Global Market Comments
October 31, 2019
(WELCOME TO THE LAND OF ZEROS),
(TLT), (VIX), (GLD), (SLV), (FXY),
(A NOTE ON OPTIONS CALLED AWAY), (BA)
Global Market Comments
October 31, 2019
(WELCOME TO THE LAND OF ZEROS),
(TLT), (VIX), (GLD), (SLV), (FXY),
(A NOTE ON OPTIONS CALLED AWAY), (BA)
Jay Powell really showed his hand today with the press conference following his 25-basis point interest rate cut.
The Fed’s medium-term target rate is now zero. Take a 1.75% inflation rate, subtract a 1.75% overnight rate and you end up with a real interest rate of zero. The fact that we have real economic growth also at zero (1.75% GDP – 1.75% inflation) makes this easier to understand.
That means there will be no more interest rate cuts by the Fed for at least six more months. All interest rate risks are to the downside. There is no chance whatsoever of the Fed raising rates in the foreseeable future with a growth rate of 1.75%. It will also take a substantial fall in the inflation rate to get rates any lower than here.
That may happen if the economy keeps sliding slowly into recession. Net net, this is a positive for all risk assets, but not by much.
I regard every Fed day as a free economics lesson from a renown professor. Over the decades, I have learned to read through the code words, hints, and winks of the eye. It appears that the thickness of the briefcase no longer matters as it did during Greenspan. No one carries around paper anymore during the digital age.
I then have to weed through the hours of commentary that follows by former Fed governors, analysts, and talking heads and figure out who is right or wrong.
In the meantime, the “Curse of the Fed” is not dead yet. The ferocious selloffs that followed the last two Fed rate cuts didn’t start until the day or two after. That’s what the bond market certainly thinks, which rallied hard, a full two points, after the announcement.
All of this provides a road map for traders for the coming months.
The Santa Claus rally will start after the next dip sometime in November. Buy the dip and ride it until yearend. The Mad Hedge Market Timing Index at 75, the bond market (TLT), the Volatility Index (VIX) and the prices of gold (GLD), silver (SLV), and the Japanese yen (FXY) are all shouting this should happen sometime soon.
I hope this helps.
It took me precisely 28 days and not a day more.
That’s how long it took for my bearish call on desperate online food delivery company, GrubHub (GRUB) to come to fruition.
I wrote an overly negative report on the company which was published on October 2nd explaining why this company and its terrible unit economics were set for a rude awakening.
I usually don’t revisit the same company within the same month in this newsletter, but when I looked at the price this morning, it took me a few minutes to wrap my head around the 44% daily decline.
I will go one more step now and profusely recommend that nobody in their right mind should currently take any bullish positions on any company reliant on employing the gig economy.
The gig economy has been found out for what it is – an elaborate scheme enriching tech stakeholders while shorting American blue-collar labor.
Instead of proper wages flowing to the Uber driver or in this case the GrubHub driver, management has maneuvered its way through some nifty alternative classifications enabling companies to divert a chunk of capital back into the business model.
If these companies can’t make money with skimping on driver pay, how will they make money when American law mandates them to cover sick leave, paid vacations, health insurance, and overtime pay which could soon be coming?
And on top of the subsidies which add to the overall unit cost, how on earth will they piece together a solution that would satisfy shareholders?
Then mix the unworkable unit economics and fuse it with a boatload of competition and my conclusion is clear – profitability is a pipedream.
Buttressing my claims of unprofitability and market stagnation in a note to shareholders, the company admitted, “supply innovations in online takeout have been played out.”
The pitiful food delivery company slashed fourth-quarter revenue projections to between $315 million and $335 million making a mockery of the $387.3 million consensus.
The house of cards is finally collapsing.
Who is the competition?
There are three fierce contestants in UberEats, DoorDash and PostMates.
And to add even more spice inside the fajita, PostMates has recently shelved a planned 2019 IPO because of “market conditions,” a testament to the poor growth prospects for online food deliveries.
I believe no food delivery stock will ever go public again unless they revalue themselves 65% lower from today’s prices.
Much of the value in these companies is a mirage.
To give GrubHub credit, they didn’t put up Chinese walls in their guidance and mentioned that competition is wreaking havoc detailing that their customers are not “extremely loyal.”
They should expect investors to not be extremely loyal either.
Existing customers are now price-shopping by surfing around different apps to take advantage of price promotions proving my point that these gig economy companies contribute minimal incremental value to the end user.
