Global Market Comments
October 25, 2018
Fiat Lux
Featured Trade:
(THE LAZY MAN’S GUIDE TO TRADING),
(ROM), (UXI), (BIB), (UYG),
(THE NEXT THING FOR THE FED TO BUY IS GOLD),
(GLD), (GOLD), (GDX), (ABX), (NEM)
Global Market Comments
October 25, 2018
Fiat Lux
Featured Trade:
(THE LAZY MAN’S GUIDE TO TRADING),
(ROM), (UXI), (BIB), (UYG),
(THE NEXT THING FOR THE FED TO BUY IS GOLD),
(GLD), (GOLD), (GDX), (ABX), (NEM)
Mad Hedge Hot Tips
October 24, 2018
Fiat Lux
The Five Most Important Things That Happened Today
(and what to do about them)
2) Tesla Soars 12%, as famed short seller covers and goes long. The company is dominating the entire EV sector and no one can ever catch them. Who knew? You did if you read my letter. Click here.
3) My Bond Short Kicked Ass Yesterday, clocking nearly a 10% profit in one day. Sell high, buy low. Everyone talks about it, but no one ever does anything about it. Click here.
4) Caterpillar Does a Swan Dive, down 10% yesterday. It looks like old-line industrials are going to get hit much harder than tech stocks in the next recession. Click here.
5) Australian Tycoon Plans to Build New Titanic. Ah, but this one will be unsinkable, really! Put me in the owner’s suite but I think I’ll bring my own life raft. With global warming, icebergs will be gone in a few years anyway. Click here.
Published today in the Mad HedgeGlobal Trading Dispatch and Mad Hedge Technology Letter:
(HANGING WITH LEONARDO)
(THE CLOUD FOR DUMMIES)
(AMZN), (MSFT), (GOOGL), (AAPL), (CRM), (ZS)
Suppose there was an exchange-traded fund that focused on the single most important technology trend in the world today.
You might think that I was smoking California's largest export (it's not grapes). But such a fund DOES exist.
The Global X Robotics & Artificial Intelligence ETF (BOTZ) drops a gilt-edged opportunity into investors' laps as a way to capture part of the growing movement behind automation.
The fund currently has an impressive $2.2 billion in assets under management.
The universal trend of preferring automation over human labor is mushrooming with each passing day. Suffice to say there is the unfortunate emotional element of sacking a human and the negative knock-on effect to the local community like in Detroit, Michigan.
But simply put, robots do a better job, don't complain, don't fall ill, don't join unions, or don't ask for pay rises. It's all very much a capitalist's dream come true.
Instead of dallying around in single stock symbols, now is the time to seize the moment and take advantage of the single seminal trend of our lifetime.
No, it's not online dating, gambling, or bitcoin, it's Artificial Intelligence.
Selecting individual stocks that are purely exposed to AI is a challenging endeavor. Companies need a way to generate returns to shareholders first and foremost, hence, most pure AI plays do not exist right now.
However, the Mad Hedge Fund Trader has found the most unadulterated AI play out there. A real diamond in the rough.
The best way to expose yourself to this AI trend is through Global X Robotics & Artificial Intelligence ETF (BOTZ).
This ETF tracks the price and yield performance of ten crucial companies that sit on the forefront of the AI and robotic development curve. It invests at least 80% of its total assets in the securities of the underlying index. The expense ratio is only 0.68%.
Another caveat is that the underlying companies are only derived from developed countries. Out of the 10 disclosed largest holdings, seven are from Japan, two are from Silicon Valley, and one, ABB Group, is a Swedish-Swiss multinational headquartered in Zurich, Switzerland.
Robotics and AI walk hand in hand, and robotics are entirely dependent on the germination prospects of AI. Without AI, robots are just a clunk of heavy metal.
Robots require a high level of AI to meld seamlessly into our workforce. The stronger the AI functions, the stronger the robot's ability, filtering down to the bottom line.
AI-embedded robots are especially prevalent in the defense industry, automobile manufacturing, and heavy industrial machinery. The industrial robot industry projects to reach $80 billion per year in sales by 2024 as more of the workforce gradually becomes automated.
The robotic industry has become so prominent in the automotive industry that they constitute greater than 50% of robot investments in America.
Let's get the ball rolling and familiarize readers of the Mad Hedge Technology Letter with the most influential weightings in the underlying ETF (BOTZ).
Nvidia (NVDA)
Nvidia Corporation is a company I often write about as their main business is producing GPU chips for the video game industry.
