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Mad Hedge Fund Trader

January 23, 2023

Jacque's Post

 

Sunday afternoon
January 22, 2023

Hello everyone,

Hope you all had a terrific weekend and make the most of the final few days of January. Can’t believe it’s already February next week.

A busy earnings week is coming up. Tesla, Microsoft, and Boeing have their numbers out this week. Maybe good news here will kick the market higher. And we also have the Fed policy meeting next week. The consensus seems to be a 0.25 or 0.50% interest rate move. We shall see.

Has anyone seen ‘Avatar: The Way of Water’? It’s become the third James Cameron movie to gross $2 billion. It doesn’t appeal to everyone. Not my cup of tea. All the technology seems to be the big drawcard and the storyline, which paints the U.S. military in a poor light.

Another mass shooting in the U.S. This time in Monterey Park in Los Angeles. 10 people lost their lives, and the gunmen killed himself as well. Before anything is ever done about guns in America, a lot of people will have to die. But mentally ill people having access to guns is extreme, to say the least.

And something else that is utterly outrageous is the fact that women do not have control over their own bodies. There are some states in the U.S. that ban women from having abortions even though their own life may be in danger. There are other states that ban women from having an abortion if the baby is deformed in any way or if the baby is the result of rape or incest. Women are very much controlled by the political system, which won’t be changing in a hurry in the near future.

Fingers crossed that the earnings this week are good.

Have a great week.

P.S. It is John’s birthday on Thursday, 26th January (Australia Day). 71 years young. Drop him a line and wish him well. He would appreciate it.

Cheers,

Jacque

If you change the way you look at things, the things you look at change. Wayne Dyer.

 

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Mad Hedge Fund Trader

Trade Alert - (BRKB) January 20, 2023 - EXPIRATION AT MAX PROFIT

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

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Mad Hedge Fund Trader

January 20, 2023

Tech Letter

Mad Hedge Technology Letter
January 20, 2023
Fiat Lux

Featured Trade:

(2023 IS THE YEAR FOR UBER)
(UBER)

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Mad Hedge Fund Trader

2023 Is The Year For Uber

Tech Letter

Uber (UBER) has been one of the greatest influencers of American culture in the last 10 years, but that doesn’t mean they laugh all the way to the bank - hardly so.

The unit economics have never made sense as they hopped from the first cash-burn taxi service to another cash-burn food delivery service.

As many know, profits matter in this brave new world of tech investing simply because zombie companies cannot roll over debt because of higher interest rates.

Just in the nick of time, Uber Chief Executive Dara Khosrowshahi seems to have saved the day.

He has a grand solution to finally get Uber to profitability.

Most know the largest expense to doing business is often wages.

Anyone who has run a real business, essentially the inverse of a German politician, understands that if there was some way and somehow to reduce the wage bill or other large expenses, profits would go up extraordinarily.

For Uber, the highest expense since its inception has been the taxi or food delivery guy driving around.

Now, Uber is working with automakers to design lower-cost electric vehicles tailored for its ride-hailing and delivery businesses, part of its effort to “electrify” or de-emphasize the drag of running a fleet with a flock of gas guzzlers.

Khosrowshahi said the company is working with manufacturers on vehicles optimized for city use, ferrying passengers and deliveries.

For ride-sharing, that includes cars with lower top speeds and with seating areas where passengers can face each other.

I’m surprised it took Uber management so long to do this but better late than never.  

Uber is considering smaller vehicles with two or three wheels and trunk space.

Such vehicles can get through traffic easier and have a much smaller footprint, both in terms of environmental but also traffic footprint than, let’s say, a car to go deliver groceries.

The announcement comes as Uber is working to convert the fleet of vehicles its drivers use to electric by 2030 in many parts of the developed world, and in some places like London by 2025.

Truth be told, they have made headway in profitability reducing the annual cash burn in the last three years from $8 billion to $6 billion and then just last year only $500 million of losses.

Uber needs a little more juice to finally break even and I do believe this initiative will do the trick.

However, the crystal clear next step is the path laid out recently by the behemoths like Facebook, Microsoft, and Google.

Uber should fire 75% of the engineering team and 100% of the sales team.

The brand largely sells itself and the brand is ubiquitous in every corner of the globe.

If Uber management goes for this low-hanging fruit, I easily see a double in this stock from today’s $25.

The lack of profitability has always been that one impossible nut to crack for Uber management and now that they are so close, why not close the deal?

The stock has been on a tear for the first 20 days of the year going from $25 to $30 today.

Shares are up another 4% today at the time of this writing and I believe readers need to buy the dip on this ride hailing stock as battered down tech stocks come back into play.

