While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
October 7, 2014
Fiat Lux
Featured Trade:
(LAST CHANCE TO ATTEND THE THURSDAY OCTOBER 9 INCLINE VILLAGE, NEVADA STRATEGY LUNCHEON)
(SEPTEMBER 10 GLOBAL STRATEGY WEBINAR),
(AN UPDATE ON GILEAD SCIENCES), (GILD)
?
Gilead Sciences Inc. (GILD)
Come join me for lunch at the Mad Hedge Fund Trader?s Global Strategy Update, which I will be conducting in Incline Village, Nevada on Thursday, October, 2014. An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period.
I?ll be giving you my up to date view on stocks, bonds, currencies, commodities, precious metals, and real estate. And to keep you in suspense, I?ll be throwing a few surprises out there too. Tickets are available for $196.
As a special bonus this year, anyone who buys a ticket can bring a guest for free, provided that they are a trader or investor who may benefit from the services of the Mad Hedge Fund Trader. After you purchase your ticket, just email Nancy (support@madhedgefundtrader.com) with your guest?s name and email address so we know who is coming.
I?ll be arriving at 11:30 and leaving late in case anyone wants to have a one on one discussion, or just sit around and chew the fat about the financial markets.
The lunch will be held at the premier restaurant in Incline Village, Nevada on the sparkling shores of Lake Tahoe. The precise location will be emailed with your purchase confirmation.
I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my?online store.
I spoke to a friend of mine the other day who works for a health care venture capital firm, and I thought I?d pass through a few tidbits.
Gilead Sciences (GILD) is basking in the glow of the most profitable drug launch in history. Its blockbuster Sofobuvir treatment for hepatitis C, launched in 2013, inhibits the RNA polymerase that the hepatitis C virus (HCV) uses to replicate its RNA. In traders? parlance, it kills the bug.
(GILD) has taken in $5.7 billion in sales of Sofobuvir during the first half of 2014, and could sell as much as $10-$12 billion for the full year.
The drug is so revolutionary, that it on the scale of medical miracles of decades past, such as Salk vaccine immunizations for polio and penicillin treatments for bacterial infections. So far, Sofobuvir has cured a breathtaking 90% of patients.
Now the company is using various drug combinations that produce even higher success rates with fewer side effects, and may be expended to treat other life threatening diseases. These could take Sofobuvir sales as high as $15-$18 billion in 2015.
A big controversy regarding Sofobuvir has been its immense cost, which works out to $84,000-$135,000 per patient. This has become a bigger issue with the advent of Obamacare, now that the government is picking up much of the tab.
But, that?s a bargain compared to full treatment of the disease, which can run as high as $350,000 per patient. That is, unless you don?t care if you die.
Partly in response to these complaints, the company is making the drug available at deep discounts in 91 emerging nations that account for 50% of all Hepatitis C cases globally. What it loses on margins there it will make back in volume.
With any luck, we may see hepatitis C wiped out in my lifetime, as I have already seen with smallpox (I saw some of the last few live cases in kids in Nepal in 1976).
All of this makes the stock appear a bargain at its current $106 price. At a multiple of a subterranean 12X earnings, the stock should hit $140 next year.
You all know that health care is one of my three core industries to bet on for the long term (there others are energy and technology).
The short-term driver of the share price for (GILD) is obviously whether the health care sector is in, or out of vogue. But for the long term Gilead looks like a good bet to me. And I don?t even have hepatitis.
For more depth on the company, please refer to my earlier piece, Keep Gilead Sciences on Your Radar, by clicking here.
The Formula for Immense ProfitsWhile the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
October 6, 2014
Fiat Lux
Featured Trade:
(THE CORRECTION IS OVER),
(SPY), (TSLA), (BAC),
(TESTIMONIAL)
SPDR S&P 500 ETF (SPY)
Tesla Motors, Inc. (TSLA)
Bank of America Corporation (BAC)
5%. A lousy 5%.
That?s all we managed to clock in the latest correction in the greatest bull market of all time.
It?s not the 6% hickey we had to endure in February, nor as modest as the 4% setback in August. Call it a middling type correction, a kind of correction light. The buyers do still have itchy trigger fingers.
All it took to bring it to an end was a September nonfarm payroll that blew the socks off the forecasts of most analysts, coming in at a positively steroidal 248,000. It?s like they?re finally hiring again.
That is, unless you just graduated from college with a degree in English, Sociology, or Political Science, and are lugging $100,000 in student loans. Coders everywhere are writing their own tickets.
The headline unemployment rate plunged from 6.1% to 5.9%, an eight year low, and the broader U-6 figure is closing in on 10%.
Even more impressive were the back month upward revisions, which were enormous. July was boosted from 212,000 to 243,000, and August was goosed from 142,000 to 180,000.
The hiring was across the board, with professional & business services, retail, health services, and even construction leading the way.
What all of this means is that the freshly updated 4.4% Q2 GDP growth rate isn?t some cockamamie government concoction, but is, in fact real.
More amazing is that we are seeing these blistering numbers against a background of non-existent inflation, even deflation, if the August -0.1% Consumer Price Index is to be believed.
That gives my friend, Federal Reserve governor Janet Yellen, a blank check to keep interest rates lower for longer than anyone believes possible.
Without the inflation bogeyman, you might as well keep rates at zero forever. Personally, I am in the 2016 camp before we start to see interest rate rises.
All this means it is back to the races for the stock market, with an (SPX) bull?s-eye of 2050-2100 now in the cards. However, we?re not going there in a straight line.
I expect more of a sideways wedge formation developing first over the coming month where we see successive higher lows and lower highs. When we reach the apex of the triangle it will be bingo!, and a blast off to new all time highs.
Of course, you can?t go to the races without a program. So make your choices carefully, as the kind of corrections of the type we have just seen often herald sudden sector rotations.
I think financials are the place to be, especially if my prediction that interest rates are bottoming proves correct. That?s why I knocked out a Trade Alert to buy Bank of America (BAC) last week (click here for the editor?s cut). Conveniently, it jumped 5% the next day. I have a pleasant habit of doing that with (BAC).
I am not dishing out a positive view on risk assets because I live in LaLa Land (I only grew up there), am a perma bull, or like drowning myself in the punch bowel (at least not since college). For me, it?s all about the numbers.
Here?s a list of figures to show, not that shares are cheap or how expensive shares are, but how moderately priced they are:
1) With a price earnings multiple of 17X, we are smack in the middle of a 10-25X historic range.
2) The dividend yield for stocks is at 1.9%, compared to only 1.1% at the 2007 top.
3) Cash reserves per S&P 500 share are a rich $443, compared to only $353 seven years ago.
4) Corporate debt to assets is a mere 23% versus 32% 2007.
I could go on and on, but you see my point. This bull market has years to go before it even flirts with becoming truly expensive, unless you own Tesla (TSLA), according to Mr. Elon Musk.
I think the way to trade this market is to reserve the daily newspapers only for lining the bottom of a birdcage, and to hit the mute button on your TV.
That way you won?t hear about the Ebola Virus, ISIL, the Midterm Elections, the war in the Ukraine, and all the other bogus reasons to sell stocks we are bombarded with daily.
Did I mention that the $20 per barrel plunge in the price of oil we have just seen amounts to one of the largest tax cuts in history for the economy?
See, I always write more interesting economic pieces while watching Men in Black. I think the 6,800-foot altitude here at Lake Tahoe helps too.
So Inspiring!