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
October 20, 2021
Fiat Lux
Featured Trade:
(NETFLIX STILL ADDING VIEWERS)
(NFLX)
Netflix (NFLX) is reaching close to 1 billion TV fans globally with their content, and that can obviously generate a lot of virility for great pieces of content.
That being said, the content has to deliver. Yet that’s what Netflix has essentially done from the beginning, repeatedly offering world-class content that is consumed in nanoseconds.
If you think about the big picture, NFLX is at 213 million subscribers and that doesn’t make a dent compared to pay-TV households, ex-China.
But NFLX certainly believes they can match pay-TV households, and that aspiration signals plenty of room for growth.
Streaming is developing at a breathtaking pace, all kinds of devices and competitors helping that market grow, and it’s not just NFLX even though many of us live in a NFLX-centric world.
Then when I think about what’s out there in terms of competition — competition of content because NFLX doesn’t live in a vacuum.
Allowing to scale with this robust network and offering titles like Squid Game a chance to go viral really just signals overperformance for the NFLX business as a whole.
The most incredible part is the system that NFLX built from scratch that has turned into a highly distributed business model when it was NFLX’s Korean team two years ago that commissioned the hit show.
Just the synergy in that is great for NFLX, while really driving a narrative of a strong international audience that is digesting the Netflix content engine.
To that, I must give NFLX management credit for pushing hard into the content creation business and they have really made miracles happen up against the pandemic and all, but now with the team wrestling with the post-COVID, how do things move forward?
It all comes back to if NFLX can be that first choice in entertainment, then ultimately, that's what's driving that secular growth from linear to streaming entertainment and specifically NFLX’s platform.
The NFLX team recognized something that nobody else did and created an environment for that creator to make a great show.
They pretty much found the best content creators, handed them boatloads of cash, and said go make something kickass and they did.
Hollywood has been notorious for not only selling out but for micromanaging content creators and suffocating the creation process.
Clearly, when creative artists are not given the freedom to create, it negatively impacts the end-product, and that’s a pivotal reason linear television and Hollywood are now chasing NFLX.
NFLX is now the King of content going viral and going viral is really hard to predict, but it's super powerful when it happens, and they deliver the goods to be able to deliver that much viewing when viewers storm NFLX’s platform to consumer adjacent content that turns into binge-watching.
And you have people talk about it in ravenous terms that you can spoof it on Saturday Night Live because it's so in the zeitgeist.
Few companies in the world can accomplish that.
Now it’s not only Korea’s Squid Game, but NFLX is churning out the viral hits like with La Casa de Papel from Spain, with Lupin from France, with the film Blood Red Sky from Germany, from Sex Education in the U.K., where the stories of the world can increasingly come from anywhere in the world.
NFLX has systemized a way to build great hits.
Non-English content viewing has grown three times since NFLX started in 2008 making content.
Installing new storytellers into the world from everywhere in the world is supercharging the business model and that’s why we are experiencing a massive melt-up in NFLX shares.
“Often you have to rely on intuition.” – Said Founder and Former CEO of Microsoft Bill Gates
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
October 20, 2021
Fiat Lux
Featured Trade:
(THE HARD TRUTH BEHIND BUYING IN NOVEMBER)
(NOTICE TO MILITARY SUBSCRIBERS)
To the dozens of subscribers in Afghanistan, Somalia, and Iraq, and the surrounding ships at sea, thank you for your service!
I think it is very wise to use your free time to read my letter and learn about financial markets in preparation for an entry into the financial services when you muster out.
Nobody is going to call you a baby killer and shun you, as they did when I returned from Southeast Asia five decades ago. In fact, employers have been given fantastic tax breaks and other incentives to hire you.
I have but one request. No more subscriptions with .mil addresses, please. The Defense Department, the CIA, the NSA, Homeland Security, and the FBI do not look kindly on private newsletters entering the military network, even the investment kind, even ones from veterans like me.
If you think civilian spam filters are tough, watch out for the military kind! And no, I promise that there are no secret messages embedded with the stock tips. “BUY” really does mean “BUY.” “Sell” means “Sell” too.
If I did not know the higher-ups at these agencies, as well as the Joints Chiefs of Staff, I might be bouncing off the walls in a cell at Guantanamo by now wearing an orange jumpsuit.
It also helps that many of the mid-level officers at these organizations have made a fortune with their meager government retirement funds following my advice. All I can say is that if the Baghdad Stock Exchange ever becomes liquid, I'm going to own it.
Where would you guess the greatest concentration of readers The Diary of a Mad Hedge Fund Trader is found? New York? Nope. London? Wrong. Chicago? Not even close.
Try a ten-mile radius centered on Langley, Virginia, by a large margin.
The funny thing is, half of the subscribing names coming in are Russian. I haven't quite figured that one out yet.