This Santa Clara, California based company is spearheading the next wave of AI advancement by focusing on autonomous vehicle technology and AI-integrated cloud data centers as their next cash cow.
All these new groundbreaking technologies require ample amounts of GPU chips. Consumers will eventually cohabitate with state of the art IOT products (internet of things), fueled by GPU chips, coming to mass market like the Apple Homepod.
The company is led by genius Jensen Huang, a Taiwanese-American who cut his teeth as a microprocessor designer at competitor Advanced Micro Devices (AMD).
Nvidia constitutes a hefty 6.60% of the BOTZ ETF.
To visit their website please click here.
Yaskawa Electric (Japan)
Yaskawa Electric is the world's largest manufacturer of AC Inverter Drives, Servo and Motion Control, and Robotics Automation Systems, headquartered in Kitakyushu, Japan.
It is a company I know well, having covered this former zaibatsu company as a budding young analyst in Japan 45 years ago.
Yaskawa has fully committed to improving global productivity through Automation. Yaskawa was recently switched out of the index in favor of an American newcomer John Bean Technologies specializing in the food processing and air transportation industries. Nevertheless, Yaskawa is still a company to have on your radar screen.
To visit Yaskawa's website, please click here.
Intuitive Surgical (ISRG)
Intuitive Surgical Inc (ISRG) trades on Nasdaq and is located in sun-drenched Sunnyvale, California.
This local firm designs, manufactures, and markets surgical systems and is industriously focused on the medical industry.
The company's da Vinci Surgical System converts the surgeon's hand movements into corresponding micro-movements of instruments positioned inside the patient.
The products include surgeon's consoles, patient-side carts, 3-D vision systems, da Vinci skills simulators, and da Vinci Xi integrated table motions.
This company comprises 7.71% of BOTZ. To visit their website, please click here.
Fanuc Corp. (Japan)
Fanuc was another one of the hit robotics companies I used to trade in during the 1970s and I have visited their main factory many times.
The 4thlargest portion in the (BOTZ) ETF at 6.11% is Fanuc Corp. This company provides automation products and computer numerical control systems, headquartered in Oshino, Yamanashi.
They were once a subsidiary of Fujitsu, which focused on the field of numerical control. The bulk of their business is done with American and Japanese automakers and electronics manufacturers.
They have snapped up 65% of the worldwide market in the computerized numerical device market (CNC). Fanuc has branch offices in 46 different countries.
To visit their company website, please click here.
Keyence Corp (Japan)
Keyence Corp is the leading supplier of automation sensors, vision systems, barcode readers, laser markers, measuring instruments, and digital microscopes.
They offer a full array of service support and closely work with customers to guarantee full functionality and operation of the equipment. Their technical staff and sales teams add value to the company by cooperating with its buyers.
They have been consistently ranked as the top 10 best companies in Japan and boast an eye-opening 50% operating margin.
They are headquartered in Osaka, Japan and make up 6.10% of the BOTZ ETF.
To visit their website please click here.
(BOTZ) does has some pros and cons. The best AI plays are either still private at the venture capital level taken over by the SoftBank Vision Fund wielding its war chest of $100 billion or a Silicon Valley mainstay such as Andreessen Horowitz.
You also need to have a pretty broad definition of AI to bring together enough companies to make up a decent ETF.
However, it does get you a cheap entry into many for the illiquid foreign names in this fund.
Automation is one of the reasons why this is turning into the deflationary century and I recommend all readers who don't own their own robotic led business, pick up some Global X Robotics & Artificial Intelligence ETF (BOTZ).
And by the way, the entry point right here on the charts is almost perfect.
To learn more about (BOTZ) please visit their website by clicking here.
Mad Hedge Hot Tips
October 23, 2018
Fiat Lux
The Five Most Important Things That Happened Today
(and what to do about them)
1) Dow Plunges 450 at the Opening, on a Caterpillar and 3M (MMM) downshift in guidance. These two stocks account for half the index loss. Give me a break. It’s one of the biggest BS moves I have ever seen. Click here.
2) Bonds Rocket on “RISK OFF” Move. With the Chinese still dumping their massive $1 trillion in US Treasury holdings and the budget deficit soaring towards $1 trillion, I am more than happy to sell short here. Check your inbox for the Trade Alert.
3) NASDAQ is having its Worst Month since 2008. And you wondered why I spent most of the summer in cash. Click here.
4) China Stock Crash Comes Home to Roost. Up yesterday, down today, maybe trade wars are harder to win than someone thought. Click here.
