May 2021

My May 12 Biweekly Strategy Webinar Q&A

Below please find subscribers’ Q&A for the May 12 Mad Hedge Fund Trader Global Strategy Webinar broadcast from Lake Tahoe, NV.

Q: Is it too risky to run a double position on the US Treasury Bond Fund (TLT)?

A: Absolutely not, if anything it’s now risky enough. You need to be running triple and quadruple short positions in the (TLT) and skipping all the other marginal trades out there.

Q: Where do I find the put LEAPS recommendations?

A: If you did not get the put LEAP recommendation as part of your regular Global Trading Dispatch service, just log in to the www.madhedgefundtrader.com website and do a search on put LEAPS. Our concierge members get many more LEAPS recommendations, and they get them earlier. I happen to have an opening now, provided you can afford $10,000 a year for the service.

Q: With the inflation numbers coming at 4.2% YOY, how does that affect our strategy?

A: It kills techs, gets them too much lower levels that are much more attractive, and you make a fortune on all of your US Treasury (TLT) shorts. That's the main goal of our strategy right now. In other words, it’s great news.

Q: Would you sell technology stocks here and wait for a bounce?

A: No, ideally you would have hedged last week, buying Invesco QQQ Trust NASDAQ (QQQ) and TLT put spreads, and that hedged all your losses in your technology portfolio. The next move is to take profits on your (QQQ) and bond (TLT) shorts and then go unhedged on your tech longs. This is how hedge funds are executing their barbell strategies.

Q: Is the (TLT) $130-$135 vertical bear put spread okay for September, or should I pay more for January?

A: I would go to January because, as you noticed, this market could enter a long sideways period that goes on for months, like we just had. If you have a September and we go into another one of those sideways moves, you’re going to be wishing you did January. You don’t have to pay much more for January, only a few cents and even then, you’re looking at a 100% return.

Q: Is Tesla (TSLA) under $600 a good buy?

A: It's even a better buy at $545, which is the double bottom low of the last selloff; so, I would wait for that. And then I would essentially not do the stock, but a $450 call spread to reduce your risk even further.

Q: I just entered the Freeport McMoRan (FCX) LEAPS today. Should I average in a lower price?

A: Absolutely yes, I don't think it drops much from here since everyone expects it to double. And if you have the 8- or 20-month LEAPS, the day-to-day price move isn’t very big, given how much the stock is moving. That's the great thing about LEAPS—it reduces the volatility of your portfolio because you have such enormous time value in these long-dated LEAPS. It's really good to have a couple of these in your portfolio, just to act as a sort of sea anchor to reduce volatility; and of course, the (TLT) and (FCX) are two of the best trades out there.

Q: Would you roll a losing position?

A: I do that maybe once a year, in extraordinary circumstances. I would rather take a short-term loss on Microsoft (MSFT) and if it drops $10 more, then I go back into the position. You never know when you get one of these huge selloffs and you can take the full 10% hit on these call spreads. Remember these are highly leveraged positions; they are leverage ten to one or more. When the stock moves even a little bit against you, you don't want leverage whatsoever. Better to get out of a small hole now than a much bigger hole later. But that's just me after 52 years of trading.

Q: The hedge fund legend Stanley Druckenmiller said the current Fed monetary policy puts the US dollar at risk of losing its reserve currency status. What do you think about this?

A: I’m totally in line with him on being short the dollar and short treasuries, but I don't think the dollar will lose reserve status in my lifetime. What would they replace it with? Anything you look at has far more problems with liquidity and stability than the US dollar. I literally have been asked this many times a year for the last 50 years, ever since the US went off the gold standard in 1972. The strongest reserve currency in the world has the strongest military, and as long as that’s true, the US dollar will not lose its reserve status. That has been true since the Roman Empire. In fact, you still find Roman coins floating around.

Q: When do we stop out of Delta (DAL)?

