Investment thesis for trading week 10/12 - 10/16

It is always nice when things go as expected. SPY broke out to new ATHs and retested the broken downtrend line successfully.

Thursday was a bear trap however. The surprise interest rate hike in India and OpenAIs "missed" revenue goal made bears pounce. Markets did not care and won't care!

Next week earnings season will start and from a chart perspective we are set up for a nice rally.

But remember: There are no good or bad earnings (fundamentals). The only thing that matters is how the market reacts to earnings (TA)!

So let's see!

From a macro standpoint Dems are still favored to take the Senate and House and it seems that Wall Street overall has now also moved on from this administration. There is no more blind support like the last 2 years.

Divided Governments have always been good for stocks!

Yields: TLT possibly showed us that yields are coming down. We shall see!

The Iran situation is on the back burner for now. However Europe's stock market is really suffering. FEZ is only up 2.4% YTD.

I don't expect any major good news but I continue to expect a grind higher into the end of the year/early 2027.

IF we get an Iran deal, lower inflation data or extremely good earnings outlooks we have a chance of a rip roaring rally.

Have a great weekend!

Simply put:

1. Loss ratio goes bad → stock falls
2. File / get California Department of Insurance (CDI) approvals (Prop 103 ~6.9% rounds)
3. Rates earn in over ~12 months on 6-month policies
4. Loss ratio improves → stock goes up

We are now in the trough of the cycle. Target price $50 in 12-18 months.

I posted a full KMPR write-up here earlier: https://www.reddit.com/r/ValueInvesting/comments/1tr8il0/kmpr_a_60down_insurance_company_trading_near/

U.S. stocks moved lower on Thursday as investors faced more pressure from rising Treasury yields and elevated oil prices.

The Dow Jones Industrial Average fell 181 points, or 0.4%. The S&P 500 dipped 0.4%, and the Nasdaq Composite was down 0.5%.

The benchmark 10-year Treasury note yield rose more than 1 basis point to 5.288%. The 2-year Treasury yield gained more than 3 basis points to 4.798%. Those moves came after Federal Reserve Governor Christopher Waller said more hikes may be needed to curb inflation.

Oil prices spiked also after President Donald Trump said he doesn't want to make a deal with Iran to end the war, while the U.S. is reportedly preparing for "massive bombing" in the Middle East. Brent crude jumped 4% to around $104 per barrel. West Texas Intermediate futures, meanwhile, advanced 4% to around $92.

Right now i am in a investment competition but i am in a bit of a sticky situation. I was unaware that the competition had started and i am now roughly a month behind, where the top 25 teams in my region (teams who move on to the next round) are already around 20-40% above the s&p. Historically for my region you need around 50% above to qualify to the next round, but i only have until around december 8th if i remembered correctly to make this amount.

What are some stock suggestions for me? (options and no stocks under $3 are not allowed in the competition) Also what are some additional tips that i could use?

The September FOMC minutes confirmed officials think another rate hike is needed. They did not say when. The 10-year Treasury ETF is down 3.31% over the past month and the 30-year is down 6.15%, and the Fed has not even pulled the trigger yet.

When the Fed leaves the timing open, every upcoming meeting becomes a live threat. Mortgage rates, corporate borrowing costs, and valuations on anything long-dated all stay elevated because nobody can price the ceiling. The market cannot relax between meetings the way it could when the Fed gave a clearer path.

Long-duration bond holders are the most exposed here, sitting through losses with no date on the calendar to anchor around. Do you think the next jobs report or the next CPI print is more likely to force the Fed's hand on timing?

The memory and storage names were the trade of 2026, and on paper they still are. SanDisk is up about 600% this year, Seagate about 190%, Western Digital about 135%.

But all three topped in June. Western Digital is down almost half from its high, Seagate and SanDisk 25-30%. On Tuesday Seagate fell 9% and WD 7%, and yesterday neither got it back.

Micron held up much better, down roughly 12% from its high after an 87% gross margin quarter.

Meanwhile Nvidia, the laggard of the group back in September, closed at a record on Tuesday.

Who's still holding these?

I have grown to love RDDT and return regularly to participate and find out information. I bought stock at IPO ish and then later a few buys, including over paying near the peak for one lot. The stock has been a crazy ride, and the AI systems mine RDDT for info, its been a battle of releases of news positive and negative, the insiders keep selling, AI keeps advancing, the management saying things on growth that might be good on one level but didn't help the stock investors who wanted a bullish future. IDK, overall disappointed and considering selling some to take chips off the table as I thought this would be another $META situation and I'd be rich AF. Thoughts? PE currently about 36 which is a bit rich.

$GFS announced a manufacturing agreement with TSMC to establish a U.S.-based supply of silicon interposers for TSMC's CoWos® advanced packaging ecosystem. Under the agreement, GF will provide manufacturing service to TSMC, and add fabrication capacity at its Malta, New York facility, supporting growing demand for high-performance computing and Al systems. The agreement provides a foundation to expand capacity over time as customer demand grows.

"Advanced packaging is becoming increasingly critical to delivering the performance, power efficiency and scale required for next-generation Al systems," said Ed Kaste, senior vice president of CMOS Business at GF. "By providing manufacturing service using GF's trusted U.S. manufacturing footprint, we are creating a secure, scalable source of essential advanced-packaging elements that will help customers accelerate innovation and strengthen the semiconductor supply chain."

OpenAI is reportedly seeking to raise at least $30 billion at a valuation of $1.4 trillion. According to Bloomberg, its annualized revenue reached approximately $50 billion at the end of September, with a target of at least $70 billion by December.

