November 2022

November 10, 2022

Jacque's Post

Thursday, 10th November 2022

Hello everyone,

Hope you are all doing wonderfully well.

First, let’s be thankful on Remembrance Day.

There is a lot to get through today, so let’s get straight to it.

John has updated his Long-Term portfolio.

Here it is in a nutshell:

ASSET CLASS

Energy 0%

Biotech & Pharmaceuticals 20%
Bristol Myers (BMY) 5%
Amgen (AMGN) 5%
Eli Lilly (LLY) 10%

Technology
Google (GOOGL) 5%
Apple (AAPL) 5%
Amazon (AMZN) 5%
Square (SQ) 0%

Banks 20%
JP Morgan Chase (JPM) 5%
Bank of America (BAC) 5%
Morgan Stanley (MS) 5%
Goldman Sachs (GS) 5%

International (Long Countries)
Alibaba (BABA) 0%
iShares MSCI Emerging Market ETF (EEM) 10%

Bonds
(SPDR) Barclays High Yield Bond ETF (JNK) 15%

Foreign Exchange
Aussie$ (FXA) 10%

Commodities
Freeport McMoran (FCX) 5%

Precious Metals
iShares Silver Trust (SLV) 5%

Agriculture 0%

==========================================================

ENERGY 0%
Healthcare 20%
Technology 15%
Banks 20%
International 10%
Bonds 15%
Forex 10%
Commodities 5%
Precious metals 5%
Agriculture 0%
Total 100%

Items in red have either been added or deleted recently.

Print this out and stick it on your fridge or on the wall in your office. It will remind you where to park your funds when we have a good entry point. We have had plenty of them recently.

Market rallies 1200 points today as light inflation data hits the airwaves. Even a sniff of lower inflation will get the market feeling jolly. But we can’t break out the champagne yet, I’m afraid. There are still challenges ahead.

It’s all gloom and doom in the house of FTX. There is a litany of reasons this company fell down the well. No board of directors, very poor management, in fact, no real management. Just a hope-for-the-best attitude thinking there would always be an endless pit of funds for anything and everything. Trading could be halted within days. At the time I am writing these withdrawals are still open. Binance offered to help in the bailout, but then quickly thought better of it. FTX has an $8 billion hole. No one would want to touch that in their right mind! Expect more regulation of crypto companies going forward after this mess. And expect cryptos to continue falling before the dust settles.

Next week, I will summarize John’s newsletter which looks at Ten Trends to Bet the Ranch On.

Have a fabulous weekend.

Cheers,

Jacque

P.S. Don’t forget to subscribe to my Post on John’s site. Complimentary period has ended.

If you set goals ridiculously high and it’s a failure, you will fail above everyone else’s success. - James Cameron

November 10, 2022

Diary, Newsletter, Summary

Global Market Comments
November 10, 2022
Fiat Lux

Featured Trade:

(TEN MORE TRENDS TO BET THE RANCH ON),
(AAPL), (AMZN), (GOOGL), (TSLA), (CRSP), (EDIT), (NTLA)

November 9, 2022

Tech Letter

Mad Hedge Technology Letter
November 9, 2022
Fiat Lux

Featured Trade:

(RISKY BUSINESS)
(ARKK), (SARK), (ROKU), (TSLA)

Risky Business

Tech Letter

Tech growth is a sub-sector that readers really need to stay away from right now.

It’s toxic for the time being.

We are still right in the middle of the Fed Funds rate hike cycle and the pounding has been relentless with former tech darlings breaking records for lower lows.

The poster child for the excesses in tech growth is Cathie Wood who is the CEO of ARK (ARKK) innovation funds.

She has completely ignored “market timing” and has used every brash sell-off to go big without doing much research.

This strategy has proven to be highly unsuccessful, as many of her top holdings like Tesla are again in free fall.

CEO of Tesla Elon Musk just sold $4 billion of stock to divert into his new company Twitter which lost a massive amount of advertising revenue when he took over.