Did we hire the entire KGB at the end of the cold war? If we did, it was a great move. Those guys were good. That includes you, Yuri.
So, keep up the good work, and fight the good fight. But please, only subscribe to my letter with personal Gmail, Yahoo, or Hotmail addresses. That way my life can become a lot more boring.
Oh, and by the way, Langley, you're behind on your bill. Please pay up, pronto, and I don't want to hear whining about any damn budget cuts!
I Want My Mad Hedge Fund Trader!
Mad Hedge Bitcoin Letter
October 19, 2021
Fiat Lux
Featured Trade:
(TRANSCENDING ITS COVID-19 VACCINE POTENTIAL)
(SNY), (PFE), (BNTX), (MRNA), (JNJ), (GSK)
Another day. Another COVID-19 vaccine could be out on the market.
Although hundreds of millions of individuals across the globe have already received their shots from approved vaccines of Pfizer (PFE) - BioNTech (BNTX), Moderna (MRNA), and Johnson & Johnson (JNJ), there are still several COVID-19 vaccine candidates undergoing late-stage testing.
This is important news for the companies.
After all, the COVID-19 vaccine market is projected to become a fundamental driver of share price growth.
From what we know about the virus so far, there is a huge possibility that people will need to be vaccinated annually at the very least.
If that’s the case, then the demand for COVID-19 vaccines yearly would reach roughly 8 to 10 billion doses. This could translate to sales between $80 billion and $100 billion.
The latest to potentially join the list is the joint candidate of Sanofi (SNY) and GlaxoSmithKline (GSK), which is anticipated for approval by the fourth quarter of 2021.
While Sanofi and GSK are practically a year behind their competitors, the high efficacy of their vaccine candidate—roughly 95% to 100%—makes them potential frontrunners in the near future.
Given that we can expect many competitors to enter the fray in the coming months, we can conservatively assume that Sanofi takes at least 3% to 5% of the market.
That would generate approximately $2.4 billion to $5 billion in annual revenue.
Since Sanofi holds a number of competitive advantages, such as solid experience in manufacturing and development and a strong geographical presence across critical markets, the company can ease out the competition.
Riding the momentum of the COVID-19 vaccines, particularly the mRNA candidates, Sanofi has been working with Seqirus to develop flu vaccines as well.
As the world struggles to deal with the effects of COVID-19, the more common flu isn’t receiving that much attention these days.
However, the impact of this disease worldwide is shocking: 3 million to 5 million people suffer from severe cases annually, with up to 650,000 individuals dying from the flu.
More alarmingly, a new flu strain spreads from animals and causes a pandemic every few decades.
The death toll associated with the flu becomes even more staggering when you think about the fact that we’ve been working on vaccines to get rid of its for eight decades now.
Despite the ongoing and long-term efforts, all flu vaccines available in the market are mediocre at best.
In fact, a flu shot is only effective within a single flu season. Moreover, its effectiveness is only within the range of 40% and 60%. There were even years when the number was as low as 10%.
Now, though, we might have a better shot at developing more effective flu vaccines thanks to the emergence of mRNA technology.
In theory, mRNA vaccines can trigger a stronger response from patients' immune system compared to the traditional flu vaccines.
To date, two companies are working on mRNA-based flu vaccines: Moderna and Sanofi.
Sanofi is collaborating with England-based vaccine developer Seqirus, with the two companies aiming for another mRNA flu test by early 2022. This will be in addition to the four flu vaccine candidates they have in the pipeline.
While the results for Sanofi’s flu vaccine efforts remain to be seen, experts are optimistic that it can drastically lower the number of deaths and severe cases annually.
For context, the most popular flu vaccine in 2018-19 flu season only had an efficacy rate of 29%.
Even with such low effectiveness, this vaccine prevents roughly 4.4 million flu cases in the United States alone. It also prevented 58,000 hospitalizations and 3,500 deaths.
Now, imagine how many lives a stronger candidate can save.
Although Sanofi appears to be late to the party in terms of its COVID-19 vaccine, the sheer efficacy of the company’s promising candidate with GSK makes it a powerful future contender as the leader of the pack.
Moreover, Sanofi is on the verge of resolving a pain point in the healthcare sector: the absence of a robust flu vaccine.
With its lineup of mRNA-based flu vaccine candidates, Sanofi is poised to discover potential game-changers in the industry and save millions of lives in the process.
Overall, Sanofi is a promising company sold at a reasonable price. More importantly, it prides itself on remarkable dividend history, paying and increasing dividends for 27 consecutive years.
Therefore, this dividend aristocrat is a good addition for investors on the lookout for quality and dependable stocks.
Mad Hedge Bitcoin Letter
October 19, 2021
Fiat Lux
Featured Trade:
(A MAJOR CATALYST FOR HIGHER BITCOIN PRICES)
(BITO)