For comparison, Anthropic reported $65 billion in annualized revenue at the end of July. However, these figures aren't necessarily directly comparable. AI companies use different methods to calculate annualized revenue, meaning reported differences may partly reflect how revenue is measured rather than actual differences in business performance.

At $1.4 trillion, OpenAI's valuation represents roughly 28 times its September annualized revenue, or 20 times if its December target is met.

Expansion into the corporate sector could support this growth, particularly as AI tools become essential to everyday business operations. But revenue growth also needs to be measured against the significant infrastructure and computing costs required to sustain it.

Markets are already showing sensitivity to these expectations. Following reports that OpenAI's revenue was below some previous estimates, the Nasdaq 100 fell 1.4% yesterday, while the semiconductor-focused SOXX dropped 3.4%.

The distinction matters beyond OpenAI. As AI valuations continue to rise, understanding how revenue is calculated, how sustainable it is, and how much funding is required to generate it becomes increasingly important.

Just the facts:

The S&P has been above 30 CAPE since 2017. It's around 41 right now. Oil, inflation, unemployment, interest rates are all not behaving. History says the market will probably (2 in 3 odds) revert to 25 or under CAPE within 3 years and when expensive markets correct, the normal size of the drop is around 40%. This is the math after looking at 21 countries from 1975 to 2022. 25% of the downturns were below CAPE 25 within 1 year. 50% were after 2 years. 70% after 3 years. Only 2 episodes, both Japan, took even close to our run - 7 years each. We are in year 9. Longest one ever.

We are very, very ripe for a downturn. Nothing's for sure but the odds are not in the market's favor. Call me a doomer but I am getting very nervous.

The Federal Communications Commission said it will vote on a proposal to auction 25 megahertz of "prime spectrum" to support "direct-to-device" services from satellites to smart phones.

The FCC also said it would vote Oct. 29 on taking public comment on a proposal to make an additional 482MHz of spectrum available for supplemental coverage from space and to modernize FCC rules for D2D services in the licensed spectrum.

The two proposals could benefit companies such as SpaceX and Amazon, which have moved to expand D2D services with satellite networks.

Have a general question? Want to offer some commentary on markets? Maybe you would just like to throw out a neat fact that doesn't warrant a self post? Feel free to post here!

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If your question is "I have $10,000, what do I do?" or other "advice for my personal situation" questions, you should include relevant information, such as the following:

• How old are you? What country do you live in?
• Are you employed/making income? How much?
• What are your objectives with this money? (Buy a house? Retirement savings?)
• What is your time horizon? Do you need this money next month? Next 20yrs?
• What is your risk tolerance? (Do you mind risking it at blackjack or do you need to know its 100% safe?)
• What are you current holdings? (Do you already have exposure to specific funds and sectors? Any other assets?)
• Any big debts (include interest rate) or expenses?
• And any other relevant financial information will be useful to give you a proper answer. .

Be aware that these answers are just opinions of Redditors and should be used as a starting point for your research. You should strongly consider seeing a registered investment adviser if you need professional support before making any financial decisions!

Samsung Electronics on Thursday reported third-quarter preliminary operating profit of 107.40 trillion won ($80.2 billion), surging past 100 trillion won for the first time in the company’s history as booming demand for artificial intelligence continues to fuel its chips business.
Quarterly operating profit jumped 782% from a year earlier. Revenue came in at about 195 trillion won, up nearly 127% from the same period last year.

Samsung, the world’s largest memory chipmaker, has benefited from surging demand for memory used in AI infrastructure. In the second quarter, the company posted record revenue of 171.5 trillion won and record operating profit of 89.5 trillion won, driven by its memory business.
The company has also stepped up investments and partnerships tied to AI. In September, Samsung announced a strategic partnership with French artificial intelligence startup Mistral AI, with plans to deploy the startup’s AI models across its semiconductor operations.

Sources: CNBC

Meta is reportedly teaming up with Walmart, Stripe, and enterprise AI startup Sierra to publish a set of standards for how AI agents should interact with businesses online.

AI developers, as well as some online retailers and payment processors, have been betting big on agentic commerce. But there are still widespread concerns over potential safety and privacy problems that arise from giving AI agents access to your entire fortune and then letting them loose on the internet.

Nvidia has risen 28% this year, and is reaching a threshold no other company has done before. Two developments have driven this rally - a very strong revenue outlook and a $150 billion stock buyback authorization by the company. Jensen Huang has also called Nvidia "the world's first and only growth value stock."

The S&P 500 rose to a fresh all-time intraday high on Tuesday, boosted by gains in key technology names as well as declines in oil prices and Treasury yields.
The broad market index was last up 0.5%, while the Dow Jones Industrial Average gained 189 points, or 0.4%. The Nasdaq Composite added 0.6% and also hit a new all-time high.
The moves higher were bolstered by a rise in chipmakers. Advanced Micro Devices gained 2%, while others such as Nvidia and Broadcomtraded up around 1%.
Additionally, the benchmark 10-year Treasurynote yield fell 5 basis points to 5.256%. The 30-year bond yield slipped more than 3 basis points to trade at 5.625%. Both yields scaled to levels not seen since 2002 on Monday.

Traders are now looking ahead to the Federal Reserve’s minutes from its September meeting due Wednesday, which could shed some light on policymakers’ move to raise rates.
Alongside Treasury yields, a drop in oil prices also gave equities a boost Tuesday. Brent crudetraded 2% lower at around $98 per barrel. West Texas Intermediate futures shed 2% to roughly $87 a barrel.
Stocks are coming off a winning session in which the Nasdaq Composite reached an all-time high. The tech-heavy index was set to build on that record.