A: When we break 43. Very simple. You break your first strike price at $43.00 and you are out of there, losing about $800 on the position, which is our hard and fast stop loss rule. Never let emotion into the equation. Stop losses should be automatic and mechanical.

Q: What do you think of Nordstrom (JWN)?

A: I think they were close to bankruptcy, but I'm looking at the higher end retailers to make a recovery. While the bricks and mortar were shut down, they did develop pretty big online businesses. That's true for Macy’s (M), Kohls (KSS) and a lot of the other businesses that survived the pandemic.

Q: Is Mastercard (MA) better than Visa (V)?

A: All three credit card companies are more or less six of one and half a dozen of the other. So, buy all three if you’re not sure. American Express (AXP) has more exposure to business travel, so if you’re looking for a business travel recovery, that's the one you want to own.

Q: Is it too late to get into (TLT) LEAPS today?

A: I think it is kind of late for the short term. We have dropped $5.00 since I put this thing out on Friday, and I would rather let it wait and fall two more points and then rally five points and then put more on. You should sell the next rally peak, wherever that is, even if we start from $130. You can even do in the money LEAPS, like a $135-$140 (TLT) going out to January—the profit on that is still well over 50%. So even today returns are very high on that position.

Q: Would you buy more Palantir (PLTR) on the recent dip?

A: Yes, but only if you have a long-term view. The CEO said he could care less about the stock price, and when CEOs say that, the stock sells off huge. If the CEO doesn't care about the stock, then nobody else does either. I think their business model is interesting for the long term and I think eventually some kind of tech rally will take it back up. That is not now.

Q: Is First Solar (FSLR) a buy?

A: We’re getting into buy territory. They had a monster 4X rally off the bottom last year. But the entire green sector got wildly overbought by February and was then dragged down with the rest of the tech selloff. I think solar is going to have a major long-term bull market. Look to buy for the long term. It’s not in call spread or LEAP territory for me yet, but it will be. Another good one to buy is SunPower (SPWR).

Q: Do you have several different subscriptions? How do I find out about them?

A: Yes, go to the www.madhedgefundtrader.com store. We have services that go from free all the way up to $10,000 a year. Just pick one that suits your level of experience, risk tolerance, and the amount of capital you have to work with.

Q: How do I get trade alerts?

A: Email customer support at support@madhedgefundtrader.com , send them your cell number and they will set you up with the trade alert service which goes straight to your phone.

Q: How do existing subscribers get a price break on your other subscriptions?

A: You make so much money trading from your existing service, that you never have to ask a price on anything again. JP Morgan once said that “If you have to ask the price of a yacht you don’t need to know.

Q: I’m doing extremely well in the Invesco Currency Shares Australian Dollar Trust (FXA) that you recommended a year ago.

A: Yes, you and everyone else who believed my story. Australia is a call option on a global economic recovery with all its commodity exports like iron ore and natural gas. My target is $100 in two years.

Q: Should I buy the US dollar (UUP) or wait for another down move?

A: I wouldn't touch it with a 10-foot pole. I think the move down in the dollar is a 10-year event that we’re one year into. By the way, currencies do go down for decades at a time because it will take that long to cut back our borrowing and start paying back some of the principle. That is a long way off.

Q: If Bitcoin drops do tech stocks drop as well?

A: I don't think there's that much of a correlation between Bitcoin and tech stocks. Tech stocks have major valuation support about 10% down and for sure 20% down. That gets you a price-earnings multiple for the big tech stocks of only 18X, which was the low in the 2008 crash and the 2000 Dotcom crash. So major historical support at an 18X multiple Bitcoin has no technical or fundamental support whatsoever because there are no fundamentals, there are only charts.

Q: Do you think Chinese carmakers like Nio (NIO) and Xpeng Inc. (XPEV) will ever catch up with Tesla?