Their secret sauces are hardly secret.
These apps are commodities and yes, there is value in their proprietary algorithms, but by no means are the barriers of entry so colossal that it would take North Korean engineers 10 years to reverse-engineer these same algos.
And with wielding low-grade tech and resigned to “low double-digit” growth, the bullish case behind this stock and the industry as a whole becomes almost laughable.
Don’t bring a knife to a gunfight!
If Uber can perform miracles and reach $40 or if Lyft can snake its way up to $55, these would be the perfect entry points to scale into these cash burn disasters from the short side.
As for GrubHub, don’t buy the dead cat bounce.
Global Market Comments
October 30, 2019
(HOW TO EXECUTE A VERTICAL BULL CALL SPREAD),
(THANK GOODNESS, I DON’T LIVE IN SWEDEN), (EWD),
We have recently had a large influx of new subscribers.
I have no idea why. Maybe it’s my sterling personality and rapier-like wit.
For whatever reason, I am going to update several educational pieces that are core to understanding the Mad Hedge trading strategy.
Most investors make the mistake of investing in positions that have only a 50/50 chance of success, or less. They’d do better with a coin toss.
The most experienced hedge fund traders find positions that have a 99% chance of success and then leverage up on those trades. Stop out of the losers quickly and you have an approach that will make you well into double digits, year in and year out, whether markets go up, down, or sideways.
For those readers looking to improve their trading results and create the unfair advantage they deserve, I have posted a training video on How to Execute a Vertical Bull Call Spread.
This is a matched pair of positions in the options market that will be profitable when the underlying security goes up, sideways, or down in price over a defined limited period of time.
It is the perfect position to have onboard during markets that have declining or low volatility, much like we have experienced in for most of the last several years, and will almost certainly see again.
I have strapped on quite a few of these babies across many asset classes this year, and they are a major reason why I am up so much this year.
To understand this trade, I will use the example of Apple trade, which most people own and know well.
On October 8, 2018, I sent out a Trade Alert by text messages and email that said the following:
BUY the Apple (AAPL) November 2018 $180-$190 in-the-money vertical BULL CALL spread at $8.80 or best
At the time, Apple shares were trading at $216.17. To accomplish this, they had to execute the following trades:
Buy 11 November 2018 (AAPL) $180 calls at….………$38.00
Sell short 11 November 2018 (AAPL) $190 calls at….$29.20
A screenshot of my own trading platform is below:
This gets traders into the position at $8.80, which cost them $9,680 ($8.80 per option X 100 shares per option X 11 contracts).
The vertical part of the description of this trade refers to the fact that both options have the same underlying security (AAPL), the same expiration date (November 16, 2018) and only different strike prices ($180 and $190).
The maximum potential profit can be calculated as follows:
+$190.00 Upper strike price
-$180.00 Lower strike price
+$10.00 Maximum Potential Profit
Another way of explaining this is that the call spread you bought for $8.80 is worth $10.00 at expiration on November 16, giving you a total return of 13.63% in 27 trading days. Not bad!
The great thing about these positions is that your risk is defined. You can’t lose any more than the $9,680 you put up.
If Apple goes bankrupt, we get a flash crash or suffer another 9/11 type event, you will never get a margin call from your broker in the middle of the night asking for more money. This is why hedge funds like vertical bull call spreads so much.
As long as Apple traded at or above $190 on the November 16 expiration date, you will make a profit on this trade.
As it turns out, my take on Apple shares proved dead-on, and the shares rose to $222.22, or a healthy $32 above my upper strike.
The total profit on the trade came to:
($10.00 expiration – $8.80 cost) = $1.20
($1.20 profit X 100 shares per contract X 11 contracts) = $1,320.
To summarize all of this, you buy low and sell high. Everyone talks about it but very few actually do it.
Occasionally, Vertical Bull Call Spreads don’t work and the wheels fall off. As hard as it may be to believe, I am not infallible.
So if I’m wrong and I tell you to buy a vertical bull call spread, and the shares fall not a little, but a LOT, you will lose money. In those rare cases when that happens, I’ll shoot out a Trade Alert to you with stop-loss instructions before the damage gets out of control.
I start looking at a stop loss when the deficit hit 10% of the size of the position or 1% or the total capital in my trading account.
To watch the video edition of How to Execute a Vertical Bull Call Spread complete with more detailed instructions on how to execute the position with your own online platform, please click here.
Good luck and good trading.
