RJ Hamster
🦉 The Night Owl Newsletter for March 3rd
Unsubscribe Have $500? Invest in Elon’s AI Masterplan (From Brownstone Research)REalloys Could Be the Missing Link in America’s Rare Earth Defense GapWritten by Bridget BennettThe latest round of geopolitical tension has defense stocks bouncing higher. But the rally isn’t limited to weapons makers—it’s also drawing fresh attention to the critical rare-earth materials that those defense systems can’t function without.In a recent MarketBeat conversation, Tim Johnston of REalloys Inc. (NASDAQ: ALOY), laid out why the company believes the next chapter for rare-earths in North America won’t be defined by who finds the minerals in the ground, but by who can actually refine, metallize, and deliver them to the defense contractors that need them now.REalloys recently traded in the high-teens range after debuting on the NASDAQ in late February through a reverse merger with Blackboxstocks. The stock saw significant volatility in its first days of trading, reaching a high near $19.75 before pulling back.Why Heavy Rare-Earths Are the Real Defense BottleneckMost investors hear “rare-earths” and think of a single commodity. The reality is more nuanced. Rare-earth elements split into two categories—lights and heavies—and the distinction matters enormously for defense.Light rare-earths go into everyday permanent magnets for home appliances and standard electric vehicles. Heavy rare-earths are the high-performance enablers: the materials that allow magnets to function in extreme temperatures inside fighter jets, submarines, drones, and advanced robotics.”Without these components, you simply can’t make those instruments perform the way you want them to perform,” Johnston said, pointing to high-performance magnets as the linchpin. “Particularly when we’re talking about drones and robotics—they’re critically important to actually making those things work in the first place.”China’s Grip: The Supply Chain Vulnerability Driving U.S. InvestmentThe geopolitical math is straightforward. China currently controls roughly 90% of all rare-earth refining and, until very recently, handled 100% of global heavy rare-earth metallization. About 70% of raw mining also originates from Chinese sources.Johnston framed the risk in blunt terms: “You take that away, China shuts down supply, and then all of a sudden you can’t build those things that you need for defense technology and really important infrastructure.”That vulnerability is why the U.S. government has announced tens of billions of dollars in investment across programs designed to build a North American allied supply chain. In Johnston’s telling, the industry is roughly 30 years behind China—and the catch-up is happening across mining, refining, separation, and magnet manufacturing simultaneously.How REalloys Is Assembling Its Supply Chain—Without Starting From ScratchAsked about what sets REalloys apart from the growing field of developing rare-earth companies, Johnston pointed to speed-to-market. Rather than pursuing a years-long greenfield mining buildout, the company has assembled existing assets and partnerships designed to deliver product fast.The first piece is a five-year offtake agreement with the Saskatchewan Research Council, which operates a commercial-scale rare-earth processing facility in Saskatoon, Canada. For the first five years, feedstock will come from Brazil, South Africa, and North American sources, all refined in Canada.The second piece is the acquisition of PMT Critical Metals in Euclid, Ohio—a 54,000-square-foot facility with more than two decades of experience producing specialty metals for the Defense Logistics Agency, the Department of Energy, the Department of Defense, and NASA. This is where the final metallization step and eventual magnet production will happen.Johnston described the ability to be “coming to the market with product by the end of this year” as a “huge milestone” and a key differentiator from peers still years away from production.The 2027 Deadline: A Regulatory Catalyst With Real TeethThe timeline matters because of a hard legislative requirement under 10 U.S.C. §4872. Starting Jan. 1, 2027, defense contractors must certify that their entire rare-earth supply chain—from mining through metallization—is free of materials sourced from China, Russia, Iran, or North Korea.Johnston put it directly: short of a presidential authorization waiver, REalloys will be “the primary producer of heavy rare-earth in North America” capable of meeting that standard. That’s management commentary rather than an independently confirmed assessment, but the competitive