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 27, 2022
Fiat Lux
Featured Trades:
(GUIDE TO THE MAD HEDGE DAILY POSITION SHEET)
Mad Hedge Technology Letter
January 26, 2022
Fiat Lux
Featured Trade:
(MSFT DIGS US OUT OF A HOLE)
(MSFT), (AMZN), (GOOGL), (AAPL)
The 14% selloff year to date in tech shares finally met its match when Microsoft (MSFT) soothed us with its most recent quarterly performance.
It’s starting to feel like a broken record, but this world belongs to 5 large Silicon Valley tech companies and for the rest of the other few hundred publicly listed companies, we are just living in their world.
And it just so happens that if anybody or anyone is anointed as the savior to save this market from capitulating, it has to be the heavy lifters and we are getting validation from the strongest of cloud/enterprise companies.
Just as resonating, MSFTs positive quarter draws yet one more line in the sand for Mr. Market, offering us support and offering us evidence this could morph into a short-term bottom.
Even more salient, this is even deeper evidence that the software sector is the cream of the crop in tech and their strategic position is only getting stronger.
The thing that these guys have that is critical in today’s economic environment is tinged with inflation headwinds — pricing power.
Starting in March, Microsoft is pushing through an MSFT 365 price hike and consumers and businesses will see their monthly bill go up a few bucks.
According to Microsoft, those increases will apply globally with local market adjustments for certain regions.
And it’s not that 365 is MSFT's cutting edge division, it’s just another example of how MSFT can raise prices and consumers have no other choice but to comply because, at this point, 365 is a utility.
Sure, you can find a substitute, but it wouldn’t be as good of a product.
It was a record quarter, driven by the continued strength of the Microsoft Cloud, which surpassed $22 billion in revenue, up 32% year over year. We are living through a generational shift in our economy and society. Digital technology is the most malleable resource at the world's disposal to overcome constraints and reimagine everyday work and life.
Anyone who bet the ranch on the cloud and enterprise is happy they bet the ranch on it.
MSFT's earnings were just a giant confirmation of how tech won’t be knocked off its perch as the apex warrior, not only in the Nasdaq index but the broader market.
The stock market has been a tech market for quite a few years and that can’t be ignored or discounted.
Fundamentally, the foundations of profitable tech stocks have never been healthier, and they are extracting more of the pie than ever.
Then as we hear nonstop about the upcoming metaverse project and its entryways through gaming, MSFT is so on top of that new development that they will put all other companies to shame.
Granted, there are other heavyweights like Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL) that MSFT must take measures of to see if they are pushing ahead with something they are unaware of, but all is good is Redmond, Washington.
As data volumes and transactions increased over 100% year over year, MSFT has a grip on what’s going on and can quickly pivot to anything that’s worth it with its army of high-quality developers.
MSFT’s ubiquitous fingerprints are everywhere with even over 90% of Fortune 500 companies using Teams Phone this past quarter highlighting the deep penetration into the richest corners of corporate America.
My overarching point is that MSFTs products aren’t just a one-trick pony ala Facebook.
More than half of customers have four or more MSFT workloads, up 75% year over year, underscoring MSFTs end-to-end differentiation.
On a short-term trading basis, traders must adopt tech winners with robust balance sheets, and this must be looked at as a dealbreaker or deal winner of sorts.
In a world that is clamoring for quality tech names, it’s no time to allocate your hard-earned savings into Podunk technology.
Once the macro washout fades, pile into MSFT!
What I am saying is that there is a great deal of the market to plain out avoid, and don’t get caught up in those lemons.
“Culture eats strategy for breakfast.” – Said Microsoft CEO Satya Nadella
Global Market Comments
January 26, 2022
Fiat Lux
Featured Trades:
(TESTIMONIAL)
(A REFRESHER COURSE AT SHORT SELLING SCHOOL),
(SH), (SDS), (PSQ), (DOG), (RWM), (SPXU), (AAPL), (TSLA),
(VIX), (VXX), (IPO), (MTUM), (SPHB), (HDGE)
Mad Hedge Biotech and Healthcare Letter
January 25, 2022
Fiat Lux
Featured Trade:
(WHAT TO WATCH OUT FOR IN 2022)
(PFE), (BNTX), (AZN), (JNJ), (MRNA), (RHHBY), (RXRX), (TAK), (PSTX), (ZY), (DNA)
The past two years have been focused on finding solutions to end the COVID-19 pandemic.
