Global Market Comments
December 21, 2020
Fiat Lux
SPECIAL END OF YEAR ISSUE
Featured Trade:
(THANK YOU FROM THE MAD HEDGE FUND TRADER),
(MY LAST RESEARCH PIECE OF THE YEAR)
You are in safe hands now, with your trading portfolios up nearly 65% on the year, if you had followed every one of my Trade Alerts to the letter.
I know a lot of you made more, a lot more.
I will be making a beeline for my beachfront estate at Incline Village, Nevada on the pristine shores of Lake Tahoe and work from there for the next two weeks. That is if I can battle my way through the nightmarish Sacramento holiday traffic.
My Tesla Model X packed to the gills with Christmas presents, ski equipment, snowshoes, board games (yes, “Qi” is a word in Scrabble), and my expedition backpack. No extra food this year because the pandemic has barred all guests. Thank you Elon Musk and your P100D!
For proof that after working 12 hours a day, six hours a week, to make you wealthier and wiser, please read my last research piece of the year below, written tongue in cheek with a certain Hollywood film classic in mind.
And what a year it has been. Pandemics, wildfires, economic collapse, lockdowns, recoveries, and a presidential election still being fought out in the courts. It all seems like some cheap Hollywood thriller!
The research I gathered was enough for me to publish 760 letters totaling one million words, including Global Trading Dispatch, the Mad Hedge Technology Letter, the Mad Hedge Biotech & Health Care Letter, and Mad Hedge Hot Tips.
That is about almost double the length of Tolstoy’s War and Peace, but then Tolstoy in his time had to write with a quill and ink, not Word for Windows. I am a writing machine. I haven’t received a single complaint this year that I was not sending out enough content.
I also managed to pump out over 300 trade alerts with a success ratio of 92%. That’s an average of more than one each trading day.
According to the email traffic, many of you did extremely well. If you are into triple digits, please send me an email. I would love to get a testimonial from you. I know that many of you have run out and purchased the new Tesla Model X gullwing P100D with the “ludicrous mode” on my recommendation.
You know that when they are advertising power tools and Pelotons on CNBC, it is time to get out of Dodge. I’ll take the hint.
At Tahoe, I will consume a suitcase full of research and, after much cogitation and contemplation, write my 2021 Annual Asset Review, which I will publish on Wednesday, January 6.
I will also be rethinking my business model, so if any of you have suggestions on how I can improve this service, send me an email at madhedgefundtrader@yahoo.com.
Just put “suggestions” in the subject line. My intention is to never stop improving the product, to always under-promise and over-deliver.
It’s a nostrum of Silicon Valley that whenever you think you're finished, you’re finished.
Please forgive me in advance if I take a few hours catching some “big air” off of Squaw Valley’s treacherous double X black runs.
If you have any trading questions, please seek me out on the northern section of Tahoe Rim Trail around 11,000 feet, where I will be snowshoeing my way around the lake in subzero temperatures.
I will probably be the only guy up there, so you can just follow the first set of tracks you find. That is if hungry mountain lions don’t get you first.
I’ll have my Bowie knife and an industrial-sized can of bear spray, so I’ll be fine. As for you, I’m not so sure. This is what I do during my winter leisure time.
During my absence, I will be posting some of my favorite pieces from the last year which give insights on how markets will play out over the coming decades, and a lot of basic educational pieces.
I have thousands of new subscribers who will be reading these for the first time, and many legacy readers may have missed them the first time around or forgotten the data because they are older than me.
I hope you find them as another useful step towards your education on the global financial markets. Charts and data have been updated to make them relevant.
Finally, I want to thank you all for my incredible life. Thanks to you I have crossed the Atlantic in luxury in the owner’s suite of Cunard’s Queen Mary 2 (My uncle took the Queen Mary 1 in 1943 in somewhat more cramped conditions).
I rode the Orient Express from London to Venice. I lived in the lap of luxury at the Hotel Cipriani in Venice and at the Raffles in Singapore.
And I managed to haggle the merchants in Tangier’s historic bazaar down in the price of the most elegant hand-made carpets.
I had the opportunity to meet heads of state, CEOs, top money managers, our nation’s military leaders, and even a Maori chieftain.
I had the pleasure of flying the length of the Grand Canyon at low altitude as a pilot, weaving my way along the Colorado River. And, oh yes, I made it to the top of the Matterhorn one more time.
I really did get to rub shoulders with the high and mighty who run the world and harvest their pearls of wisdom, which I passed on to you.
I logged 200 hours as a pilot flying to such diverse locations as the Great Barrier Reef in Australia and Honda’s loading docks in San Francisco.
I never minded the horrendous jet lag, the well-deserved hangovers, or the traffic jams in China. Your subscriptions to my services, your support of my research, and your endless compliments made it all worth it.
I always tell people that I am not in this for the money, and it’s true.
Not a day goes by when I don’t receive an email from a grateful reader who claims that I have paid off their mortgage, a kid’s college education, a parent’s uninsured operation, or a child’s chemotherapy.
They tell me that I am teaching them to fish; thus, sparing them from the frozen tasteless kind they sell at Safeway, which they must wait in line to pay inflated prices. You can’t buy that kind of appreciation, not with all the money in the world.
It certainly beats the hell out of spending my retirement scoring a 98 on the local golf course. And I’ll never beat Tiger Woods, no matter how many blonds I date.
To leave you all in the Christmas spirit, I have posted a video and pictures of the Polar Express in Portland, Oregon.
Taking my family for a ride has become an annual event, and it is a thrill for my younger kids as well. To watch a short video of one of the largest steam engines in the world, please click here.
