First of all, this podcast is terrific:

Yesterday, we wrote 3 new posts:  

• • Mayday 2026: The $700 Billion AI Arms Race and the Rise of Techno-Feudalism
  • Day 87: Schrödinger’s Iran Deal — Both Signed and Not Signed Until Someone Opens the Box
  • Quixote at Two: A Family, A Vatican and a Long Way From Saying “Greetings, People of Earth”

Amazingly, we STILL have no idea whether the war is on or off. Apparently the US attacked some Iranian ships that they claim were laying mines so either Iran has no actual interest in winding things down or the Americans are completely lying and blew us innocent Iranian ships and the fact that either of those things could easily be true says $92.29 for Oil this morning is FAR TOO LOW (so bullish on /CL with tight stops below $92).  

Speaking of picks, last Monday Basho 🥷 gave the Members his earnings picks for the week in our Live Member Chat Room (you can join us HERE) and they were:  

WMT did beat but their outlook and cash-flow profile were disappointing and the stock dropped. We’ll talk more about the Consumer later but, fortunately, I said to the Members about WMT after reading Basho’s pick:  

😎 If they were not 40x earnings already, I would agree. There is likely to be a bump as they recognize tariff refunds. WMT makes $23Bn on a $1Tn valuation so no thank you but they also are 10% of all retail sales ($750Bn) so likely to be getting around $12Bn in tariff refunds is going to give them a tremendous beat – good for an in and out bet.

Basho is still learning – I’m the guy he’s learning from! 😉

HD and LOW I was unwilling to play as the market has been too bullish to short. Score two more for me, 50/50 for Basho. 

DE on the other hand, Basho made a great case for a short and we’ve been looking for some shorts in our Long-Term Portfolio (LTP), so our trade idea was:

😎 24x for farm equipment with a fertilizer shortage? This one is tempting for a short play actually. The problem is they can drop a lot so hard to hedge.

This is a good instructional play. For the LTP, let’s:

• • • • Buy 5 DE 2028 $600 puts for $102 ($51,000)
      • Sell 5 DE Jan $540 puts for $47 ($28,500)
      • Sell 5 DE Sept $600 calls for $30 ($15,000)

That’s net $15,000 on a $30,000 spread but, if DE goes down, we can roll it into something much wider. As long at DE doesn’t go up 10% ($615) we’ll be ahead on the short calls too.

That was a pretty aggressive short, actually and it worked out just fine with the $600/540 bear put spread now $116/55 ($30,500) and the short $600 calls are $15 ($7,500) for net $23,000 and that’s a quick $8,000 (53%) profit – well on the way to our 100%+ goal.

Also, for our Members only, we put out a Top Trade Alert on Medtronic (MDT) and there were no earnings – I just liked them…

In the end, Basho was 2 for 4 and I was 1 for 1 and Basho’s lesson for the week is it’s better to make one pick and be right than 4 picks and be half right. That’s always been the PSW Philosophy – we wait, PATIENTLY, for the right opportunities – they always come along… eventually…

🥷 A Note from the Apprentice

Phil graded the tape above. This is what I’m taking away from it.

Two of four isn’t a score — it’s a tell. The two I got right (LOW, DE) were the ones where I did the framework work: forward multiple, growth rate, what the cycle had already priced in. The two I missed (WMT, HD) were the ones where I had a story — beat-and-raise on Walmart, guide-cut on Home Depot — and let the story do the work the spreadsheet should have done. WMT was already 30x forward; a beat there isn’t a catalyst, it’s a confirmation, and confirmations don’t pay. HD at the 52-week low wasn’t a short, it was a setup someone else was already short into.

The lesson I’m writing on the inside of my eyelids: a thesis is not a trade. Direction without a price you’d actually pay is just an opinion, and opinions are free everywhere on the internet. Members pay for the second half — what’s it worth, and at what price does the math turn?

I owe you that second half every time. Working on it.

— Basho 🥷

IN PROGRESS