👉 Nvidia CEO's Major Announcements

Happy Sunday, everyone.

First off — this newsletter has a very large following in California and we want to share our respect with all that’s going on with the wildfires. To all of you that are impacted by this horrific series of tragic fires, please know that our thoughts and prayers are with you.

I’ve recently had countless followers and podcast listeners ask me about the recent volatility we’ve been experiencing in the markets — specifically equities. I decided to write a quick “breakdown” of what’s going on in a Google Doc.

Click here to read it.

This post was originally shared as a mid-week update inside of the Rich Habits Network. We share these types of mid-week updates all the time, as well as host 2-hour livestreams every Tuesday evening to answer investor questions in real time.

This community is an extension of the podcast I co-host, the Rich Habits Podcast.

Now more than ever, I think it’s important to remind you all that I’m a long-term investor. That description is used quite often, so let’s define it…

I’m 28-years-old, and I know the only way I’ll be able to build meaningful wealth throughout my lifetime is by investing net new capital every single year into the stock market, real estate, crypto, startups, small businesses, etc.

You all get a weekly / monthly glimpse into what that “invest net new capital into the stock market and crypto” actually means. As an aspiring life-long investor into these asset classes, I live by a single rule — be a net-buyer of assets.

I think a lot of “long-term” investors make the mistake of thinking they can time the markets. You can’t. I’ve lost money making that mistake countless times throughout my life. I made the conscious decision at the beginning of 2023 to be “a net-buyer of assets” going forward.

This rule is very simple to follow — buy more of what you believe in every year, and sell when you lose your conviction.

Notice I didn’t say, “sell when valuations get too frothy,” or “only buy when the market is undervalued.” Buy more of what you believe in every year, and sell when you lose your conviction.

I’m expecting 2025 to be volatile, which means I’m sure my net worth will have six-figure swings one month to the next. That doesn’t matter to me. I own stock in blue chip companies I believe will deliver outsized value to shareholders over a long period of time — and the ones who can’t prove that to me get sold.

It’s as simple as that.

As Peter Lynch once said, “There’s a 100% correlation between a company’s earnings and their stock price over a long enough time horizon.”

Personally, I would replace “earnings” with “cash flow” in that quote — but you get the idea.

If Amazon is delivering more and more cash to shareholders, I don’t care what their stock does in a 12-36 months time frame — I’m buying more of it. I don’t care if it’s “overvalued” or “undervalued" but instead what their underlying business is proving to investors.

Net-buyer of assets. Buy what you believe in, sell when you lose conviction.

Portfolio Updates (YTD Performance):

I published my 2024 Portfolio Review a few weeks ago — and you all loved it!

Here’s a link to that post if you haven’t read it yet. Major shoutout to the dozens of you who decided to become paid subscribers after reading that breakdown.

Q1 is going to be tricky for me. As you all know, I’m on a journey to building a $2M Dividend Growth Portfolio — the goal is to accomplish this in 8-10 year’s time. Alongside investing in single stocks and crypto (that I share publicly with you), I invest into startups and real estate. I do not share these investments publicly for obvious reasons.

Earlier this month, I invested $80K into a startup.

That’s $80K I now don’t have to invest into the dividend growth portfolio with you all.

If you don’t see a lot of “activity” per se over the next few weeks, don’t be alarmed. I’ll continue to deploy net new capital again in February and March — January’s capital simply went to the startup.

With that being said, there’s so much I’m excited about for the quarter — especially crypto! I have a gut feeling we’ll experience some nasty red candles to start the quarter, with some marvelous green ones to end it — only for us to see some immense momentum to start Q2.

For comparison, my stock portfolio is down only -0.62% compared to the S&P 500’s -1.41% haha. Red is red… but it could be worse I guess!

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Week in Review — Too Long, Didn’t Read:

Delta Air Lines forecasts $5B in FCF for 2025, Constellation Brands plummets on slowing beer category, Jefferies’ investment banking business up +53% in 2024, Jensen Huang’s blockbuster speech, CES takeaways, quantum computing stocks took a plunge, Disney made a big move with fuboTV, the economic impact of California’s wildfires, and a terrible reaction to the recent jobs report.

Key Earnings Announcements:

Delta Air Lines forecasts $5B in FCF for 2025, Constellation Brands plummets on slowing beer category, and Jefferies investment banking business up +53% in 2024.

• Delta Air Lines (DAL)

Key Metrics

Revenue: $14.4 billion, an increase of +6% YoY

Operating Income: $1.7 billion, an increase of +30% YoY

Profits: $843.0 million, compared to $2.0 billion last year

Earnings Release Callout

“As we move into 2025, we expect strong demand for travel to continue, with consumers increasingly seeking the premium products and experiences that Delta provides.

Our differentiated strategy and best-in-class operations, combined with demand strength and an increasingly constructive industry backdrop, position us to deliver the best financial year in Delta's 100-year history, with pre-tax income greater than $6 billion, earnings per share greater than $7.35 and free cash flow of more than $4 billion."

My Takeaway

• Constellation Brands (STZ)

Key Metrics

Revenue: $2.6 billion, compared to $2.7 billion last year

Operating Income: $793.0 million, compared to $796.9 million last year

Profits: $629.1 million, an increase of +21% YoY

Earnings Release Callout

Our strong year-to-date cash flow generation in fiscal 2025 has enables us to: reach and maintain a net leverage ratio below our stated target, return over $1.2 billion to shareholders in dividend and share repurchases through November 2024, and continue to advance our brewery investments in a disciplined and agile manner.