landscape for heavy rare-earth metallization outside China is genuinely thin.A Concrete Win: New DLA Contract for Samarium and GadoliniumOne of the most actionable developments this week centered on a new DLA contract awarded to REalloys’ subsidiary Terves LLC, worth up to $1.7 million. The contract funds the engineering design for a 300-ton-per-year modular production facility for samarium and gadolinium—two heavy rare-earth metals critical to defense magnet applications.The structure matters. This isn’t a simple metals delivery agreement; it’s a process development and facility design contract that could lay the groundwork for significantly larger production commitments. REalloys also filed a provisional patent covering a zero-waste metallization process it claims could cut production costs by up to 50%.The Board Signals Defense CredibilityREalloys has assembled a board designed to project seriousness in defense circles. Stephen duMont, President of GM Defense, serves as non-executive chairman. Retired four-star General Jack Keane—a longtime adviser to multiple presidential administrations who received the Presidential Medal of Freedom in 2020—joined as a director ahead of the NASDAQ listing.The Investor Question: Can REalloys Execute Before the Clock Runs Out?REalloys is a reminder of how quickly a policy catalyst can reshape a sector—especially when national security urgency collides with a supply chain that barely exists outside of one country.But Johnston’s argument was that the window is just opening. “This is a massively growing sector,” he said. “The demand for these materials is growing exponentially, particularly when you factor in the need to diversify away from a Chinese-dominated industry.”Whether that plays out cleanly will depend on execution—meeting the end-of-year production target, scaling the Ohio and Saskatchewan operations, and converting engineering contracts into full-scale supply agreements.Still, the combination of a hard regulatory deadline, genuine scarcity outside China, and early contract wins with defense agencies helps explain why this newly public company is drawing attention in a crowded rare-earth field. The risk is that timelines slip. The upside is that very few companies are even close to delivering what the U.S. defense sector will legally require in less than a year. READ THIS STORY ONLINESilver $309? (Ad)Silver: 20% + 68%Tim Plaehn just found a Silver ETF that delivers monthly income (up to 20% in annual distributions) plus share appreciation (68% in 5 months). The precious metal has become one of the best investments for growth AND income right now.CLICK HERE AND START TO COLLECT IN THE NEXT 30 DAYS.How Berkshire Hathaway Performed During Buffett’s Final QuarterWritten by Jordan ChusslerMore than 60 years after taking a controlling interest in Berkshire Hathaway (NYSE: BRK.B), former CEO Warren Buffett stepped away from his role with the firm he turned into a multinational conglomerate on the final day of 2025. On Saturday, Feb. 28, the holding company reported full-year and Q4 2025 earnings, marking the final fiscal year and quarter with the Oracle of Omaha at the helm. And although it was new Berkshire CEO Greg Abel who penned his first annual letter to shareholders, the results the company announced over the weekend were the last to bear the fingerprints of his predecessor and mentor. Here’s how Berkshire performed in 2025 and in its final quarter, and what investors can expect going forward under the leadership of its new chief executive.Berkshire’s Final Quarter Under BuffettOn the surface, Berkshire’s last quarter under the direction of Buffett was not the going-away party the market envisioned. Insurance investment income fell by nearly 25%, earnings from operations were down more than 29%, and most notably, insurance underwriting profits fell by approximately 54%. But the company—which through its subsidiaries engages in industries ranging from insurance and freight rail transportation to global utilities—attributed the lower earnings to $4.5 billion in impairments and write-downs, including those related to Kraft Heinz (NASDAQ: KHC) and Occidental Petroleum (NYSE: OXY)—the former of which newly entrenched CEO Abel has exited entirely in Q1 2026. Overall, earnings per share (EPS) of $4.73 missed analyst expectations by 44 cents, with revenue of $94.23 billion beating analyst expectations of $92.91 billion.Full-year operating profit fell 6% to $44.49 billion, while net income for the year dropped 25% to $66.97 billion.Still, the company has maintained a near-record cash reserve of $373.3 billion—down from a record $381.6 billion in Q3—which positions Abel to make major acquisitions and bolster the portfolio going forward. Buffett left the portfolio in excellent shape, thanks in part to his final moves in his final quarter. Since taking the reins in 1965, Buffett has led Berkshire to average annual gains of 19.7%, nearly double the S&P 500’s compounded gains over the same period. During the same time, Berkshire’s gains exceeded 6,099,294%, while the S&P 500 gained 46,061%, with reinvested dividends, as Abel noted in his inaugural letter to shareholders. Buffett’s Concluding Portfolio Moves for BerkshireAccording to the company’s more recently published Form 13F filing, which reflects the securities Berkshire bought, sold, and held in Q4, Buffett was certainly not resting on his laurels before riding off into a retirement replete with Diet Coke and table tennis. Unsurprisingly, Magnificent Seven member Apple (NASDAQ: AAPL) remains Berkshire’s largest holding at nearly 228 million shares. But perhaps less expected was Buffett’s top buy in Q4. The company’s position in the global property and casualty insurance company Chubb (NYSE: CB) was increased by 0.59%, and shares of CB have gained nearly 10% year-to-date (YTD). Buffett also expanded Berkshire’s position in oil major Chevron (NYSE: CVX) by 0.15%—a move which has since proven prescient with the energy sector dominating the S&P 500 this year, with a more than 23% gain. For context, materials have posted the second-best performance among all 11 sectors with a gain of nearly 17%, while tech has lost more than 2% so far in 2026. For its part, Chevron is up nearly 20% YTD. Media company The New York Times (NYSE: NYT) saw the third-largest position increase for Berkshire, as the company expanded its shares of the newspaper publisher by 0.13%. The stock is up more than 14% YTD, leaving Buffett’s three biggest Q4 buys with an average gain of 14.66% through the first two months of the year. Meanwhile, the firm made notable reductions in numerous positions, the three most prominent of which were Amazon (NASDAQ: AMZN) by 77%, Bank of America (NYSE: BAC) by almost 9%, and DaVita (NYSE: DVA)—a leading provider of kidney care services that specializes in the management and operation of outpatient dialysis centers. His timing could not have been better. Amazon’s struggles—which have been well-publicized—have continued in 2026, with the stock having lost more than 7%. Bank of America has been wrapped up in the broad struggles of the financials sector, whose 4.14% YTD is the worst among all S&P 500 sectors. Shares of BAC have tumbled nearly 11% YTD. The Q4 reduction in DaVita may look like a misstep, as shares of the healthcare company are up more than 36% YTD. However, Buffett sold the shares back to DaVita as part of a scheduled share repurchase agreement, so the sale was non-discretionary. When all was said and done, Buffett exited Berkshire with its top five portfolio holdings being: Apple: 22.6%American Express (NYSE: AXP): 20.46%Bank of America: 10.38%Coca-Cola (NYSE: KO): 10.2%Chevron: 7.24% READ THIS STORY ONLINEHave $500? Invest in Elon’s AI Masterplan (Ad)What if you could claim a stake in what’s set to be the biggest IPO ever… starting with just $500? Everyone is talking about Elon Musk’s SpaceX IPO.CLICK HERE TO GET THE DETAILS AND I’LL SHOW YOU HOW TO CLAIM YOUR STAKE…Amazon’s Drop Was Loud, But Its Rebound Could Be LouderWritten by Sam QuirkeAfter starting the year reasonably well, tech titan Amazon.com Inc (NASDAQ: AMZN) has been under pressure since. Its shares tumbled more than 20% into mid-February and were still roughly 18% belowtheir 2026 high in early March. The move lower was not only sharp but also sustained, with the bulls, unusually for Amazon, barely putting up a fight. Beneath the volatility, the business itself tells a similarly complicated story. Revenue in the February earnings report rose 14% year-over-year, beating expectations, but earnings saw a rare miss. This was made worse by a 2026 capital expenditure (CapEx) forecast of roughly $200 billion, a staggering 50% increase from the prior year.Given how sensitive markets have become to balance sheet discipline, that CapEx number alone was enough to rattle confidence and trigger a swift drop. But was this truly the start of something more troubling for Amazon, or has the market overreacted to a bold investment cycle that could ultimately strengthen its dominance? Let’s jump in and take a look. Why Amazon Sold OffTo answer that question, it’s important to note that investors didn’t panic because Amazon’s core business is deteriorating—they panicked because of