Global Market Comments
October 29, 2018
(PLAYING THE SHORT SIDE WITH VERTICAL BEAR PUT SPREADS), (TLT)
(WHY TECHNICAL ANALYSIS DOESN’T WORK)
(FB), (AAPL), (AMZN), (GOOG), (MSFT), (VIX)
Global Market Comments
October 28, 2019
(MARKET OUTLOOK FOR THE WEEK AHEAD, or DON’T FIGHT THE FED),
(BIIB), (IBB), (TSLA), (VIX), (BA), (AMZN), (AAPL), (MSFT), (GM)
Don’t fight the Fed.
That was the overwhelming message of the market last week as it ground up to a new intraday all-time high. The economy may be going to hell in a handbasket. But as long as the Fed keeps lowering interest rates, stocks will go up, kicking and screaming all the way. It’s that simple.
America’s central bank will get its next chance to cut rates on Wednesday at 2:00 PM from the current overnight rate of 2.00%.
The big question is: Will the curse of the Fed continue? For the last two times the Fed lowered interest rates, substantial stock market selloffs ensued, the last one reaching a 7.5% haircut. We will know shortly.
The Mad Hedge Lake Tahoe Conference held last weekend was a blowout success, with a great time had by all. The weather couldn’t have been more perfect, with the lake waters calm and crystal clear. A day of market insights were delivered by me and Mad Hedge Technology Letter author Arthur Henry.
The only drawback was that several guests were prevented from going home by mandatory evacuations of several Bay Area cities and the closure of Interstate 80 going back to San Francisco. A handful (including me), had no electric power to return to when they got home.
I’ll share with you the most disturbing chart of the entire day showing the S&P 500 (SPY) has been grinding up to new highs, earnings forecasts have been absolutely falling off a cliff. Clearly, with the Volatility Index (VIX) back down to the lowly $12 handle, this is a market that is cruising for a bruising….someday.
Brexit failed again, taking the quagmire into its fourth year. An EC deal is postponed until January 31, but they’re really not interested at all. British pounds collapsing, creating a new “RISK OFF” leg worldwide. Prime minister Johnson has lost 5 consecutive parliamentary votes, an all-time record. When will he get the message?
US Capital Investment has ground to a halt, with business fixed investment down 1% YOY. No one knows where to put their money, inside the US or not, so they’re doing nothing until it is sorted out. Call me when its over.
Biogen (BIIB) exploded to the upside on its FDA application for its new Alzheimer’s drug. Written off for dead six months ago, the company secretly kept working on Aducanumab until today’s blockbuster announcement. The drug reverses amyloid plaques thought responsible for Alzheimer’s. The stock is up an incredible 38% and has even dragged up the biotech ETF (IBB) 3%. Buy (BIIB) on dips.
Boeing soared on accelerated production timeline for 2020. Good thing I bought it just recently. The stock had been severely oversold on a $45 dive in two days. Buy (BA) on the dips.
The trade war is back in business with the Chinese demanding a total end to tariffs before any big ag buys. The rumors knocked stocks back on their heels. The Middle Kingdom also takes issue with recent Pence comments about basketball. Trump is definitely cornered. The trade war pain has gone global, with Europe taking the biggest hit. Some 40% of Germany’s GDP comes from exports. Growth will be on the skids for the next two years, even if a deal is done tomorrow.
Tesla shocked, bringing in a profit for only the third time in company history, and causing the stock to soar $55. The 100,000-unit production target within yearend looks within reach. Most importantly, they opened up a new supercharger station in Incline Village, Nevada! Tesla is now America’s most valuable car maker, beating (GM). The ideological Exxon-financed shorts have been destroyed once and for all. Buy (TSLA) on dips. There’s a ten bagger in this one.
Amazon put out a gloomy Christmas forecast on the back of a disappointing earnings report, crushing the shares by 7%. Looks like the trade war might cause a recession next year. Q3 revenues were great, up 24% to an eye-popping $70 billion. Good thing I took profits on the last option expiration. Poor Jeff Bezos, the abandoned son of an alcoholic circus clown, dropped $7 billion in net worth on Thursday. Buy (AMZN) on the dips.
The safest stock in the market, Microsoft, says it’s all about the cloud. Azure revenues grew a stunning 59% in Q3. (MSFT) is now up 37% on the year. Keep buying every dip, if we ever get another one.
Apple stock soared to new all-time high, taking the market cap just short of $1.1 trillion. iPhones are now less than 50% of total sales. The company is firing on all cylinders. My target is $200. Buy (AAPL) on dips.
