Global Market Comments
January 13, 2021
Fiat LuxFeatured Trade:
(MY RADICAL VIEW OF THE MARKETS),
(INDU), (SPY), (AAPL), (FB), (AMZN), (ROKU)
What if the consensus is wrong?
What if instead of being in the 12th year of a bull market, we are actually in the first year, which has another decade to run? It’s not only possible but also probable. Personally, I give it a greater than 90% chance.
There is a possibility that the bear market that everyone and his brother have been long predicting and that the talking heads assure you is imminent has already happened.
It took place during the first quarter of 2020 when the Dow Average plunged a heart-rending 40%. How could this be a bear market when historical ursine moves down lasted anywhere from six months to two years, not six weeks?
Blame it all on hyperactive algorithms, risk parity traders, Robin Hood traders, and hedge funds, which adjust portfolios with the speed of light. If this WAS a bear market and you blinked, then you missed it.
It certainly felt like a bear market at the time. Lead stocks like Amazon (AMZN), Apple (AAPL), Facebook (FB), and Alphabet (GOOGL) were all down close to 40% during the period. High beta stocks like Roku (ROKU), one of our favorites, were down 60% at the low. It has since risen by 600%.
It got so bad that I had to disconnect my phone at night to prevent nervous fellows from calling me all night.
In my experience, if it walks like a duck and quacks like a duck, then it is a bear. If true, then the implications for all of us are enormous.
If I’m right, then my 2030 target of a Dow Average of $120,000, an increase of 300% no longer looks like the mutterings of a mad man, nor the pie in the sky dreams of a permabull. It is in fact eminently doable, calling for a 15% annual gain until then, with dividends.
What have we done over the last 11 years? How about 13.08% annually with dividends reinvested for a total 313% gain.
For a start, from here on, we should be looking to buy every dip, not sell every rally. Institutional cash levels are way too high. Markets have gone up so fast, up 12,000 Dow points in eight months, that many slower investors were left on the sideline. Most waited for dips that never came.
It all brings into play my Golden Age scenario of the 2020s, a repeat of the Roaring Twenties, which I have been predicting for the last ten years. This calls for a generation of 85 million big spending Millennials to supercharge the economy. Anything you touch will turn to gold, as they did during the 1980s, the 1950s, and well, the 1920s. Making money will be like falling off a log.
If this is the case, you should be loading the boat with technology stocks, domestic recovery stocks, and biotech stocks at every opportunity. Although stocks look expensive now, they are still only at one fifth peak valuations of the 2000 market summit.
Let me put out another radical, out of consensus idea. It has become fashionable to take the current red-hot stock market as proof of a Trump handling of the economy.
I believe the opposite is true. I think stocks have traded at a 10%-20% discount to their true earnings potential for the past four years. Anti-business policies were announced and then reversed the next day. Companies were urged to reopen money-losing factories in the US. Capital investment plans were shelved.
Yes, the cut in corporate earnings was nice, but that only had value to the 50% of S&P 500 companies that actually pay taxes.
Now that Trump is gone, that burden and that discount are lifted from the shoulders of corporate America.
It makes economic sense. We will see an immediate end to our trade war with the world, which is currently costing us 1% a year in GDP growth. Take Trump out of the picture and our economy gets that 1% back immediately, leaping from 2% to 3% growth a year and more.
The last Roaring Twenties started with doubts and hand wringing similar to what we are seeing now. Everyone then was expecting a depression in the aftermath of WWI because big-time military spending was ending.
After a year of hesitation, massive reconstruction spending in Europe and a shift from military to consumer spending won out, leading to the beginning of the Jazz Age, flappers, and bathtub gin.
I know all this because my grandmother regaled me with these tales, an inveterate flapper herself, which she often demonstrated. This is the same grandmother who bought the land under the Bellagio Hotel in Las Vegas for $500 in 1945 and then sold it for $10 million in 1978.
And you wonder where I got my seed capital.
It all sets up another “Roaring Twenties” very nicely. You will all look like geniuses.
I just thought you’d like to know.
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
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
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 Biotech & Healthcare Letter
January 12, 2021
Fiat Lux
FEATURED TRADE:
(DEFEATING GRIMMER REAPERS)
(PFE), (BNTX), (MRNA), (CVAC)
They say there’s always a light at the end of the tunnel, but what a very long tunnel we’re in right now.
