“Bitcoin is one of the most viral concepts I've ever encountered.” – Said CEO of Digital Currency Group Barry Silbert
Global Market Comments
March 3, 2022
Fiat Lux
Featured Trade:
(THE LAZY MAN’S GUIDE TO TRADING),
(ROM), (UXI), (BIB), (UYG),
(TESTIMONIAL)
Mad Hedge Technology Letter
March 2, 2022
Fiat Lux
Featured Trade:
(WHEN IT RAINS – IT POURS)
(TDOC), (ARKK)
Don’t get gaslighted by believing that growth companies now are at a discount and primed to shoot higher.
This couldn’t be further from the truth.
Honestly, this is just the beginning of a hard slog to prove to investors they are worth their time of day.
Once investors get a sniff of top-line growth capitulating, investors cash out in droves and try to not be the last one holding the bag.
In many cases, the latest rout in tech stocks has been far more crippling to investor portfolios than what we saw during the stock market collapse of February and March 2020, just after Covid was hyped around the world.
Fintech has been a sub-sector of tech that has been blinded by the light.
The collapse in PayPal shares has been swift and bloody.
From its March 2020 low, shares more than tripled over the next 15 months as usage and revenues soared. And then, just as quickly, the shares collapsed as fintech competition became crowded.
The digital payments specialist has now lost two-thirds of its value since its mid-summer 2021 all-time high. The extraordinary loss has been stark, but it epitomizes the current environment for growth tech.
If investors learned anything from the dot-com sell-off a generation ago, everybody rushes for the exit at the same time to rotate into more attractive companies.
Simply, "can’t miss innovation" are bid up like no other on the way up in a bull market with low rates. Conversely, they overshoot to the downside in a bear market with rising rates.
Growth tech is going to have to shake off this stereotype if they want to perform in this new normal environment.
That’s not to say these are worth nothing, but there is always a time to shine and a time to rain.
Unfortunately for remote medical services company Teladoc (TDOC), it is time for the latter, which is why I strapped on a bear put spread with a 16-day horizon that TDOC will not rise above $79.
If anything, the case for best of breed is getting stronger, such as the likes of Microsoft (MSFT), Apple (AAPL), Alphabet (GOOGL).
On the trading front, we took profits on a bear put spread last month on TDOC with a February expiration after the omicron virus peaked in the short-term, meaning that no incremental investor would be interested in buying TDOC in the short term.
TDOC is part of a bigger tech growth portfolio helmed by Cathie Wood's ARKK Invest, and that portfolio has gotten slaughtered this year as Woods has no concept of market timing and indiscriminately buys tech at any price based on a zillion year time horizon.
She also said that she is seeing deflation two weeks ago in this market which is an outright breach of fiduciary duty to investors. Since her interview, Russia has invaded Ukraine and oil has spiked to $110 per barrel of crude.
Any novice investors should just wait for Wood to speak and then do the opposite, and there is in fact an ETF built for that very purpose.
TDOC is ARKK fund’s biggest holding, and they just underwent a relief rally as the market is betting that Jerome Powell will become more dovish. The latest rally is most likely a dead cat bounce.
This is a GOLDEN OPPORTUNITY to sell the hell out of TDOC, and ARKK funds for a no-brainer short-term trade of 16 days as the fresh inflation forecasts should start to trickle in and suppress growth tech again.
This is just the beginning of elevated inflation brought on by another foreign war, and the pockets of Americans are about to be hit by a wave of higher food and energy prices.
That spells trouble for underperforming growth tech and TDOC is the poster child for that.
Don’t buy this stock – if anything, sell the rallies like we are doing here. Growth tech is dead for the foreseeable future.
