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 Technology Letter
February 3, 2021
Fiat Lux
Featured Trade:
($4,000 A DONE DEAL FOR AMAZON IN 2021)
(AMZN)
Amazon is highly likely to surge past $4,000 this year.
Like many other tech stocks, last March was a kick in the teeth that served up a quick correction.
But unlike a handful of sectors, investors saw their faith in Amazon rewarded when the stock reversed and roared to $3,500.
After a sharp spiral down off the March lows, as investors saw Amazon as a beneficiary of lockdown measures, the stock had been consolidating within a narrowing range over the past several months.
Traders have solid support levels at $3,100 and any trader should be buying AMZN at anything close to that.
The price action suggests that AMZN has a favorable chance to break up to the upside some point after what was a blowout fourth quarter results of net income of decisively more than the predicted $6.3 billion and revenue approaching $120 billion.
They outdid themselves and reported earnings of $14.09 per share on record revenue of $125.56 billion.
The e-commerce and technology titan went into its important holiday quarter report on a strong note and 2021 will be no different as features if the pandemic persists.
Just a quick rewind to the third quarter, revenue and earnings also easily beat consensus estimates, and Amazon perennially guides up. This is becoming a constant pattern with the stock boding well for the future stock price.
Investors like companies who constantly over-deliver on earnings metrics.
The biggest bombshell of yesterday’s report was clearly that Jeff Bezos, the company’s founder and CEO, would leave from his role in the third quarter of 2021.
I thought it was interesting that after-hour trading was largely indifferent as investors were digesting the founder leaving his creation.
Next on deck is Andy Jassy, who currently leads Amazon Web Services (AWS), and will take over Bezos’ job.
Bezos will stick around in an “executive chairman” role and I envision this as Bezos not really leaving and still handling all the “big vision” stuff.
Inside the company, Jassy is the highest profile candidate and part of the most profitable part of the company giving him major clout.
This is out of the same mold of Microsoft’s CEO Satya Nadella who was also promoted to the top via the cloud division.
Bezos will now have more time to spend on Day 1 Fund which is a non-profit organization that will launch and operate a network of high-quality, full-scholarship Montessori-inspired preschools in underserved communities.
Along with that, he will spend time with the Bezos Earth Fund, Blue Origin, The Washington Post while Jassy handles the daily grind of the operation.
Don’t forget that Bezos is the largest shareholder, but because Amazon has become quite heralded for grooming top-level management, the company won’t miss a beat with Jassy.
Just look at what Jassy did in the fourth quarter.
Amazon Web Service (AWS) grew revenue 28% to $12.74 billion. That year-over-year growth rate held roughly steady compared to the third quarter and is the U.S. market share leader in cloud web hosting.
AWS operating income grew even more strongly, jumping 37% to nearly $3.6 billion.
Awarding the best performing manager at a company is something good companies do.
The pandemic, in itself, was a major catalyst to take revenue growth higher and sales got a boost from the company's annual Prime Day event, which was pushed back to the fourth quarter this year from its usual place in the third quarter due to the global crisis.
This year could be a similar repeat of 2020 with consumers crazy for e-commerce services and Amazon, best of breed service.
This should be a buy on every small dip stock and simply the best company in the world right now whether examining tech or anything else.
“Our goal is not to build a platform; it's to be across all of them.” – Said CEO of Facebook Mark Zuckerberg
Global Market Comments
February 3, 2021
Fiat Lux
Featured Trade:
(THE THIRTEEN-YEAR ANNIVERSARY OF THE MAD HEDGE FUND TRADER)
The Diary of a Mad Hedge Fund Trader is now celebrating its 13th year of publication.
During this time, I have religiously pumped out 1,500 words a day, or eight double-spaced typed pages, of original, independent-minded, hard-hitting, and often wickedly funny research.
I spent my life as a war correspondent, Marine Corps combat pilot, wall street trader, and hedge fund manager, and if you can’t laugh after that, something is wrong with you.
I’ve been covering stocks, bonds, commodities, energy, precious metals, real estate, and agricultural products.
You’ve been kept up on my travels around the world and listened in on my conversations with those who drive the financial markets.
I also occasionally opine on politics, but only when it has a direct market impact, such as with the recent administration's economic and trade policies.
The site now contains over 13 million words or 14 times the length of Tolstoy’s epic War and Peace.
Unfortunately, it feels like I have written on every possible topic at least 100 times over.
So, I am reaching out to you, the reader, to suggest new areas of research that I may have missed until now which you believe justifies further investigation.
Please send any and all ideas directly to me at support@madhedgefundtrader.com/ and put “RESEARCH IDEA” in the subject line.
The great thing about running an online business is that I can evolve it to meet your needs on a daily basis.
Many of the new products and services that I have introduced since 2008 have come at your suggestion. That has enabled me to improve the product’s quality, to your benefit.
This originally started out as a daily email to my hedge fund investors giving them an update on fast market-moving events. That was at a time when the financial markets were in free fall, and the end of the world seemed near.
Here’s a good trading rule of thumb: Usually, the world doesn’t end. History doesn’t repeat itself, but it certainly rhymes.
