The great rebalancing is unfolding as we expected with the S&P 500 struggling while other global markets are gaining traction. The performance gap between U.S. and international equities so far this year is the largest since 2017.

With that in mind, today we add a new recommendation outside U.S. borders - albeit a company whose bread and butter is the U.S. market. It’s the best of both worlds.

Details inside.

I am in Singapore this week as U.S. markets and Explorer recommendations struggle a bit.

I had a chance to visit three Luckin Coffee shops in Singapore. Hard to draw conclusions from this small sample but all three seemed very professional and fully automated with no cash accepted resulting in no lines at all. Spoke with maybe a dozen customers who like the ease of use, variety of flavors, and the price. Several said they also go to Starbucks. One only needs to download the Luckin app to get service which locks in customers to receiving a stream of deals and incentives.

Centrus Energy (LEU) shares rocketed 40% this past week and have surged 78% so far in 2025 while newcomer American Superconductor’s (AMSC) shares jumped 18% this week.

You may also have noticed that our BYD (BYDDY) recommendation is already up 24% in 2025 and has increased about 80% over the last year. This highlights an important trend in China that is unlikely to reverse.

In China, a consumer preference for multinational brands from everyday items like coffee to luxury markets was clear for decades, boosting the sales and value of companies like LVMH (LVMUY) and Starbucks (SBUX). Since the pandemic, however, preferences have shifted. Which brings us to today’s new recommendation.

“More investment does not necessarily lead to more innovation.”

“When doing something, experienced people will tell you without hesitation that you should do it this way, but inexperienced people will have to repeatedly explore and think seriously about how to do it, and then find a solution that suits the current actual situation.”

—Liang Wenfeng, founder of the company that created DeepSeek

In theory, and often as we prefer, in practice, corporate profits drive stock prices.

J.P. Morgan’s (JPM) booming profits are a testament to this, but what’s behind the profits?

It seems that recently, and perhaps even more in 2025, macro issues will drive the direction of markets and sector trends.

Identifying trends and allocating money to the right sectors and picking the leaders in these sectors is increasingly important. Those that follow the Fed and try to predict the direction of interest rates are one example of this macro-oriented strategy.

Happy New Year to everyone and wishing you all the best investing in 2025.

Let’s keep in mind this year the merit in legendary global investor Sir John Templeton’s sage advice:

“Diversify. In stocks and bonds, as in much else, there is safety in numbers.”

With this in mind, I see four big trends out there that offer us the opportunity to take a contrarian approach to make some money and lower risk.

As we head into the end of the year, markets have paused though are still bullish. A little bit of worry is a sign of a healthy market and some of the pullback is no doubt taking profits for tax reasons.

The budget showdown in Washington, which needs to be settled by Saturday, is not helpful.

The Federal Reserve cut interest rates by a quarter point yesterday and in a preemptive move, suggested only two more reductions next year. This is a signal that interest rates will remain somewhat elevated as inflation that has come down significantly remains a stubborn trend.

This was a good week for Explorer stocks, and as we head into the end of the year, Sea Limited (SE) is so far up 190%, IBM (IBM) is up 48% and Dutch Bros (BROS) was up 62% in November alone.

Tariffs are topic one in Washington and the financial media. Markets don’t know how everything will work out. Mexico is America’s largest trading partner, followed by Canada and then China. America still imports 4 million barrels of crude oil a day from Canada, which is also a key partner on the critical minerals front. More than half of America’s imports of fruits and vegetables come from Mexico. Automakers, which have built factories in Mexico to produce vehicles for the American market, are at risk and their stocks are falling at the wrong time.

But there’s one huge (non-Tesla) exception, which we will add to the Explorer portfolio today.

Europe’s stock market has underperformed the U.S. by the most in almost three decades.

While the S&P 500 index is up about 25% so far this year to record highs, Europe’s benchmark Stoxx 600 is only up 5%. That underperformance in returns is the biggest since 1995, according to Bloomberg. The other side of the coin is that the S&P 500 is now trading at 22.5 times forward earnings and is at a record high 70% premium to the Stoxx 600. The European Union (EU) bloc is the world’s third-largest economy, with a market of 450 million consumers, and controls the world’s second-most-used currency, the euro.

