Hello there.

Welcome to Wednesday. This week, we’ve got more unsolicited advice from billionaires.

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It’s so kind of them to consider us little people, but it does make you wonder…

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Billionaire investor Bill Ackman had a weekend epiphany and decided to share it with the world: some of the best companies you've ever heard of are basically on sale right now. In a late-night post on X, he told investors to stop doom-scrolling through bear market predictions and start buying quality stocks while they're discounted.

His main callouts were Fannie Mae and Freddie Mac, the government-backed mortgage giants that help people get home loans. Ackman said these two are "stupidly cheap" and have serious upside potential, like, he thinks they could 10X from here. Apparently, people listened. Both stocks exploded upward by over 50% on Monday, which is absolutely bonkers for companies this big.

Here's the deal: Fannie and Freddie have been controlled by the government since the 2008 financial crisis, which has kept their stock prices super low even though they're printing money. Fannie Mae made $14.4 billion in profit last year and helped 1.5 million families get mortgages. If the government ever lets them operate independently again (which could happen under Trump's administration), shareholders could make a killing. That's Ackman's bet, and clearly a lot of people agree with him.

The timing is kinda wild too. Markets have been getting hammered lately because of inflation worries, rising gas prices from the war with Iran, and general chaos. But Ackman sees that chaos as creating a rare opportunity to buy incredible companies at basement prices. His advice is to ignore the panic, focus on businesses with strong fundamentals, and hold on for the ride.

Gas just crossed $4 a gallon, and the travel industry is feeling every penny of it. With the Strait of Hormuz still closed and oil prices climbing, airlines and hotels are watching their profit margins evaporate in real time. The industry was supposed to post $41 billion in record profits this year. Now, it’s sink or swim.

Here are the numbers keeping airline CEOs up at night: jet fuel makes up 20-30% of operating costs, and those costs just doubled. United's CEO told ABC News that fares would need to jump 20% just to break even. Cathay Pacific slapped an $800 fuel surcharge on Sydney-to-London round-trips, which is bananas when the base fare was only around $2,000 to begin with.

Airline and hotel stocks took immediate hits. Delta, United, and American all dropped 3-5%, while Marriott and Hilton slid too since they've been building aggressively across the Middle East. Low-cost carriers are in the worst spot because their whole business model depends on price-sensitive travelers who are now staring at their gas receipts and reconsidering that spring break flight.

The ugly truth is, airlines are stuck. Raise prices too much, and people stop flying. Don't raise them enough, and you're bleeding money on every flight. Analysts are already predicting capacity cuts, which means fewer flights and even higher prices for whatever seats are left. If you're holding positions in the travel industry, don’t think you can predict the next headline. The trick is deciding which businesses can handle whatever headline comes next.

A lot can happen in a week!

Let’s take a quick look at who struck gold and who struck out since our last issue:

Exxon Mobil Corporation (XOM): +3.33%
Walmart Inc. (WMT): +2.69%
JP Morgan Chase & Co. (JPM): +0.93%
Apple Inc. (AAPL): +0.60%
Eli Lilly and Company (LLY): +0.16%

Alphabet Inc. (GOOGL): -5.83%
Broadcom Inc. (AVGO): -4.43%
Microsoft Corporation (MSFT): -3.68%
NVIDIA Corporation (NVDA): -1.23%
Amazon.com, Inc (AMZN): -0.81%

Analysis provided by ​altindex.com​.

Remember to always DYOR.

NextDecade Corporation is a prominent player in the energy sector, specifically focusing on the development of liquefied natural gas (LNG) projects. The company aims to leverage its technological expertise and strategic positioning to meet the rising global demand for cleaner energy solutions. With a particular focus on the Rio Grande LNG project, NextDecade aims to provide significant contributions to the energy transition by reducing greenhouse gas emissions through sophisticated carbon capture and storage technologies.

Current price: $7.36
Target price: $9.35

That’s all for today. Write us and let us know your thoughts on the market, the newsletter, or the weather—we’d just love to hear from you.

Till next time,
— Brandon and Blake of Invested Inc.