Existing Home Sales dropped, down 2.2% in September to 5.38 million units. It’s shocking given the incredibly low level of interest rates. A shortage of supply?
This was a week for the Mad Hedge Trader Alert Service to stay level at an all-time high. With only one position left in Boeing (BA), not much else was going to happen.
My Global Trading Dispatch reached new pinnacle of +349.47% for the past ten years and my 2019 year-to-date accelerated to +48.42%. The notoriously volatile month of October stands at a blockbuster +11.91%. My ten-year average annualized profit held steady at +35.24%.
With my Mad Hedge Market Timing Index sitting around the neutral 62 level, it is too close to neutral to do anything dramatic.
The coming week is pretty non eventful of the data front. Maybe the stock market will be non-eventful as well.
On Monday, October 28 at 8:30 AM, the September Chicago Fed National Activity Index is published. Alphabet (GOOGL), and AT&T (T) report.
On Tuesday, October 29 at 9:00 AM, we get a new S&P Case Shiller National Home Price Index for August. Amgen (AMGN) and Pfizer (P) report.
On Wednesday, October 30, at 8:30 AM, the first read on US Q3 GDP is announced. At 10:30 AM, EIA Energy Stocks are published. Then at 2:00 PM, we obtain the FOMC interest rate decision. Apple (AAPL) and Facebook (FB) report.
On Thursday, October 31 at 8:30 AM, Weekly Jobless Claims are out. US Steel (X) reports.
On Friday, November 1 at 8:30 AM, the October Nonfarm Payroll Report is released. AbbVie (ABBV) and ExxonMobile (XOM) report.
The Baker Hughes Rig Count follows at 2:00 PM.
As for me, I’ll be driving back home from Lake Tahoe. I wonder if I’ll make it.
Good luck and good trading.
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
Publishing magnate and self-described populist William Randolph Hearst was a deep admirer of Adolph Hitler and did not shy away from using his newspapers as a de-facto mouthpiece spouting off der Fuhrer’s propaganda.
Hearst created content sympathizing with the Nazi ethos and even mobilized an embedded secret agent from the German government to act as a correspondent that followed hot, daily scoops inside Germany.
Hearst also used his publishing clout to pull the strings in the 1932 presidential election backing candidate John Nance Garner or “Cactus Jack” who later agreed to be Franklin D. Roosevelt’s running mate.
The fusion of politics and media has been chiseled into human DNA since antiquity. However, the purpose of newspapers has evolved significantly since it became impossible to break even about 10 years ago.
Print newspapers are a lot like the United States Postal Service (USPS) – it specializes in losing money.
However, the (USPS) was never politicized as was the publishing industry until the administration managed to commingle the loss-making mail outfit and Amazon as a joint problem roiling society.
The politicization comes at a cost to society.
All the well-intentioned journalists involved in earnest and quality journalism lose out because the new normal for newspapers has evolved into a William Hearst-like blatant tool promoting targeted interests.
Do you ever wonder why the Washington Post hardly ever publishes content harmful to the image and interests of Amazon?
Because it is owned by the same man, Jeff Bezos, who founded Amazon (AMZN) in 1994, as he cruised in his car cross-country from New York to Seattle where he would establish his tech empire.
Effectively, Jeff Bezos has the ear of each corner of the political power grid in Washington and even more so as he establishes another Amazon headquarter in the state capitol.
And while the administration attacked Bezos as a job destroyer repeatedly, Amazon has in fact been the largest private job CREATOR in the U.S. It added a staggering 130,000 new jobs in 2017, and an eye-popping 560,000 jobs over the past 10 years.
Laurene Powell Jobs, widow to Steve Jobs, acquire the Boston-based American magazine The Atlantic.
The Atlantic earns more than $10 million per year in revenue and lures in over 33 million readers per month.
Billionaire biotech investor Patrick Soon-Shiong reached a deal with Tribune Publishing Co. (TPCO), a portfolio of a vast array of various legacy media assets, to take over the Los Angeles Times and San Diego Union-Tribune for $500 million.
Tribune Publishing Co is a potential investment for SoftBanks’ (SFTBY) Masayoshi Son, looking to scoop up parts of the extensive portfolio.
Private equity group Apollo and media firm Gannett Company are also in the mix to acquire Tribune Publishing Co
Some of Tribune Publishing Co.’s crown assets are the Chicago Tribune, the New York Daily News, and the Baltimore Sun among other regional newspapers with a large audience base.