Yesterday, crypto experienced an unbelievable meltdown when the 2^nd largest exchange FTX once valued around $35 billion was and still is on the brink of bankruptcy.

The same day Wood bet the ranch on crypto exchange Coinbase (COIN) adding 420,949 shares of COIN to the current 7.7 million that ARK Investment Management currently holds.

Bitcoin is down 13% at the time of this writing, representing yet another giant flop for Wood.

Wood is performing highly risky moves at the peak of turmoil in an industry that many think is a Ponzi scheme.

Her exploits are so infamous that it now has an inverse ETF that tracks the opposite of what she decides and performance has been stellar.

That ETF, called AXS Short Innovation Daily ETF (SARK), has soared more than 111% since launching a year ago. That’s the second best performance among the nearly 450 ETFs that launched over the past year.

Wood’s second biggest position is ad tech firm Roku (ROKU) which has gone from $460 to $48 today.

SARK’s first-year performance is among the 20 best of all-time measured against funds that are still trading.

Wood’s poor performance represents the pitfalls of choosing an investment adviser when they are one-dimensional and unable to acknowledge initial mistakes.

Instead of adjusting a flawed strategy, she has used it as the impetus to double down on a bad strategy.

The best hedge fund managers know when they are wrong and quickly reverse course or cut their losses.

Wood’s failures are quickly dealt with by blaming others, routinely saying that others “don’t do their research.”

Wood’s propensity to hype up tech like there is no tomorrow is now directly working against her.

She views any and every selloff as a brilliant entry point while ignoring broader market fundamentals.

In short, the day Cathie Wood is bearish is the day to go big into tech shares, because there are likely no more incremental buyers willing to hold the bag.

Truth be told, the Nasdaq currently sits 35% down from its November 2021 peak a year on.

I would call that pretty good, considering we are deleveraging from the biggest man-made financial bubble that was ever created in financial markets.

The bubble has caused the US Federal government to shoulder more than $31 billion of government debt that needs to be serviced with constant interest payments.

The only reason why tech shares are down 35% is because every investor believes the US Central Bank will kick the can down the road and save corporate America when push comes to shove.

This is precisely why recent bear market rallies have been epic, and any scintilla of interest rate loosening talk is met with thunderous buying.

If investors were more scared of the Fed, tech shares would be down at least 60% by now.

Quote of the Day - November 9, 2022

Tech Letter

“A.I. is probably the most important thing humanity has ever worked on.” – Said Alphabet CEO Sundar Pichai

November 9, 2022

Diary, Newsletter, Summary

Global Market Comments
November 9, 2022
Fiat Lux

Featured Trade:

(TESTIMONIAL),
(THE DEATH OF PASSIVE INVESTING),
(SPY), (SPX), (QQQ), (META), (UUP), (GLD), (INDU)

November 8, 2022

Jacque's Post

Tuesday morning
November 8, 2022

Hello everyone,

MID-TERMS TODAY…

Everybody has an opinion about who will win and why.

Everybody has an opinion on why Biden is no good (or great) for the county...

Everybody has an opinion on why Trump is no good (or great) for the country…

Social media is on fire with all sorts of rants about each candidate.

I just want to see facts…

Many Americans have become disillusioned with the whole social media environment as it fans the flames of fake news and misrepresentation.

Even the news itself is, in most cases, biased.

On Tuesday evening results will start to roll in.

Wednesday – mid-term results will be clearer and show the impact on the market.

Historically, markets have risen after mid-term elections, even in a recession, so there is no reason not to believe 2022 will be any different. There is also the fact that the election is now in the rear-view mirror and markets can breathe a sigh of relief.

Gridlock is a possibility in the political landscape. It is worth noting, however, that Ben Snider, a senior strategist from Goldman Sachs argues that “equity returns have generally been slightly stronger under divided governments than when one party has unified political control.” Big policy shifts are also difficult to pass under a divided government and we all know that the market likes certainty, so, again, we can think of the division as beneficial for the market.

Republicans have been favored to win control of the House, but the Senate looks like a toss-up that could come down to even a single race.

