Fri, Nov 21, 2025|Whitney Tilson

I still remain 'constructive' after the latest jobs reports; The Fed will likely cut rates again; I still like the stocks of Nvidia and Alphabet; Continue to avoid Strategy; Wall Street Journal video on an elaborate phishing scheme out of China

1) Yesterday, the Labor Department finally released its long-delayed September jobs report, unemployment figures, and weekly jobless claims...

Overall, there we no huge surprises.

The increase of 119,000 jobs was above expectations of 50,000. But July and August numbers were revised downward by 33,000 jobs.

Here's a chart with the data by month for the past four years – it's from this cover story in today's Wall Street Journal:

On the other hand, the unemployment rate rose slightly to 4.4%. That's the highest level in four years, as this next chart from the WSJ article shows:

But as the article notes, "the number of long-term unemployed who have been without a job for 27 weeks or more decreased to 1.8 million from 1.9 million the prior month."

Yesterday's news reinforces my view that the economy is slowing down modestly, but remains strong.

As evidence, look no further than corporate earnings. Here's more from the WSJ:

Big publicly traded companies have reported strong profit growth for the third quarter, with per-share earnings up nearly 17% from the same quarter last year for the S&P 500 – the second-best showing in at least two years, according to data from LSEG.

Companies also posted strong sales growth, of about 8% overall.

A strong economy and even stronger corporate earnings bode well for the stock market.

The main wildcard is what the Federal Reserve will do at its next meeting on December 10 to December 11.

As the WSJ article notes:

The latest data will likely do little to resolve the debate at the Fed, where some policymakers, wary of inflation, want to leave rates on hold, while others are pushing for a rate cut in December as insurance against a labor-market deterioration.

Hawks can point to the bump up in job growth as a reason to postpone any further easing, while doves can focus on rise in the unemployment rate, as well as the general trend toward weaker job growth, as reasons to cut. Thursday's report was the last official snapshot the Fed will see before the next rate-setting meeting in December.

As recently as three weeks ago, investors were almost certain that the Fed would cut rates by another 0.25%. But now, they're not so sure...

As of around noon today, real-money bettors on Polymarket think the odds of that cut are down to around 60%.

I think the Fed will cut. And that would give stocks another boost, both because of the weakening labor market and because of pressure from President Donald Trump.

In summary, I remain constructive on the markets overall...

As I've said previously, if you own good stocks or funds, sit tight... but have modest expectations.

2) However, if you got overly sucked into the AI mania and have been taking a big beating, it's not too late to get out...

To be clear, I don't think Nvidia's (NVDA) stock is in bubble territory. As I explained in yesterday's e-mail, I wouldn't go out and buy it today. But if you own it and have big gains, I would let it run.

As this new Heard on the Street article in the WSJ notes, Nvidia is only trading at about 26 times next year's earnings estimates. Take a look at this chart from the article:

I think this analyst quoted in the article is correct:

"There are certainly pockets of the AI space where valuations needed to take a breather, but Nvidia is not in that camp," Matt Britzman of Hargreaves Lansdown wrote after [Nvidia's earnings report] Wednesday.

But I think the biggest long-term AI winner will be Alphabet (GOOGL), for reasons I outlined in yesterday's e-mail.

3) Meanwhile, the crypto mania is imploding...

Longtime readers know how skeptical I am of cryptos. The space is full of rampant speculation. And it unfortunately has also been an accelerant for fraud and funding of terrorism.

This new article on bitcoin in the WSJ questions when new buyers will rush back in:

It's hard to say. Without yield or earnings, there's no such thing as cheap or expensive. The only support is a psychological foible called the anchoring effect – eyeing where bitcoin traded recently and imagining a return to that price.

The article also warns about Strategy (MSTR), which "owns about 3% of total supply [of bitcoin], worth $57 billion":

Now that Strategy's stock is down by two-thirds in the past year – far more than bitcoin itself – it will struggle to economically turn a dollar of newly issued shares into a greater value of bitcoin.

Take a look at this chart from the WSJ article:

For more on this, here are two other related WSJ articles:

I warned my readers about MSTR in my January 28 e-mail, when the stock was at $335.93 per share. As I said:

Longtime readers know that I'm wary of cryptocurrencies. And I'm particularly wary of any stock or fund in which you're paying $2 for $1 worth of the cryptocurrency...

That makes no sense.

But that's what you're doing when you buy [MSTR] – it's effectively nothing more than a bitcoin holding vehicle that has a market cap of about $86 billion as of yesterday's close, despite recently only holding around $47 billion worth of bitcoin...

Avoid [the stock] at all costs.

I also reiterated my warning on June 17, when MSTR shares were at $375.18.

In the five months since then, the stock has lost more than half of its value.

But don't be tempted to bottom-fish here...

I would never short MSTR for the same reason I wouldn't short bitcoin – with no real-world anchor, the price could go anywhere.

But its underlying business of selling $2 of stock for every dollar of underlying bitcoin is broken (I suspect permanently). So it's not even an interesting speculation.

4) Speaking of avoiding scams...

Here's a five-minute WSJ video on How Chinese Criminals Steal Your Credit Card With Just One Text. Summary:

Federal investigators say that crime groups in China are behind the toll fine scam messages that made more than $1 billion over the last three years. The elaborate phishing scheme uses fake texts, a one-time verification code and remote tap-to-pay software to steal your credit card information to buy everything from iPhones to luxury handbags and gift cards.

WSJ worked with a cyber threat researcher and created a fake phishing page to show exactly how it works.

And for navigation in the video, here are some timestamps:

0:00 Fake toll texts
0:27 Background on the Chinese scam
1:04 The fake phishing page
1:53 How thieves use the scam to steal billions
3:18 Remote tap-to-pay trick

Be careful out there!

Best regards,

Whitney

P.S. I welcome your feedback – send me an e-mail by clicking here.