More have been attempting to join Pfizer (PFE), BioNTech (BNTX), AstraZeneca (AZN), Johnson & Johnson (JNJ), and Moderna (MRNA) in sustaining and even boosting the momentum in terms of vaccine development and launch of new drugs in the market.
While the biotechnology and healthcare industry will still predictably have COVID-19 as one of its priorities, I can see a number of promising developments waiting to be unleashed to the public this year.
One is the expansion of mRNA applications to go beyond its potential as a coronavirus vaccine.
In the first three quarters of 2021, Moderna recorded $10.7 billion in sales for its mRNA vaccine while Pfizer-BioNTech raked in $39 billion—and these numbers are expected to soar even higher for 2022.
However, what’s more promising is that the pandemic revealed an undeniable and irrefutable fact: mRNA-based treatments could be administered safely and successfully to patients.
That discovery appears to have bolstered investor confidence in the technology, as an increasing number of RNA-based drug developers managed to lure hundreds of millions in terms of financing.
China’s Abogen Biosciences received over $700 million in its Series C round last August, while another RNA-focused biotech, Massachusetts-based Laronde, raked in $440 million in a Series B round during the same period.
Another technology on the rise is artificial intelligence (AI).
For years, AI has grown from science fiction tales to real-life applications. Lately, this segment has shown signs of finally coming up with a breakthrough.
In fact, something groundbreaking might arise in the healthcare world courtesy of Roche (RHHBY) and its Genentech subsidiary.
After all, these two became the talk of the industry in December 2021 when they committed roughly $12 billion in exchange for access to the revolutionary operating system of Recursion Pharmaceuticals (RXRX).
Ultimately, the collaboration aims to come up with advanced treatments—40 programs in total—for various conditions, focusing on neuroscience and oncology.
Aside from mRNA and AI, another sector that’s expected to rally this year is the cell and gene therapy segment.
So far, more capital has poured into this area and a growing number of programs are entering Phase 3 trials.
In the first six months of 2021 alone, gene therapy companies raised approximately $6.4 billion in funding and queued 376 trials.
This notably surpassed 2020’s performance, which recorded $2.2 billion and 359 trials.
By the second half of 2021, big money started to come in with billion-dollar partnerships cropping up everywhere.
These included Takeda Pharmaceutical’s (TAK) collaboration with Poseida Therapeutics (PSTX), worth roughly $3.6 billion, as well as Roche’s partnership with Washington’s Shape Therapeutics at $3 billion.
On top of these exciting breakthroughs is another exciting development: synthetic biology.
In the first six months of 2021, the synthetic biology segment attracted about $8.9 billion in venture funding.
To top it off, the sector managed to launch two successful IPOs last year: Zymergen (ZY) and Ginkgo Bioworks (DNA).
Considering the growing momentum in this field, synthetic biology is anticipated to remain on track and achieve full-scale marketing and manufacturing across many applications. These can span from essential medicines to even various foods such as dairy and meat.
Although the biotechnology and healthcare sector struggled in the past months, it’s undeniable that the market still has faith in the industry’s future and potential.
In fact, investors showered the biotechnology segment with a record-breaking $24 billion in terms of venture capital in the first three quarters of 2021, exceeding the $20 billion total generated in 2020.
Throughout the years, biotechnology has transformed from a restrictive academic enterprise into a booming industry with real-world applications.
Looking at the history and trajectory of this sector, I can say that the trend will continue into 2022 and beyond.
Mad Hedge Bitcoin Letter
January 25, 2022
Fiat Lux
Featured Trade:
(SELL THE SHORT TERM RALLIES)
(BTC), (ETH), (SHIB), (DOGE), (ADA)