Monthly Market Debrief

Market Snapshot

Well, Jerome "Too Late" Powell finally cut rates. The Fed announced a quarter-point cut during their September meeting. This means the Fed's target fund rate (the floor for lending money) shifted from 4.25% to 4.00%.

This wasn't a surprise following massive job number revisions and public statements from Jerome. More importantly, we saw updated projections from the Fed on future federal funds rates.

This chart shows a dot for each member's opinion on the appropriate federal funds rate. As you can see, one dot believes the interest rate should go back up to 4.25% this year. Most dots are below the current 4.0% rate, indicating sentiment toward another cut this year.

*That one outlier wanting a 2.75% interest rate this year is SHOCKINGLY Trump's most recent appointee to the board.

In 2026 and beyond, the board sees interest rates slowly moving toward 3%. All this to say: we can expect slow rate cuts over the next three years but not a return to 0%. However, uncertainty remains extremely high with an aggressive tariff plan, increasing unemployment, and a never-ending debt crisis.

This chart summarizes the uncertainty pretty well… the green is possible outcomes. 

One thing that should remain certain? Invest consistently, invest with a purpose, and stay the course. 

Company Highlight - Oklo Inc.

Full disclosure: I bought a few shares of Oklo in late 2024. This is not investment advice or an endorsement of the stock.

Oklo is a nuclear power company focused on building "fast" reactors that can utilize nuclear "waste." While the Trump Administration talks a big game on nuclear, Oklo is well positioned to capitalize thanks to their innovation and some powerful friends... to say the least.

Oklo is developing small modular reactors (SMRs) that use heavy metals instead of water to regulate and cool reactor cores.

Enriched uranium shoots billions of neutrons wicked fast all over the place. A traditional reactor puts the core into water, which slows the neutrons down. The slower neutrons then only react with about 5% of the available fuel to make heat to make steam to make power.

A fast reactor uses liquid metals instead of water to regulate the core. The metals don't slow the neutrons down like water does. They stay zoomin', hence the name "fast" reactors. This means the faster neutrons can collide with the other 95% of enriched uranium to make heat to make steam to make power. These advanced reactors can reuse what used to be nuclear "waste."

This is a really exciting development (and it is still in development, for the record), but why am I talking about nuclear power?

If you know me outside of this newsletter, you know that I love nuclear power. It is the single best power generation method ever developed in every way: clean, safe, reliable, cheap. Regardless of your views on climate change (hoax or tomorrow’s killer), nuclear power should be the backbone of our power grid. 

If you can’t read the photo, it compares the energy density of various fuel sources. 

• Coal = ~24 megajoules / kg

• Gasoline = ~46 megajoules / kg

• Uranium = ~76,000,000 megajoules / kg

In September, Trump visited the UK. During his visit, the UK and US announced the Atlantic Partnership for Advanced Nuclear Power agreement and plans to build dozens of advanced reactors. Keir Starmer (UK Prime Minister) said our two countries were “building a golden age of nuclear power.”

Later in September, the Department of Energy selected Oklo Inc. as part of its pilot program to build advanced nuclear fuel lines. This is part of the Trump Administration's push to develop and strengthen our domestic nuclear power capabilities. I am sure it’s just coincidence that the Secretary of Energy, Chris Wright, used to be on the board of Oklo…

All of this caused Oklo’s stock to soar. While I am not complaining about the returns, Oklo has zero profit, zero operational reactors, and zero megajoules of energy created. They do have permits for land, power purchase agreements (people have already bought power they haven’t made?), and theoretical reactors… 

The AI boom that I have talked about a lot recently is sucking up all the current grid power. With expected demand exceeding supply, AI and tech companies are striking early deals with nuclear companies for future power. Oklo is well positioned to capitalize on this need especially since Sam Altman used to be the Chairman of the Board… Just like Chris Wright, he stepped down to avoid any conflicts of interest as OpenAI negotiates power purchase agreements. Like I said, powerful friends may or may not be helping Oklo…

Regardless, I’m excited to see nuclear power starting to get the recognition it deserves.

Debrief on Deck

Next Week, we will talk about franchises - Chick-fil-A, Taco Bell, Subway, and McDonald’s to name a few. What is the business model? How do you get one? Does Davante Adams have a Taco Bell in his home? Important questions - real answers.

Until then, stay the course.