The courting of these news media assets comes at a time when Google (GOOGL) is funding a project to automate more than 30,000 stories per month for the local media as a cost-effective way to advance the business model.
Quality journalism written by a human is the last thing in which these mega-tech companies are interested.
Tech is about automating and then scaling the automation. This bodes ill for personalized authors, and newspaper journalists are the lowest rung on the totem pole. They will be the first to be replaced by automation.
The first thought that came into my head when I heard about SoftBank’s vision fund swooping in for another company was data grab.
We have seen this story time and time again.
Newspapers and how an online subscriber behaves on a digital newspaper platform offer valuable data points unfound elsewhere.
The data will reveal the political ideas, topics of interest, and other sensitive information deduced into a comprehensive data profile.
Effectively, a company such as SoftBank will be able to create a functional shadow profile for almost anyone.
The concept of shadow profiling emerged from the acrimony of Mark Zuckerberg’s testimony in Washington and could be the next point of heated contention.
What are shadow profiles?
Shadow profiles are digital profiles crafted from data not directly handed over to Facebook (FB) by the user.
This data is extracted through fringe third parties, other friends on Facebook if they post content unique to you, and specifically through the “find your friends” function that recommends the uploading of an entire digital address book giving Facebook access to everyone you know.
Scarily, there is no opt-out for shadow profiling, and there probably won’t be another congressional testimony about this topic anytime soon.
If Facebook wanted to turn into the FBI, it would be easy.
The treasure trove of data would give insight on the subtle nuances of authentic human behavior and how to best manipulate it.
This artificial profile would seem real.
If you are an Android user like most of the world, Google could fill out the most comprehensive profile with a high degree of accuracy on most people.
The scandalous bit about shadow profiling is that these profiles are whipped up even if a user has never signed up for Facebook.
Shadow profiling, along with other data, becomes more precise as the volume of data piles up. To understand the behavior, trends, and tastes of most of the world’s population is incredibly valuable.
Facebook could use this shadow profiling data to understand the wide range of non-Facebook user behavior.
This way of monetizing data would be highly illegal if leaked to an actionable third party and would be significantly worse than the Cambridge Analytica scandal.
This data should be deleted immediately, but Facebook has a backdoor way to keep the data in the system.
If Facebook got slammed for data leakage then others are in danger, too. That’s because Facebook is not the only player mining data for money.
It wouldn’t be surprising if other large-cap tech companies started to create these shadow profiles to get dirt on their competitors as well as other use cases.
Tech is evolving at such a fast pace. It subconsciously encourages the never-give-up mentality that coerces firms to stay one step ahead which Amazon has been able to do since its inception.
Newspaper companies are next in line to be absorbed by large-cap techs continuously expanding web assets that hyper-focus on exponential data generation.
These newspapers will defend tech‘s interests in the economy similar to how newspapers were used as William Hearst’s rallying cry for politics.
Jeff Bezos has chosen silence to react to the administration’s vendetta against him but he could easily mobilize his assets to protect Amazon’s interests.
Bezos just shrugs his shoulders and goes about his day because he knows Washington cannot do anything to prevent Amazon’s dominance at the top of the tech food chain.
Better take the high road.
Not only do these big tech companies know who you talk to, what you buy, and where you are, but now they are given deeper access into the identity of users.
Be on the lookout for these assets to get cherry-picked and look forward to reading your future newspaper owned by Google, Facebook, and the usual cast of characters.
Stay away from legacy newspaper stocks. Only weigh up the media stocks that have already pivoted to the online streaming business model of scaling original premium content.
People want a better life.
And the Internet has connected the outermost populations living in slum-like conditions giving them a feed into the biggest transformation ever to grace mankind.
The applications of the Internet are countless and promise to deliver huge productivity gains while lifting entire populations out of poverty.
The next leap of digital migration will see the remaining 3 billion of unconnected users connected offering new markets, fresh revenue streams and a super-charged level of competition that our tech behemoths have never seen before.
Each passing day not only sees the value of technology companies rise as data assets become more sought after but the level of expertise increases at a hyper-accelerated pace.
The human capital fueling the outperforming tech sector is like the blood that is pumped through the arteries.
Now, governments are getting in on the act, crafting policies that attempt to lure in top tech talent in an attempt to enhance their economies.
Digital nomads are frequently typecast as tech-savvy Millennials remotely working via an Internet connection while living as an expatriate.