A: No, never. China has never been able to reach the safety standards necessary to export cars to the US. They've been making electric cars in China longer than Tesla has. I was visiting electric car factories in China around 2007-2008, and they just can’t get the quality up. In the meantime, Tesla is moving ahead at warp speed, so I don't see a risk to them.

Q: I have a big position in Clorox (CLX) that I’ve made a lot of money on; should I sell it?

A: Yes, you’ll never get more reasons to buy Clorox at a great price than in a pandemic. There's actually a shortage of Clorox right now. So yes, take profits on (CLX).

Q: Would you buy Kathy Wood’s Ark Innovation ETF (ARKK) right here today?

A: No, I think we have more interest rate rallies to go and more tech selloffs to go. I would wait and buy it with ten-year US Treasury yields at 2.00%. I would rather be buying this on the way up and averaging up, than buying on the way down and averaging down.

Q: How will stocks be affected at 2.00% yields in the ten-year?

A: I think what happens is we run up 2.00%, bonds collapse, and then it stops. And when it stops and starts to pull back from 2.00%, then you get a new rally in the stock market, especially in technology stocks.

Q: Is it a good idea to hold 30-year US treasury bonds?

A: It's a terrible idea. I would be selling short US Treasury bonds up the wazoo—especially the 30 year which has the greatest price sensitivity to a move up in interest rates.

Q: Should we buy put LEAPS on oil (USO) and energy (XLE)?

A: Yes but not yet; as long as you have a red hot economy in the short term, you don’t want to be shorting anything in energy. Next year, however, may be a different story. The economic growth rate will start to slow down, oil demand starts to slow down, and the rate of replacement of gasoline cars by EV’s accelerate with all the new production. So that's next year’s trade, not this year’s trade, but it’s a good idea.

Q: When the Volatility Index (VIX) hits $30, what would be your first choices to pick up?

A: I would go for all the domestic recovery, interest rate, and industrial plays that have been working so well this year. They will continue to lead the market until we get a major reversal down in interest rates.

Q: When do I buy semiconductor stocks (SOX)?

A: When the rest of tech bottoms out and starts its way back up. It’s better to average up than average down.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, then WEBINARS, and all the webinars from the last ten years are there in all their glory.

Good Luck and Stay Healthy

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

May 14, 2021 - Quote of the Day

Diary, Newsletter, Quote of the Day

“Send us your freaks,” said an Amazon human resources executive
to a temp agency during its early days.

May 13, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
May 13, 2021
Fiat Lux

FEATURED TRADE:

(THE HOLY GRAIL OF DIABETES)
(NVO), (LLY), (SNY), (BNTX), (CRSP), (EDIT), (NTLA)

The Holy Grail of Diabetes

Biotech Letter

Diabetes and obesity continue to be two of the major health issues across the globe—and these problems are only getting worse.

There are about 463 million people worldwide afflicted with diabetes, with only half of this number actually diagnosed and even fewer seeking treatment.

This situation is alarming considering that diabetes is a major cause of diseases like heart attacks, stroke, blindness, kidney failure, and even amputation of the lower limb.

The key to handling diabetes for many diabetics is taking insulin, which is a hormone that aids in regulating the amount of glucose in the patient’s blood.

To date, only 16% of diabetics take insulin.

Interestingly, there are only a handful of producers of this drug despite the fact that the global spending for insulin is estimated to reach $28 billion by 2026.

Only three companies practically control over 90% of the insulin market. That dominance, along with the absence of generic competition, allowed them to generously reward their shareholders.

Currently, one company is dominating the insulin market and holds a virtual monopoly of this lucrative industry: Novo Nordisk (NVO).

In fact, Novo Nordisk shares have increased by over 2,500% since 2000—an honest to goodness wealth-building investment.

For years, Novo Nordisk has focused on developing products specifically for diabetes and obesity.

Thanks to its efforts in these sectors, the company has become the undisputed leader with a 44.5% share of the insulin market and a 49.9% share of the blood sugar drug GLP-1 market.