5) Stocks Give Up All 2018 Gains. Ho hum, easy come, easy go. Click here.
Published today in the Mad Hedge Global Trading Dispatch and Mad Hedge Technology Letter:
(WATCH OUT FOR THE UNICORN STAMPEDE IN 2019),
(TSLA), (NFLX), (DB), (DOCU), (EB), (SVMK), (ZUO), (SQ),
(A NOTE ON OPTIONS CALLED AWAY), (MSFT),
(THE CLOUD FOR DUMMIES)
(AMZN), (MSFT), (GOOGL), (AAPL), (CRM), (ZS)
Global Market Comments
October 23, 2018
Fiat Lux
Featured Trade:
(WATCH OUT FOR THE UNICORN STAMPEDE IN 2019),
(TSLA), (NFLX), (DB), (DOCU), (EB), (SVMK), (ZUO), (SQ),
(A NOTE ON OPTIONS CALLED AWAY), (MSFT)
Mad Hedge Hot Tips
October 22, 2018
Fiat Lux
The Five Most Important Things That Happened Today
(and what to do about them)
1) Watch Out for a Tenfold Increase in IPOs in 2019, as the mega unicorns such as Uber and Airbnb go public. Everyone wants to get stock out the door before the next recession hits. Will it kill the goose that laid the golden egg? Click here.
2) It’s a Big Week for Tech Earnings. Can blowout earnings reports from Amazon and Microsoft end a steep correction? So far, so good. Click here.
3) Chinese Stock Markets Soar 4%. Maybe they have been tipped about a coming deal with the US? Click here.
4) Trump Announces Major New Tax Cut, with the midterm election two weeks off. But even his own party knows nothing about it, and Congress is out of session. With the budget deficit about to break $1 trillion for the first time since the crash markets aren’t buying it, with stocks down and bonds up. Click here.
5) Headless Body in Topless Bar. I’ve been waiting for years to use the most famous newspaper headline in history. Richard Parsons only lasted a month as the new CEO of CBS. Maybe it was the list of pending litigation that made him sick. Click here.
Published today in the Mad Hedge Global Trading Dispatch and Mad Hedge Technology Letter:
(THE MARKET OUTLOOK FOR THE WEEK AHEAD, or HEADING FOR LAKE TAHOE),
(SPY), (TLT), (VIX), (MSFT), (AMZN), (CRM), (ROKU),
(BRING BACK THE UPTICK RULE!)
(FACEBOOK’S DARPA DALLIANCE),
(FB), (GOOGL), (AAPL)
Global Market Comments
October 22, 2018
Fiat Lux
Featured Trade:
(THE MARKET OUTLOOK FOR THE WEEK AHEAD, or HEADING FOR LAKE TAHOE),
(SPY), (TLT), (VIX), (MSFT), (AMZN), (CRM), (ROKU),
(BRING BACK THE UPTICK RULE!)
“The next time we have a global economic crisis it will be much worse than in 2008. There will be money printing and war. The whole system will collapse. You don’t want to own government bonds and cash. Equities don’t do well, but at least you still have the ownership of companies. Precious metals do well in that environment, and so does oil,” said Mark Faber, publisher of the Gloom, Boom, and Doom Report.
Mad Hedge Hot Tips
October 19, 2018
Fiat Lux
The Five Most Important Things That Happened Today
(and what to do about them)
2) Will Saudi Arabia Dump Their Technology Holdings, in response to the Khashoggi murder? Some tech traders think so. Hey, if you boycott Middle Eastern countries that cut off the fingers of journalists you won’t be able to go anywhere. Click here.
3) Subprime Debt is Making a Big Comeback. Another sign of a long-term market top. Some people will do anything for yield in this low return world. Click here.
4) September Existing Home Sales Down a Disastrous 3.5%, a 2 ½ year low. If you had any doubts the housing boom is well and truly over. Click here.
5) The Algorithms Are Coming After You. Actually, this letter has been written by an algorithm for the last ten years, I just haven’t told you yet. Fooled you! The San Francisco conference scene has turned to all AI all the time. Click here.
Published today in the Mad Hedge Global Trading Dispatch and Mad Hedge Technology Letter:
(LAST CHANCE TO BUY TICKETS NOW FOR THE MAD HEDGE LAKE TAHOE CONFERENCE FOR OCTOBER 26-27)
(FIVE STOCKS TO BUY AT THE BOTTOM),
(AAPL), (AMZN), (SQ), (ROKU), (MSFT)
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