So today, we go to Europe (literally!) to add a new stock to the Explorer portfolio that looks poised to outperform.

A broad-based Republican victory in the election is spurring a sharp rally on Wall Street as investors bank on investor-friendly policies.


Bitcoin, the U.S. dollar, and gold also rose. It was reported that the gold reserves of Italy and France have risen in value by about $100 billion in the last two years. It is unusual historically for gold and the U.S. dollar to rise in tandem. Gold’s steady rise is also unusual given that traders would normally take profits along the way. U.S. economic sanctions have encouraged many to move into gold beyond the long reach of the U.S. government.



It is amazing how much money is being spent on politics. More than 11,000 political groups spent almost $15 billion to influence the election. Of course, this amount seems small weighed against a global economy of about $100 trillion, with the U.S. accounting for about $23 trillion (and about 35% of global debt).



It will be very interesting who gets the top economic policy posts and the GOP strategy going forward.

As I mentioned recently, I’m now in Europe looking for intelligence and ideas.

This week I’m in Madrid and visited the stock exchange (bourse) and met with some local brokers to try to get a feel for the market and region. Like brokers always are, they were bullish on stocks and especially gold. One stock we discussed which I have followed from time to time is Banco Santander (SAN). It is in a nice uptrend and still well below book value, but I need to do some research and reach out to some friends who previously worked for Santander to get their views before considering a recommendation.

Instead, today I have a new gold stock recommendation.

JPMorgan (JPM) is due to report results Friday, kicking off bank earnings season. Lately, the market seems to be more focused on earnings than Fed interest rates, and this is a good thing.

As markets move towards the “Great Rebalance”, looking to diversify portfolios with different asset classes and international stocks, the Explorer and I are headed to Europe, Asia, and Latin America during the next year. But today, stick to the U.S. and add a very familiar face to the portfolio.

Before we get to an update on my journey through Asia, let me offer a few thoughts regarding recent market weakness and volatility, driven by rising economic and political uncertainty. Sea Limited (SE) bucked the trend with another strong quarter while American Superconductor (AMSC) shares had another tough week after a great run, down 15.8%.

The tariff on-and-off news is creating some turbulence as are the pivotal Congressional spending and tax negotiations.

This week I’m in Cebu, Philippines. While in a shopping mall I spent a couple of hours analyzing a fascinating situation whereby Samsung, Apple and Huawei stores were right next to each other.

I’m not technically proficient enough to tell you which company and product offer the best value, but Huawei’s lower end smartphone was only $450 and seemed to offer everything anyone would need. Its high-end leader was just slightly cheaper relative to Apple’s most recent model, with all the bells and whistles. The store was very polished and in no way seemed to be of lesser quality to Apple or Samsung.

While Nvidia (NVDA) has pulled back more than 20% over the past two weeks, our conservative AI play IBM (IBM) has tacked on 40 points over the same period- hitting an all-time high early this week.

Cloudflare (NET) shares were up again this week and are now up 28% in 2025 to reach 140.

Dutch Bros (BROS) shares rose 8.5% this week and have surged 23% so far in 2025.

The Trump Administration is off and running along with Cabot Explorer stocks as markets closely watch the potential for tariffs on Canada, China, and Mexico.

Mexico and Canada are America’s two largest trade partners, and both countries are bracing for major economic disruption should Trump follow through. Mexico and Canada send about 80% of their exports to the U.S. Market turbulence in stocks based in Mexico or Canada could create an opportunity for us.

Markets were closed yesterday in honor of the late President Jimmy Carter.

No matter your politics, the service was well done and inspirational.

It was a solid opening this first week of 2025: new recommendation American Superconductor (AMSC) shares were up 10%, Centrus Energy (LEU) shares were up about 8%, Cloudflare (NET) shares were up 7.5%, and Dutch Bros (BROS) shares were up 7.3%.