In 2018 alone, Novo Nordisk generated roughly $14.26 billion in revenue from its diabetes lineup.

In comparison, the second largest producer of these products, Eli Lilly (LLY), generated only $9.71 billion.

Meanwhile, the third challenger in this space, Sanofi (SNY), began its exit from the diabetes industry when the pandemic struck last year.

At this point, Novo Nordisk holds 29.2% of the global diabetes market, making the company within arm’s reach of its goal to conquer one-third of the segment by 2025.

Amid its success in the industry, Novo Nordisk refuses to rest on its laurels. The company continues to come up with innovative treatments for diabetes and obesity.

Novo Nordisk’s latest product is Rybelsus, which is an oral medication for blood sugar, particularly for Type 2 diabetes patients.

In an effort to corner the market, Rybelsus is actually a direct competitor of Novo Nordisk’s own products, Ozempic and Victoza, which target the same market. The difference is that the new product can be taken orally while the two older ones need to be injected into the bloodstream.

When Ryblesus was launched in late 2020, it was hailed as the “holy grail” of diabetes treatments and generated $64.5 million in the first six months.

To understand the potential of Rybelsus, it’s good to remember the growth story of Ozempic.

From $264 million in sales in 2018, this drug skyrocketed to rake in $1.7 billion by 2019 and generated $1.1 billion in the first half of 2020.

Although diabetes clearly holds the bulk of Novo Nordisk’s portfolio, it’s not the sole revenue stream for the company.

In the past years, Novo Nordisk has also been developing treatments for chronic obesity—a condition that could lead to serious diseases, including various types of cancer and heart disorders.

Global obesity has roughly tripled since 1975, with the COVID-19 pandemic accelerating this alarming trend.

For context, 1.9 billion adults were diagnosed as overweight in 2016. Of these, 650 million were considered obese.

More alarmingly, only 2% of 650 million people suffering from obesity are receiving any medical treatment.

In relation to Novo Nordisk’s revenue stream, this offers notable potential for future revenues for the segment.

The company’s flagship obesity drug, Saxenda, has shown extremely strong growth in terms of market share as well as total revenue since its launch.

With incredible attention focused on groundbreaking treatments for diabetes like messenger RNA from companies like BioNTech (BNTX), CRISPR Therapeutics (CRSP), Editas Medicines (EDIT), and Intellia Therapeutics (NTLA), it’s understandable to find a company established in the 1920s extremely boring.

However, it’s important to always keep in mind what investing is truly about. It’s distributing your money to businesses that have the capacity and potential to grow over the long term.

This is what sets apart companies like Novo Nordisk.

Historically, Novo Nordisk has been giving back to its shareholders for decades.

Since it debuted in the US market in 1981, the company has returned roughly 22,000% to its investors.

Four decades later, shareholders can rest easy and expect continuous rewards in the years to come. So, take advantage of this opportunity and buy the dips.

Trade Alert - (SPY) May 13, 2021 - BUY

Trade Alert

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

May 13, 2021

Diary, Newsletter, Summary

- Global Market Comments
  May 13, 2021
  Fiat Lux
  
  Featured Trade:
- (LEVERAGING UP WITH THE “COPPER SHOCK”)
  (FCX), ($COPPER)

Leveraging Up With the "Copper Shock"

Diary, Newsletter

If you’re wondering what to buy on this dip, take a very hard look at Freeport McMoRan (FCX) LEAPS.

We are getting to the point where great equity trades with potentially huge returns are becoming few and far between. At the very least, they are only a fraction of the opportunities we saw a year ago, which was a once-in-a-century event.

So, when your trade of the century runs out, what do you do?

You find another trade of the century!

It just so happens I have another such animal.

You are all well aware of the cyclical bull market in base commodities and the coming “copper shock.”

How would you like to make a ton of money on this, a lot more, like three times more?