Merry Christmas and Happy New Year to All!
Good Trading in 2021!
John Thomas
The Mad Hedge Fund Trader
You Have to Know the Right People to Call This Market
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
All work and no play makes Jack a dull boy.
With Apologies to "The Shining" (1980)
“If the Fed brings a lump of coal in 2020, then they better bring some candy canes for the kids as well,” said Bill Gross, former CEO of bond giant PIMCO.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, 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
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Technology Letter
December 18, 2020
Fiat Lux
Featured Trade:
(TECH IN 2021)
(ZM), (WORK), (NVDA), (AMD), (QCOM), (SQ), (PYPL), (INTU), (PANW), (OKTA), (CRWD), (SHOP), (MELI), (ETSY), (NOW), (AKAM), (TWLO)
The tech sector has been through a whirlwind in 2020, and if investors didn’t lose their shirt in March and sell at the bottom, many of them should have ended the year in the green.
My prediction at the end of 2019 that cybersecurity and health cloud companies would outperform came true.
What I didn’t get right was that almost every other tech company would double as well.
Saying that video conferencing Zoom (ZM) is the Tech Company of 2020 is not a revelation at this point, but it shows how quickly a hot software tool can come to the forefront of the tech ecosystem.
M&A was as hot as can be as many cash-heavy cloud firms try to keep pace with the Apples and Googles of the tech world like Salesforce’s purchase of workforce collaboration app Slack (WORK).
Not only has the cloud felt the huge tailwinds from the pandemic, but hardware companies like HP and Dell have been helped by the massive demand for devices since the whole world moved online in March.
What can we expect in 2021?
Although I don’t foresee many tech firms making 100% returns like in 2020, they are still the star QB on the team and are carrying the rest of the market on their back.
That won’t change and in fact, tech will need smaller companies to do more heavy lifting come 2021.
The only other sector to get through completely unscathed from the pandemic is housing, and unsurprisingly, it goes hand in hand with converted remote offices that wield the software that I talk about.
The world has essentially become silos of remote offices and we plug into the central system to do business with each other with this thing called the internet.
In 2021, this concept accelerates, and cloud companies could easily check in with 20%-30% return by 2022. The true “growth” cloud firms will see 40% returns if external factors stay favorable.
This year was the beginning of the end for many non-tech businesses and just because vaccines are rolling out across the U.S. doesn’t mean that everyone will ditch the masks and congregate in tight, indoor places.
There is nothing stopping tech from snatching more turf from the other sectors and the coast couldn’t be clearer minus the few dealing with anti-trust issues.
I can tell you with conviction that Facebook, Google, Apple, and Amazon have run out of time and meaningful regulation will rear its ugly head in 2021.
We are already seeing the EU try to ratchet up the tax coffers and lawsuits up the wazoo on Facebook are starting to mount.
Eventually, they will all be broken up which will spawn even more shareholder value.
Even Fed Chair Jerome Powell told us that he thinks stocks aren’t expensive based on how low rates have become.
That is the green light to throw new money at growth stocks unless the Fed signal otherwise.
As we head into the 5G world, I would not bet against the semiconductor trade and the likes of Nvidia (NVDA), AMD (AMD), Qualcomm (QCOM) should overperform in 2021.
Communication is the glue of society and communications-as-a-platform app Twilio (TWLO) will improve on its 2020 form along with cloud apps that make the internet more efficient and robust like Akamai (AKAM).
Workflow cloud app ServiceNow (NOW) is another one that will continue its success.
The uninterrupted shift to the cloud will not stop in 2021 and will be a strong growth driver for numerous tech companies next year.
I will not say this is a digital revolution, but as corporate executives realize they haven’t spent enough on the cloud in the lead-up to the pandemic and must now play catch-up in order to satisfy new demands in the business.
The most recent CIO survey was the thesis that cloud and digital adoption at 10% of enterprise and 15% of consumer spend entering 2020 would continue to accelerate post-pandemic and into 2021-2022.
A key dynamic playing out in the tech world over the next 12 to 18 months is the secular growth areas around cloud and cybersecurity that are seeing eye-popping demand trends.
Consumers will still be stuck at home, meaning e-commerce will still be big winners in 2021 such as Shopify (SHOP), Etsy (ETSY), and MercadoLibre (MELI).
The reliance on e-commerce will open the door for more tech companies to participate in the digital flow of transactions and the U.S. will finally catch up to the Chinese idea of paying through contactless instruments and not cards.
This highly benefits U.S. fintech companies like Square (SQ) and PayPal (PYPL). Intuit (INTU) and its accounting software is another niche player that will dominate.
Intuit most recently bought Credit Karma for $8.1 billion signaling deeper penetration into fintech.
Since we are all splurging online, we need cybersecurity to protect us and the likes of Palo Alto Networks (PANW), Okta (OKTA), and CrowdStrike Holdings, Inc. (CRWD).
The side effect of the accelerating shift to digital and cloud are troves of data that need to be stored, thus anything related to big data will also outperform.
Most of the information created (97%) has historically been stored, processed, or archived.
As new mountains of digital gold are created, we expect AI will have an increasingly critical role.
I believe that 2021 will finally see the integration of 5G technology ushering in another wave of digital migration and data generation that the world has never seen before and above are some of the tech companies that will make out well.
The average household is using 38x the amount of internet data they were using ten years ago and this is just the beginning.
“I see little commercial potential for the Internet for at least 10 years.” – Said Co-Founder of Microsoft Bill Gates in 1993
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more