So, we will wait and see what happens…

Did anyone take a ticket in the $1.9billion Powerball jackpot?

What would you do with it if you won?

Here are some expert views.

Mark Cuban says if you take it as a lump sum, you could put some of it in a low-cost S&P 500 index fund and let it grow long-term. Cuban says index funds are relatively safe investments over time even for those who don’t know much about investing.

Another idea from Keven O’Leary is to put the cash into “low volatility, dividend-paying stocks. With a lump sum payout, you could take advantage of compound interest.

These are not bad ideas with any amount of money.

All the very best

Cheers

Jacque

"Your worth consists in what you are and not in what you have." - Thomas Edison

November 8, 2022

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 8, 2022
Fiat Lux

Featured Trade:

(A GROWTH STOCK POISED TO BREAK RECORDS)
(LLY), (JNJ), (NVDA), (MA), (PG), (NVO), (ABBV)

A Growth Stock Poised Break Records

Biotech Letter

The stock market has been down in the past couple of months, and the outlook still does not look all that good, considering that the issues with inflation and economic crises are showing no signs of ending anytime soon.

However, as Berkshire Hathaway Vice Chairman Charlie Munger noted, long-term investors should not be too anxious over “when” the markets will recover.

Instead, he advised “to think about ‘what’ will happen versus ‘when’” as a far more efficient way to behave in these challenging times.

Bearing that advice in mind, a particular biotechnology and healthcare stock stands out and is worth considering given its promising future: Eli Lilly (LLY).

Eli Lilly has grown at a fast pace and is considered among the most prominent pharmaceutical businesses in the world, ranking second behind Johnson & Johnson (JNJ).

At the moment, its market capitalization is at about $340 billion, making Eli Lilly more valuable than juggernaut Nvidia (NVDA) and other big names like Mastercard (MA) and Procter & Gamble (PG).

The most promising drug in Eli Lilly’s pipeline right now is Mounjaro, earlier known as tirzepatide, which recently received the green light from the Food and Drug Administration.

This once-a-week injection is an approved therapy that targets Type 2 diabetes. On top of that, Mounjaro can also be used as a potential weight loss drug.

While there are already existing diabetes drugs that double as weight loss treatments, mainly from Novo Nordisk (NVO), what makes Mounjaro distinct is the fact that it’s the first-ever unimolecular dual GIP/GLP-1 receptor agonist. In layman’s terms, this treatment could function in the same way as two completely different hormones that serve to control blood sugar levels.

Now, the question is: How significant an impact is Mounjaro on Eli Lilly?

Based on data from the National Institute of Diabetes and Digestive and Kidney Diseases, about 2 in every 5 adults are classified as obese, while 1 in 11 adults suffer from severe obesity.

That’s a substantial market. More than that, the consequences of obesity are said to have ripple effects throughout the entire healthcare industry.

In fact, the Centers for Disease Control and Prevention estimate the yearly medical costs in the United States due to obesity to be roughly $173 billion in 2019.

Following its approval, Mounjaro raked in $16 million in sales. Given its unique mechanism and the massive market it can target, Mounjaro is estimated to rake in $25 billion in peak revenue annually.

Moreover, this treatment could not only be a game changer for the company but also the entire healthcare community.

For context, Eli Lilly’s total revenue in 2021 from all its products combined was $28 billion. Needless to say, Mounjaro would put the company on track for some serious growth.

Looking at this weight loss and diabetes drug's trajectory and potential, Mounjaro can benefit Eli Lilly in the same way AbbVie (ABBV) maximized Humira. For years, Humira was hailed as the top-selling drug in the world.

While it’s set to lose its patent protection by 2023, there’s no doubt that this anti-inflammatory drug boosted the share price and bottom line of AbbVie.

Clearly, this is a business poised to become even more valuable soon. This means its current share price could be considered a bargain in the next few years.

How long it would take for Eli Lilly to make money off its pipeline remains a question mark. However, concentrating on “what” is most likely about to happen instead of “when” makes it easy to make a case for Eli Lilly being an excellent growth investment.