The daily emails gave me the scalability that I so desperately needed. Today’s global mega enterprise grew from there. Today, the Diary of a Mad Hedge Fund Trader and its Global Trading Dispatch are read in over 140 countries by 24,000 followers. The Mad Hedge Technology Letter and the Mad Hedge Biotech & Healthcare Letter also have substantial followings. And Mad Hedge Hot Tips is one of the most widely read publications in the financial industry.
I’m weak in North Korea and Mali, in both cases due to the lack of electricity. But that may change.
If you want to read my first pitiful attempt at a post, please click here for my February 1, 2008 post.
It urged readers to buy gold at $950 (it soared to $1,920), and buy the Euro at $1.50 (it went to $1.60).
Now you know why this letter has become so outrageously popular.
Unfortunately, I also recommended that they sell bonds short. I wasn’t wrong on that one, just early, about eight years too early.
I always get asked how long will I keep doing this?
The government tells me that the latest I can start drawing down on my retirement funds and Social Security is 72. That’s some three years off for me.
Given the absolute blast I have doing this job, that is highly unlikely. Take a look at the testimonials I get on an almost daily basis and you’ll see why this business is so hard to walk away from (click here for those.)
In the end, you are going to have to pry my cold dead fingers off of this keyboard to get me to give up.
Fiat Lux (Let there be light).
"Great entrepreneurs see patterns where others see chaos," said Geoff Yang of venture capital firm Redpoint.
Mad Hedge Biotech & Healthcare Letter
February 2, 2021
Fiat Lux
FEATURED TRADE:
(2021: GILEAD SCIENCES’ YEAR OF MILESTONES)
(GILD), (NVAX), (JNJ), (MRK)
Stocks are tumbling on the back of substandard vaccine updates, with investors growing more wary of the whole COVID-19 vaccine narrative.
January ended with Novavax (NVAX) announcing that its COVID-19 vaccine candidate is roughly 90% effective, but doesn’t work as well against other more contagious strains in South Africa.
Johnson & Johnson (JNJ) reported that its candidate is only 66% effective at stopping moderate to severe strains of the coronavirus, but is 100% effective in preventing hospitalizations and even death 28 days after it gets administered.
However, the real kicker is Merck’s (MRK) decision to completely drop out of the COVID-19 vaccine race when both its candidates showed disappointing results in the early stages.
This is disappointing news considering that Merck is one of the biggest vaccine developers in the world today.
Nonetheless, Merck’s still not out of the COVID-19 race yet as it appears to be following the lead of Gilead Sciences (GILD) instead.
That is, it plans to focus on developing COVID-19 treatments in the hopes of benefiting from it the same way Gilead did in the past months.
Since the pandemic started, Gilead has been at the forefront of the fight – so much that its COVID-19 treatment, Remdesivir, is evidently having a major impact on the company’s top line.
In its third-quarter earnings report in 2020, Gilead reported $6.6 billion in total revenue, showing off a 17% jump from its performance during the same period last year.
If you exclude its COVID-19 sales, Gilead would have only earned $5.6 billion, with the increase in its year over year performance changing from 17% to just 2%.
As for its overall performance in 2020, Gilead announced that it’s raising its previous guidance from the $23 billion and $23.35 billion range to be somewhere between $24.3 billion and $24.35 billion.
This new guidance indicates a 10% year over year growth, but without Remdesivir, its product sales would actually show a slight decline compared to 2019.
Outside Remdesivir, Gilead has been active in searching for additional growth drivers.
So far, the most promising segment is its HIV lineup led by its top-selling product, Biktarvy, also known as "the gold standard in HIV treatment."
In the third quarter of 2020, sales of Gilead’s HIV line climbed by 8% to reach $4.5 billion.
While generic competition has entered the market, Biktarvy is expected to continue to gain steam in 2021.
Another catalyst in its HIV line is the drug Lenacapavir, which can either be developed as a twice-a-year injection or a weekly pill.
If successful, Lenacapavir can bring an additional $9 billion in revenue for Gilead.
Aside from HIV, Gilead has also been working toward becoming a leader in the oncology sector.
To achieve this, the company spent $21 billion for the acquisition of Immunomedics.
Specifically, Gilead bought the New Jersey-based company for its new breast cancer treatment, Trodelvy.
Gilead’s massive bet on Trodelvy raised a lot of eyebrows, but the product offers a very real chance for an enormous payoff for its shareholders.
Trodelvy lowers the risk of death among breast cancer patients by an impressive 52% when compared to those who receive standard care.
Annually, Trodelvy is estimated to rake in at least $1.8 billion in revenue for Gilead --- and that’s only for breast cancer application.
Gilead also intends to expand Trodelvy’s application to include more complex fields of oncology and even for some viral diseases.
Beyond its COVID-19 program, Gilead has an impressive portfolio of diverse assets that the company is focused on developing.
It currently has 42 clinical programs queued in its pipeline and at least a handful of these are anticipated to become steady sources of revenue.
As expected, it spent 2020 acquiring the necessary partners for its big picture plans, making 2021 a year of milestones for the company.