“Microsoft isn't evil, they just make really crappy operating systems.” – Said Finnish-American software engineer Linus Benedict Torvalds who is the creator Linux, Android, and Chrome OS
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
March 2, 2022
Fiat Lux
Featured Trade:
(TESTIMONIAL)
(HOW TO BUY A SOLAR SYSTEM),
(SPWR), (TSLA)
Mad Hedge Biotech and Healthcare Letter
March 1, 2022
Fiat Lux
Featured Trade:
(THE FUTURE OF SURGERY)
(ISRG), (MDT), (SYK), (ZBH), (JNJ)
The healthcare sector is one of the biggest and most intricate industries in the stock market.
It’s a multi-trillion dollar area that offers investors with virtually unlimited opportunities to build a life of financial freedom via sound long-term investing.
This industry has several quality stocks—businesses that offer to cure diseases, develop revolutionary medical devices and treatments, or even just to offer personal care items you purchase from drugstores.
One of the most lucrative sectors of the field is surgery.
Surgery dates back centuries and is one of the oldest practices in the field of healthcare and medicine. Thankfully, its technology has evolved since then.
The surgical robotics market is projected to expand exponentially, and ISRG is in a prime spot to reap the rewards from this impending growth.
So far, approximately 15% of surgeries are already conducted via robots, showing a massive room for expansion as the technology gains traction among the medical experts and patients.
Robotic assistants are gradually entering the mainstream market, opening another revenue stream. Overall, the anticipated market for this field is calculated to rise at a range somewhere from 9.5% to 19.3% from 2022 to 2032.
The growth won’t likely stop there considering the myriad of benefits that robotically assisted surgeries offer compared to traditional surgeries, such as shorter recovery periods and alleviated discomfort among patients.
These advantages make these systems attractive to healthcare providers, especially considering the way the technology optimizes the recovery process of their patients and delivers more precise and safe surgical results.
Today, one of the emerging leaders in this sector of the healthcare community is Intuitive Surgical (ISRG).
Basically, ISRG is a company that focuses on medical devices, specifically on minimally invasive robotic systems that perform surgeries. Its flagship platform is called the “Da Vinci” system.
To date, it has installed roughly 6,700, with revenue climbing by 12% annually over the past decade.
Since the launch of the da Vinci platform, ISRG has expanded at quite a rapid pace. Its revenue climbed from $1.8 billion in 2011 to $5.7 billion in 2021.
In terms of expanding its services, ISRG recently announced a new platform called Ion. This is a lung biopsy robot, which is projected to become yet another remarkable revenue stream for the company.
The more da Vinci units ISRG ships out, the stronger its competitive edge becomes.
Aside from raking in profits from their surgical robotic units, which typically cost roughly $500,000 to $2.5 million depending on the complexity of the machine, the da Vinci units require a considerable time investment to master its operation.
This leads to high switching expenses, which all but guarantees retained and returning clients for ISRG’s business.
To put this into context, system revenue for ISRG was recorded at $1.7 billion in 2021. This indicates that about 70% of its $5.7 billion total revenue came from recurring products and services.
Thus far, ISRG has been the dominant leader in this cutting-edge space in healthcare and has shown incredible growth since its IPO. More importantly, the company has an impressive cash flow and cash balance.
Moreover, ISRG is an industry leader. As with every company in this position, ISRG has captured the lion’s share of the market.
At this point, the company currently controls 80% of the market and is expected to increase this dominance as it continues to make headway.
Considering the massive potential of this market, it comes as no surprise that more and more companies are working to topple ISRG.
Other companies have already started introducing their own specialized robots.
Medtronic (MDT) launched a spine and brain robot, Stryker (SYK) created one for knee and hip replacement, and Zimmer Biomet (ZBH) introduced a competitor in the spine and knee procedures space. Even Johnson & Johnson (JNJ) entered the fray with its lung biopsy robot.
Overall, ISRG is a brilliant company.
It possesses technological superiority over its rivals and a virtual monopoly of a rapidly growing market. These factors make ISRG an excellent long-term healthcare stock to buy and forget.
Mad Hedge Bitcoin Letter
March 1, 2022
Fiat Lux
Featured Trade:
(WAR IS THE MAIN CATALYST)
(BTC), (TINA)