I have been dealing in the front-month options so far and managed to catch a 10X move in the shares of Freeport McMoRan (FCX). I think (FCX) shares could double from here. Here is how to maximize your profits.

Simply extend your maturities and lower your strike prices through LEAPS, or Long-Term Equity Anticipation Securities.

I’ll show you how to do that, first with a conservative position, and then a much more aggressive one. Better yet, an excellent entry point for both positions is close.

The case for higher copper prices is overwhelming.

Sounds like a great long to me.

Currently, LEAPS are listed for the (FCX) all the way out until January 20, 2023.

However, the further expiration dates will have far less liquidity than near-month options, so they are not a great short-term trading vehicle. That is why entering limit orders in LEAPS only, as opposed to market orders, is crucial.

These are really for your buy-and-forget investment portfolio, defined benefit plan, 401k, or IRA.

Because of the long maturities, premiums can be enormous. However, there is more than one way to skin a cat, and the profit opportunities here can be astronomical.

Like all options contracts, LEAPS gives its owner the right to "exercise" the option to buy or sell 100 shares of stock at a set price for a given time.

LEAPS have been around since 1990, and trade on the Chicago Board Options Exchange (CBOE).

To participate, you need an options account with a brokerage house, an easy process that mainly involves acknowledging the risk disclosures that no one ever reads.

If LEAPS expires "out-of-the-money" by the expiration date, you can lose all the money you spent on the premium to buy it. There's no toughing it out waiting for a recovery, as with actual shares of stock. Poof, and your money is gone.

Note that a LEAPS owner does not vote proxies or receive dividends because the underlying stock is owned by the seller, or "writer," of the LEAPS contract until the LEAPS owner exercises.

Despite the Wild West image of options, LEAPS are actually ideal for the right type of conservative investor.

They offer vastly more margin and more efficient use of capital than traditional broker margin accounts. And you don’t have to pay the usurious interest rates that margin accounts usually charge.

And for a moderate increase in risk, they present hugely outsized profit opportunities.

For the right investor they are the ideal instrument.

So, let’s get on with my specific examples for the (TLT) to discover their inner beauty.

By now, you should all know what vertical bull call debit spreads are. If you don’t, then please click here for my quickie video tutorial (you must be logged in to your account).

Warning: I have aged since I made this video.

Today, the (FCX) is trading at $42.86

The cautious investor should buy the (FCX) January 2022 $45-$50 vertical bull call debit spread for $1.65. Some 60 contracts get you a $10,000 exposure. This is a bet that (FCX) will rise above $50 in eight months. Sounds like a total no-brainer, doesn’t it?

expiration date: January 21, 2022

Portfolio weighting: 10%

Number of Contracts = 60 contracts

Here are the specific trades you need to execute this position:

Buy 60 January 2022 (FCX) $45 calls at………….………$7.00
Sell short 60 January 2022 (FCX) $50 calls at……….…$5.40
Net Cost:………………………….………..………….…..............$1.60

Potential Profit: $5.00 - $1.60 = $3.40

(60 X 100 X $3.40) = $20,400 or 104% in eight months. In other words, your $10,000 investment turned into $20,400 with an almost sure thing bet.

This is a bet that the (FCX) will stay above $50 by the January 21 option expiration in eight months.

Let’s say that you’re so convinced that exploding copper prices will cause the (FCX) to crash again that you’re willing to take on more risk and place a bigger bet.

Here is your dream trade:

Buy the (FCX) January 2023 $55-$60 vertical bull call debit spread for $1.00. Some 100 contracts get you a $10,000 exposure. This is a bet that (FCX) will rise above $60 in 20 months.

That’s what you would expect to see during a normal economic recovery. This is the greatest economic recovery of all time.

expiration date: January 20, 2023

Portfolio weighting: 10%

Number of Contracts = 100 contracts

Here are the specific trades you need to execute this position:

Buy 100 January 2023 (FCX) $55 calls at…………...………$7.50
Sell short 100 January 2023 (FCX) $60 calls at…..………$6.50
Net Cost:………………………….………..………….…................$1.00

Potential Profit: $5.00 - $1.00 = $4.00

(100 X 100 X $4.00) = $40,000 or 50.00% in 20 months. In other words, your $10,000 investment turned into $40,000 with an almost sure thing bet.