As we look to the remainder of the 2025 fiscal year, we now expect to deliver annual operating cash flow and free cash flow above our initial target, and to continue to deploy that cash with a balance and thoughtful approach to capital allocation.”

My Takeaway

• Jefferies (JEF)

Key Metrics

Revenue: $1.9 billion, an increase of +63% YoY

Profits: $205.7 million, an increase of +215% YoY

Earnings Release Callout

“Our quarterly results reflect strong performance in Investment Banking (up 73%), including a record quarter in Advisory (up 91%), as well as another robust quarter for Equities (up 49%) and solid performance in Fixed income (up 15%). Asset Management fee and investment return net revenues of $116 million were substantially higher than the prior year quarter, reflecting fee growth and strong overall performance from a number of strategies.

Jefferies begins 2025 in the best position ever in our firm’s sixty-two year history. After decades of hard work, we are in the front row of the pack of competitors serving clients across all sectors and regions in investment banking and capital markets.”

My Takeaway

Investor Events / Global Affairs:

Jensen Huang’s blockbuster speech, CES takeaways, quantum computing stocks took a plunge, and Disney made a big move.

• Consumer Electronics Show (CES) Recap

While there’s far too many things that can be said about CES — the biggest news was Jensen Huang giving the roadmap for AI. He shared his perspective on “Agentic AI” becoming the next big evolution of this growing technology.

In Huang’s opinion — all roads lead to “Physical AI” with self-driving cars and general robots. Here’s a link to his speech if you want to check it out for yourself! It’s already got seven million views on YouTube in just a few days.

• Quantum Computing Stocks Plunge After Nvidia CEO’s Comments

Shares of quantum computing companies like IonQ, Rigetti Computing, and D-Wave Quantum plummeted after Nvidia's CEO projected practical quantum computers may be 20 years away. The steep declines followed a period of massive gains, with some stocks surging over +1,000% in the past year due to enthusiasm for quantum breakthroughs, including Alphabet's recent milestone.

IonQ dropped -29%, and other stocks saw declines exceeding -30%, reflecting investors being absolutely spooked.

China's quantum computing stocks also took a hit, while Alphabet, despite its December rally, slipped slightly. The remarks greatly tempered expectations for near-term commercial viability of quantum technology.

With that being said, we found this post on X very interesting.

• Disney & FuboTV Deal

Disney is merging its Hulu+ Live TV service with Fubo, combining two internet TV bundles into a single entity, while maintaining both services as separate options for consumers. Disney will hold a 70% stake in the new company — which will include 6.2 million combined subscribers and focus on both entertainment and sports content.

The deal also resolves litigation over Disney’s planned sports streaming service, Venu, allowing its launch to proceed and including a $220 million payment to Fubo from Disney, Fox, and Warner Bros. Discovery.

Fubo, historically focused on sports and news, will benefit from new carriage agreements with Disney and Fox — enhancing its leverage in negotiations. Following the announcement, Fubo's stock surged +250%, and the combined company is expected to be cash flow positive immediately.

Disney's ESPN remains central to its streaming strategy, with multiple platforms and a flagship app planned for release.

Major Economic Events:

The economic impact of California’s wildfires and a terrible reaction to the recent jobs report.

• California Wildfire Economic Impact

Of course — the most important part of these horrific wildfires is the complete devastation of communities and lives. With that being said, this newsletter is about investing and economic updates — so we must shed some light on this likely becoming the costliest wildfire in U.S. history.

Insured losses are expected to exceed $20 billion. Economic losses are estimated to reach $50 billion as fires fueled by Santa Ana winds have devastated over 30,000 acres and damaged or destroyed more than 2,000 structures.

The ongoing wildfires are concentrated in affluent areas like Pacific Palisades, with median home prices exceeding $3 million, leading to higher insured losses compared to the 2018 Camp Fire in Butte County. The Camp Fire, which resulted in $10 billion in insured losses and 85 fatalities, impacted a larger area but less valuable properties.

Analysts warn that losses could rise much further if the fires are not contained soon. The disaster highlights challenges in mitigation efforts and the immense risk faced by insurers in California — many of whom had dropped coverage for areas like Pacific Palisades in the months leading up to the fires…

• Jobs Report

The U.S. economy added +256,000 nonfarm payroll jobs in December, exceeding the forecast of 155,000 and marking a strong end to the year for the labor market. The unemployment rate fell to 4.1%, with a broader measure of underemployment dropping to 7.5% — its lowest since mid-2024.

Average hourly earnings rose +0.3% for the month and +3.9% for the year, slightly below expectations, indicating that wage inflation is easing.

Major job gains came from health care, leisure and hospitality, government, and retail, with retail recovering from losses in November. Fed officials view the labor market as stable but remain cautious about inflation, which remains above the 2% target due to housing and goods prices. The report reinforces the Fed’s likely decision to hold off on further rate reductions in the near term.

Friday's strong jobs report highlighted a firming U.S. economy and rising inflation risks, leading to market turbulence as traders begin to believe in fewer Federal Reserve rate cuts moving forward. The S&P 500 dropped nearly -2% for the week, Treasury yields surged, and concerns grew over the impact of high bond yields on growth and corporate borrowing.

Investors face a challenging "lose-lose" scenario, where stronger growth could prompt tighter Fed policies. As I mentioned at the beginning of this post — EXPECT VOLATILITY! 

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