More contagious strains of the SARS-CoV-2 have been discovered in the UK and South Africa, with these new variants threatening to make the situation worse before we even get the chance to try to make things better.
However, there’s still hope.
Just take another look at the leading vaccines developed in response to the COVID-19 pandemic and you’ll realize that we could be nearing the light at the end of this dark road.
In fact, the innovative solutions that emerged in 2020 could serve as beacons of light to illuminate the darker paths that the biotechnology and healthcare sector has been struggling with for decades.
The more we study the effects of the new vaccines, the more it becomes plausible that they could not only be used as weapons to fight off the 2020’s ultimate grim reaper, COVID-19, but also annihilate grimmer reapers like cancer.
Among the vaccine developers that launched their COVID-19 program, the technology used by Moderna (MRNA), Pfizer (PFE) – BioNTech (BNTX), and CureVac NV (CVAC) proved to be the most groundbreaking.
All these utilized the nucleic acids, more commonly known as RNA or mRNA, to create their COVID-19 vaccines.
Traditional vaccines are typically injected into the body to trigger an immune response, which would, later on, be useful in fighting off the live pathogen. The problem with this is that it requires so much time and exposes the vaccines to contamination.
In comparison, mRNA vaccines do not suffer from these setbacks. Basically, these vaccines instruct the body to replicate parts of the virus.
In the case of SARS-CoV-2, the mRNA vaccines tell our bodies to replicate the proteins wrapped around the virus. This way, the body gets to practice on the replicated proteins and prepare for the day when the actual virus shows up in the system.
By familiarizing the body with the genetic makeup of the deadly virus, the mRNA vaccines help us perfect the immune response for when the real thing attacks us—and therein lies the much bigger promise of this technology.
mRNA has the capacity to instruct our cells to create whatever protein necessary, which means it can be applied to fight off other diseases apart from COVID-19.
Researchers since the 1970s have been attempting to shed light on this technique but failed to get traction.
Due to the urgency caused by the pandemic, companies like BioNTech and Moderna have been given practically carte blanche of the funds to finally develop the mRNA vaccines and show the world not only how potent it could be but how quickly we can have it ready compared to more traditional processes.
Now, the technology is gaining more attention because it could finally be the cure to a myriad of diseases including cancer.
These days, we treat malignant tumors by zapping them with radiation or via chemicals. These methods tend to damage lots of surrounding tissues in the process.
Moderna and BioNTech have come up with a better idea.
Instead of blindly zapping in one general direction, they believe that each should be treated as a genetically unique tumor. Therefore, it would be more effective and less damaging to the patients if their immune systems are accurately programmed to attack specific enemies.
This is where mRNA comes in.
Once the antigen is identified, the scientists can determine its unique makeup or fingerprint.
Then, they can reverse engineer its entire cellular instructions to be able to come up with the blueprint that can help them develop an accurate plan on how to target the culprit.
Similar to how Moderna and BioNTech’s COVID-19 vaccines work, the body will then be conditioned to do the rest.
What’s more exciting is that these plans are no longer just ideas.
Both Moderna and BioNTech have been filling their pipelines with drug trials for cancer treatments of the skin, lung, breast, pancreas, prostate, and brain. They’ve been working on mRNA-based vaccines for a wide range of diseases as well including Zika, rabies, and even influenza.
The success of Moderna and BioNTech’s COVID-19 programs accomplished more than just giving the companies a marketable product. It turbo-charged decades-long processes.
Remember, it only took 11 months since the discovery of the SARS-CoV-2 virus for the UK and US regulators to declare that the mRNA vaccine for COVID-19 is not only safely tolerated by people but also effective.
Prior to this, no vaccine had been developed in less than four years. The approval period takes even longer.
That is, COVID-19 inadvertently led to the grand debut and definitive proof of concept of this much-awaited technology.
If you missed out on Moderna or BioNTech’s rally in 2020, buying on the dip is definitely a smart move now.
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
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
Global Market Comments
January 12, 2021
Fiat Lux
Featured Trade:
(MAD HEDGE 2020 PERFORMANCE ANALYSIS),
(SPY), (TLT), (TBT), (TSLA), (GLD),
(SLV), (V), (AAPL), (VIX), (VXX)
(TESTIMONIAL)