scale and uncertainty.The $200 billion spending plan, largely earmarked for artificial intelligence (AI) and data center initiatives, lacked a clearly defined payback timeline.Investors’ concern about this was compounded by the company’s latest free cash flow figure, which showed a more than 70% year-on-year decline, driven by 2025’s aggressive spending. Increased spending and decreased cash are a dangerous combination in the best of times, and the fear here is understandable.Amazon is going all-in on expanding AI infrastructure without offering much visibility into future returns, and shareholders are right to be spooked by how binary this feels. Big spending cycles like this can make or break a company’s trajectory for years. This is the tension investors are now wrestling with. Is this a CapEx cycle that locks in Amazon’s AI leadership for the next decade, or is it reckless overspending in an arms race?What the Market May Be MissingHowever, while the spending headlines might be getting all the attention, another figure from last month’s report deserves equal focus. Amazon’s AWS revenue grew 24% year-over-year, accelerating at its fastest pace in more than three years. AWS now accounts for more than half of Amazon’s operating income, making it the core economic engine of the company, and that has to count for something. AWS is directly tied to AI infrastructure demand. Enterprises deploying AI workloads require scalable cloud computing, storage, and processing power. Amazon’s $200 billion in forecasted CapEx is a targeted investment in the very infrastructure underpinning AWS’s growth.In addition, AWS margins have remained solid, so if AI demand continues accelerating, the return on this CapEx should be both durable and juicy. The Case for a ReboundThe price action is beginning to reflect the potential upside here. Amazon shares haven’t set a fresh low since the middle of last month, and have instead begun consolidating above the $200 level. That stabilization suggests much of the panic may already be priced in.Analyst sentiment reinforces this interpretation. Evercore and Wells Fargo both reiterated bullish stances in the past week, echoing those from New Street Research and Citigroup earlier this month. Fresh price targets range up to $304, implying nearly 50% upside from current levels—not bad for a $2.2 trillion company. Importantly, the drop in share price has pushed Amazon’s valuation to one of its lowest readings in years, which, all things considered, makes it look attractively valued. Technical ConfirmationWhile the bullish thesis rests on business fundamentals and recent price action, the stock’s technical indicators are now also confirming the shift in momentum. Amazon’s relative strength index (RSI) has turned upward from extremely oversold levels, indicating that selling pressure has likely peaked. At the same time, its moving average convergence/divergence (MACD) just logged a bullish crossover, further signaling the bulls are in control. These indicators alone won’t drive a recovery, but they often signal when sentiment has shifted. The key level to watch remains the $200 area. As long as shares hold above it and begin forming higher lows in the weeks ahead, the case for a recovery strengthens. However, a decisive break below would challenge the rebound thesis and likely mean fresh lows.Amazon’s drop was loud because the spending number was loud. If it can thread the needle between ambition and execution, its rebound could be louder. READ THIS STORY ONLINEThis makes me furious (Ad)I Called Black Monday. Now I’m Calling March 26! I predicted the 1987 crash six weeks early. I called the fall of the Berlin Wall. I pinpointed the exact bottom in 2009. Now I’m staking my reputation on March 26, 2026 – the day I believe Elon will announce the SpaceX IPO. Bloomberg is calling it “the biggest listing of ALL TIME.” A $1.5 TRILLION valuation… the “wealth-building” moment of the decade. Today, I’ll show you how to get in before the big announcement.CLICK HERE TO SEE HOW TO SECURE YOUR “SPACEX ACCESS CODE”More StoriesPalantir Stock Rises on Iran Conflict—But Here’s the Real StoryIonQ in Rebound Mode: Buy the Thesis, Respect the RiskElon Musk already made me a “wealthy man” (Ad)Is C3.ai Stock Ready to Burn the Bears?Meta and Rocket Lab Insiders Sell Shares—So Why Is Wall Street Buying?2 Bad News Buys: Why Palo Alto and Zscaler Are Screaming DealsAtomic AI: Why NuScale Is the Only OptionThe Night Owl is a financial newsletter that provides in-depth market analysis on stocks of interest to individual investors. 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