S&P is slightly in the green at +0.03%. I’ll take it. No loss is a good thing. Thank God for that!

Stocks waver to start the week; Alphabet rises on Berkshire stake: Live updates

Last weeks action generated the following signals: C-Hold, S-Sell, I-Hold, F-Sell. We are currently invested at 100/C. Our allocation is now +16.51% for the year not including the days results. Here are the latest posted results:

More Prices & Returns

God bless, Scott 

***Just a reminder that you can review the performance of our allocation at the Web Site TSPTALK.com in the autotracker section under the screen name KyFan1.

I produce and publish this blog as both a ministry and for the benefit of any Federal Government Employee. This is done to offer you some guidance as to how to approach your retirement more financially successful. When it is time for you to retire, I recommend you utilize the services of a Professional Money Manager, who works with a reputable investment firm. He understands the guidance you have already received and he can manage your savings assets utilizing a more advanced investment program into the future.

If you would like to receive more information about this introduction, please feel free to contact me at  KyFan1@aol.com.