However, they come in all shapes and sizes and that is the main point.
The Baltic nation of Estonia has been one of the leading lights in tech innovation, rolling out Skype before Facebook and Twitter existed.
Skype was entirely comprised of local Estonian developers who achieved this in the early 2000s.
Quite a feat for such a small nation.
This charming Baltic country has stepped up its game with a visa targeted at digital nomads and other countries will likely copy this progressive type of visa.
Estonia rolled out a revolutionary visa allowing digital nomads to work in Estonia all year round. This visa also includes 90 days of travel in the Schengen Area of mainland Europe.
This visa isn’t targeted at EU citizens who already reap the benefits of working all over the European Union, but untapped tech talent that otherwise might not consider Estonia.
Estonia is on a mission to amass as many tech-savvy workers from far-flung places around the world, incorporating them into Estonian life, and boosting the level of innovation in a country that prides itself as a start-up hub.
More importantly, jacking up the volume of tech workers is becoming an existential issue for many sovereign countries as developed countries reap the monetary rewards from such new cutting-edge technology.
These digital nomads create communities that harness an enormous flow of tech know-how. Usually, their friends are fellow like-minded digital nomads that roll in packs with each other.
Tallinn, Estonia has rapidly turned into a top 10 digital stronghold attracting hordes of digital nomads.
If technical issues arise, help is usually just a shout across a coffee shop and presto!
Everything is fixed.
The message is that simple.
Estonia does not care where you are from, how many sugars you drink with your tea, or how you style your hair in the morning.
The concern there is if you know how to use a computer well or not. Plain and simple.
The global tech talent shortage is a pressing issue, and this is just the beginning.
Try hiring an experienced artificial intelligence engineer on the cheap, and headhunters will just hang up and delete your contact information. Better not to low-ball the offer.
In fact, something must give because visa policies are entirely based on legacy systems of yore.
The world has moved on and visa policies should reflect it.
Expect more exotic visa policies pinpointed exactly toward the type of immigrants that nations want as part of their national policy.
With the advent of low-cost carriers such as airBaltic, Spirit Airlines, and Norwegian Air, taking a flight halfway across the world is only a $200 proposition, thanks to wonders of deflation and ruthless competition.
And the further creation of private short-term rental app Airbnb has allowed digital nomads a pipeline of private housing to tap into whenever they jet-set across the globe.
The common denominator that denotes a perfect location for a digital nomad is cost.
Locations such as Copenhagen and Monaco are places of cultural beauty but pricey for a digital nomad to operate from as the wallet turns lighter consumed by the additional marginal cost of housing and hooking up a decent Internet connection.
Estonia and the rest of the Baltic countries are affordable and boast great digital infrastructure.
Sadly, Estonia is also grappling with aging demographics as with many of the Western powers and must lure 440,000 people just to maintain the current population of 1.3 million people.
Many of these Baltic countries lose huge swaths of youth that migrate to higher-wage countries in Western Europe.
Expectedly, they never come back unless just visiting relatives, in effect crushing the local birth rate.
The Estonian government has been bold and is, in some ways, acting with a start-up mentality itself.
This young, audacious government looks to scale up as fast as possible. The visionary policy is seen as the solution to maneuvering around long-lasting problems.
These pro-growth tech policies could invigorate local youth causing them to stay at home rather than flee to greener pastures.
This lifeline might slow down the 60% of local Estonians who dream of moving to a place where they can experience a higher quality of living standards.
Rebranding itself as the digital nomad epicenter is a risky move that most governments wouldn’t dare to do.
It’s easy to ignore the brain drain in the Baltics while I am living in the Bay Area.
Silicon Valley has been drawing in the cream of the crop for years.
Developers want to stay in California because of the high standard of living, which is even nicer on a developer’s salary.
No doubt the Bay Area has poached its share of Baltic working professionals especially when Microsoft acquired Skype.
However, this Estonian policy starts with the low-hanging fruit as the biggest names in the industry’s power players will gravitate toward the oodles of venture capital and large pool of talent. Unfortunately, that place is not the Baltics.
You must learn how to crawl before you can walk. If this visa experiment takes off, it could be a game-changer while nudging the Baltics closer into the West’s orbit of influence and raising income levels.
A win-win situation.
As for me, I won’t be taking a $200 flight to Estonia to work in a coffee shop.
I prefer Incline Village, Nevada, and Zermatt, Switzerland, as my favorite digital nomad hideouts.
If it’s not broke, don’t fix it.
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