This is a bet that the (FCX) will stay above $60.00 by the January 20, 2023 options expiration in 20 months.

Why do a call spread instead of just buying the $50 calls outright?

You need a much bigger upside move to make money on this trade. By paying only $1.60 instead of $6.00 for a position you can quadruple your size, from 15 to 60 contracts for a $10,000 commitment. That quadruples your upside leverage on the most probable move in the (FCX), the one from $45 to $50.

That’s what real hedge funds do all day long, find the most likely profit and leverage up on it like crazy.

Let’s do the math on the two positions. If you buy the (FCX) January 2022 $45-$50 vertical bull credit spread for $1.60, you reach a maximum value of $5.00 on expiration day at $50.

If you buy the (FCX) January 2022 $50 calls outright, at $50 on expiration day your position is worth zero, nada, bupkiss. It gets worse. To make the same amount of profit as the spread the (FCX), or $20,400, it has to rise all the way to $53 to break even. Below that, you make more money than the spread, but at a quarter the rate.

How could this trade go wrong?

There is only one thing. We get a new variant on Covid-19 that overcomes the existing vaccines and brings a fourth wave in the pandemic.

In this case the (FCX) doesn’t rocket to $60 but collapses to $20 or more. We go back into recession. Both of the above positions go to zero. But if we get a fourth wave, you are going to have much bigger problems that your options positions.

So there it is. You pay you money and take your chances. That why the potential returns on these simple trades are so incredibly high.

Enjoy.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

And She’s Still on Her Learner’s Permit

May 13, 2021 - Quote of the Day

Diary, Newsletter, Quote of the Day

“If massive government spending was the secret to economic success, then Venezuela would be ruling the world. Massive government spending is no indicator of economic success,” said Charles Bobrinksoy of Ariel Investments.

May 12, 2021

Tech Letter

Mad Hedge Technology Letter
May 12, 2021
Fiat Lux

Featured Trade:

(THE EXPLODING PROGRAMMATIC AD SPACE)
(TTD)

The Exploding Programatic Ad Space

Tech Letter

Annual advertising budgets are often being reset and reconsidered in Q1, but as the economy is roaring back, digital ad deliverers are set to make hay.

The Trade Desk (TTD) specializes in programmatic ad buying.

What is it?

It’s the deployment of software to buy digital advertising.

Previously, the traditional way included requests for proposals, tenders, quotes, and human negotiation, but programmatic buying uses machines and algorithms to purchase display space.

Humans now have more time for the optimization and evolution of ads.

Ad agencies will always need to optimize advertising to meet consumers’ needs on a deeper level.

Programmatic-centric software will deliver a better set of tools to plan, optimize and target advertising effectively.

Since TTD doesn’t make anything physical, margins are usually a lot higher and that certainly showed with Q1 producing adjusted EBITDA of a record $70.5 million.

This Q1 record is on both an absolute basis and a percentage of revenue basis.

As TTD continues to grow and represent more large brands and a larger percentage of ad agencies' brands, they will continue to become an accurate bellwether for the open Internet and advertising spend.

When you consider their performance in the context of the health of the overall advertising industry, you can see how they continue to outperform the industry and gain market share.

WPP's GroupM predicts worldwide advertising revenue will increase 10% in 2021. Publicis Groupe's Zenith expects overall U.S. ad spending to rise 3.2% in 2021, following a drop of 5.4% last year. GroupM also predicts digital advertising will surge 14% to nearly $400 billion.

Almost all major content owners put more premium inventory online.

Today, TV providers are fighting for consumer attention and there is more competition than ever.