It’s a busy and short Christmas week and like many of you, I was doing last-minute shopping and preparing to visit family.

Therefore, this is a brief update and instead of the usual stock-by-stock update, I can summarize as follows.

I recently noticed a few popular stocks such as MicroStrategy (MSTR) offering exposure to leveraged Bitcoin which to me seems like excessive risk and a sign of potential trouble.

This is like pouring gasoline on a roaring fire. It reminds me of a quote from Edward Chancellor’s book The Price of Time, which offered this gem:

“……as a rule, panics do not destroy capital; they merely reveal the extent to which it has previously been destroyed by [the taking on of excessive leverage in good times].”

Centrus Energy (LEU) shares jumped almost 19% this past week and are up 70% in the last six months. Dutch Bros (BROS) shares gained 6.3% this week following weekly gains of 10.6% and 36%.

Tariffs took center stage this week as the incoming Trump administration indicated day-one 25% tariffs on Canada and Mexico and some more for China as well.

The rally since the election continues as Bitcoin reached $90,000 for the first time. Tesla (TSLA) has climbed more than 40%, and the KBW Nasdaq Bank Index, which tracks shares of some of the nation’s largest lenders, is surging.

Dutch Bros (BROS) shares jumped 36% this week as it beat analysts’ expectations on the top and bottom lines while offering improved guidance for the remainder of 2024. Sea Limited (SE) soared 10.3% as the Singapore-based company reported overall net income that beat estimates at $153.3 million, with a better-than-projected 31% rise in revenue for the September quarter.

We need to begin with some bad news. Super Micro Computer (SMCI) stock tumbled 32% yesterday after its audit firm, Ernst & Young, resigned. The auditor said it had recently learned of information “which has led us to no longer be able to rely on management’s and the audit committee’s representations, and to be unwilling to be associated with the financial statements prepared by management.”

Bank stocks such as Morgan Stanley (MS) and Goldman Sachs (GS) had strong earnings while tech is starting to show signs of weakness. ASML (ASML) reported sharply lower quarterly sales and giant Samsung Electronics’ share price (listed on the Korea Exchange) has fallen almost 30% over the past six months as it struggles to catch up with SK Hynix and Micron in supplying the most advanced AI chips.

Still, everyone is waiting for Nvidia’s (NVDA) earnings as capital spending in AI remains robust.

China’s benchmark CSI 300 index has surged 25% in the five days following Beijing’s stimulus measures to unleash its economy and financial markets. This has led to some catch-up growth for Explorer stock and fund recommendations.

The action was not limited to just Chinese stocks but also stocks looking to China for growth. I mentioned commodities last week, but another winner was the luxury business.

Please sell our Recursion Pharmaceuticals (RXRX) recommendation, as after a strong start the stock has pulled back sharply.

MP Materials (MP), a rare earths mine and processor, is down about 11% this morning.

MP Materials (MP), a rare earths mine and processor, is down about 11% this morning.

Exscientia (EXAI) is down about 10% this morning.

Exscientia (EXAI) pulled back yesterday but is recovering this morning.

Based on market conditions and to limit losses, I suggest you sell the following two Explorer recommendations:

Due to escalating regulatory risk by Chinese authorities, please sell Pinduoduo stock. I will have more in this Thursday’s update but, in short, the Chinese are exerting their authority on Chinese companies that have used offshore entities to list on U.S. markets. China wants these companies to list in Hong Kong or Shanghai. There may be some trading and arbitrage opportunities developing, but the risk for Pinduoduo is now too high.

To follow up on today’s issue and new recommendation of Fisker, Inc.

Based on the below press release highlighting the agreement for Australia’s Lynas to build a rare earths refinery in Texas, I recommend you sell your MP Materials (MP) position.

Two portfolio stocks reported earnings yesterday and both remain Buys.

This portfolio stock was up 18.3% yesterday in anticipation of earnings that were released after the market closed.

Sell half your position for a 142% gain.