The gap in cost-adjusted efficacy between linear and Connected TV (CTV) has stayed strong. However, as advertisers embrace CTV to leverage data and relevance, the power of data-driven targeting is quickly becoming more apparent.

Only effective data-driven targeting can achieve the value sought after by advertisers.

In other words, TV advertisers now have a choice. They have the ability to differentiate between content across channels more than ever. And that's critical to a healthy and competitive CTV market.

Now just to put the CTV market scale in perspective, according to Omdia's latest research, there are now more than 200 million active Advertising-Based Video on Demand (AVOD) users in the U.S. alone.

By 2024, Omdia predicts that annual CTV advertising revenue will top $120 billion, outperforming subscription revenue by more than 20%.

More and more of the world's top advertisers are making programmatic buys a larger component of their upfront commitments.

Advertisers want more data-driven flexibility in TV advertising campaigns. They believe their digital buys should be a core element of their upfront commitment. And the networks are adapting to that demand.

Ultimately, this will lead to the development of a new programmatic forward market for CTV inventory.

Broadcasters are also applying the same innovation focus to the world of identity. Recently, TTD has announced collaborations with OpenAP and Blockgraph.

This discussion on identity is bigger than cookies. It's bigger than any company or any channel. Cookies are not present in CTV. However, a privacy-safe identifier for CTV will be a major factor in driving relevant ads and managing reach and frequency across apps, channels, and devices.

CTV needs this kind of approach in order to maintain pricing power in a way that helps fund the high quality content that has kept most consumers binge-watching during this pandemic.

The current TV content arms race cannot be financially sustained for providers or consumers without relevant ads.

UID or user ID number is the identification number of your user account.

Remember how UID works, consumers sign in once with their email address and then opt-in site by site, just once per site or app, or channel.

This is a significant improvement to the consumer Internet experience today, where intrusive toasts or cookie pop-ups appear on almost every premium content site and seemingly every time you go there.

It's a common ID that can be used by many different advertisers and publishers.

It often originates from publishers with existing sign-on systems.

Consumers can then engage with privacy settings and opt out directly from the services they know.

The Wall Street Journal reported 50 million UID authenticated users in the U.S. a couple of months ago.

There's no point in building walls around it. Brands will, over time, always gravitate to places where they can be deliberate and where they can measure ad impressions across channels.

There are some companies, mostly those with a dominant walled garden approach, that believe the Internet can be controlled by a few.

Then there's the rest who believe that an open, competitive Internet marketplace is the only real viable approach that preserves value and opportunity for all participants.

And that has meant that cord-cutting in linear or cable television has accelerated and that people are looking more and more at Internet-fueled TV.

Because there are also more apps than there have ever been, content discovery is tougher in CTV than it’s ever been.

TTD’s Q1 revenue was $220 million, a 37% increase from a year ago and TTD benefited from improvement in the digital advertising environment from both agencies and brands.

Video, which includes CTV, again, led growth during the quarter followed by audio.

While improving, the travel and entertainment verticals still lag compared to others, but both are showing signs of a rebound so far in Q2. There is still a massive recovery ahead in these segments and starting to see green shoots.

TTD estimates Q2 revenue to be between $259 million and $262 million, which would represent growth of between 86% to 88% on a year-over-year basis because Q2 last year was the nadir of TTD’s Covid problems to the ad buying industry.

That said, in the second half of 2021, TTD expects year-over-year total revenue growth rates to decelerate significantly on a sequential basis because comparable data will be hard to beat from Q3 and Q4.

This was the cue for a massive selloff in TTD shares.

Don’t forget that the 2020 U.S. Election produced a tsunami of ad buying in the 2^nd half of 2020.

The company is still firing on all cylinders, justifying the move from $160 in March 2020 to $950, but price action in shares is volatile.

The stock has pulled back to around $500 and has technical support at $450, I would look for an entry point around there if the broader market calms down.

ttd