 

uber vehicles

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2023-01-20 15:02:412023-02-01 00:32:272023 Is The Year For Uber
Mad Hedge Fund Trader

Quote of the Day - January 20, 2023

Tech Letter

“Desperation sometimes drives innovation. Put the right people in the right places, and then you trust them to do the right stuff.” – Said CEO of Uber Dara Khosrowshahi

 

 

 

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Mad Hedge Fund Trader

Trade Alert - (WPM) January 20, 2023 - EXPIRATION AT MAX PROFIT

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

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Mad Hedge Fund Trader

Trade Alert - (GOLD) January 20, 2023 - EXPIRATION AT MAX PROFIT

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

https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2023-01-20 11:45:182023-01-20 11:45:18Trade Alert - (GOLD) January 20, 2023 - EXPIRATION AT MAX PROFIT
Mad Hedge Fund Trader

January 20, 2023

Diary, Newsletter, Summary

Global Market Comments
January 20, 2023
Fiat Lux

Featured Trade:

(WILL SYNBIO SAVE OR DESTROY THE WORLD?),
(XLV), (XPH), (XBI), (IMB), (GOOG), (AAPL), (CSCO), (BIIB)

CLICK HERE to download today's position sheet.

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MHFTR

Will Synbio Save or Destroy the World?

Diary, Newsletter

Some 50 years ago, when I was a biotechnology student at UCLA, a handful of graduate students speculated about how dangerous our work really was.

It only took us an hour to figure out how to synthesize a microbe that had a 99% fatality rate, was immune to antibiotics and was so simple it could be produced in your home kitchen.

Basically, a bunch of bored students discovered a way to destroy the world.

We voiced our concerns to our professors, who immediately convened a national conference of leaders in the field. Science had outpaced regulation, as it always does. They adopted standards and implemented safeguards to keep this genie from getting out of the bottle.

Four decades later scientists have been successful at preventing a “doomsday” bug from accidentally escaping a lab and wiping out the world’s population.

That is, until now.

In 2010, Dr. Craig Venter created the first completely synthetic life form able to reproduce on its own. Named “Phi X174,” the simple virus was produced from a string of DNA composed entirely on a computer. Thus was invented the field of synthetic biology, better known as “Synbio.”

Venter’s homemade creature was your basic entry-level organism. Its DNA was composed of only 1 million base pairs of nucleic acids (adenine, thymine, cytosine, guanine, and uracil), compared to the 3 billion pairs in a human genome. Shortly thereafter, Venter one-upped himself by manufacturing the world’s first synthetic bacteria.

The work was hailed as the beginning of a brave new world that will enable biology to make the same dramatic advances in technology that computer science did in the 20th century. Dr. Drew Endy of Stanford University says that Synbio already accounts for 2% of US GDP and is growing at a breakneck 12% a year. He predicts that Synbio will eventually do more for the economy than the Internet and social media combined.

You may recall Craig Venter as the man who first decoded the human genome in 2003. The effort demanded the labor of thousands of scientists and cost $3 billion. We later learned that the DNA that was decoded was Craig’s own. Some five years later, the late Steve Jobs spent $1 million to decode his own genes in a vain attempt to find a cure for pancreatic cancer.

Today, you can get the job done for $1,000 in less than 24 hours. That’s what movie star Angelina Jolie did, who endured a voluntary double mastectomy when she learned her genes guaranteed a future case of terminal breast cancer.

The decoding industry is now moving to low-cost China, where giant warehouses have been built to decode the DNA of a substantial part of humanity. That should soon drop the price to $100. It’s all about full automation and economies of scale.

This technology is already spreading far faster than most realize. In 2004, MIT started the International Genetically Engineered Machine Contest where college students competed to construct new life forms. Recently, a high school division was opened, attracting 194 entries from kids in 34 countries. Gee, when I went to wood shop in high school, it was a big deal when I finished my table lamp.

This will make possible “big data” approaches to medical research that will lead to cures of every major human disease, such as cancer, heart disease, diabetes, and more within our lifetimes. This is why the healthcare (XLV), biotechnology (XBI), and pharmaceutical (XPH) sectors have been top performers in the stock market for the past two years. It’s not just about Obamacare.

The implications spread far beyond healthcare. IBM (IBM) is experimenting with using DNA-based computer code to replace the present simple but hugely inefficient binary system of 0’s and 1’s. “DNA-based computation” is prompting computer scientists to become biochemists and biochemists to evolve into computer scientists to create “living circuit boards.” Google (GOOG), Apple (AAPL), and Cisco (CSCO) have all taken notice.

We are probably only a couple of years away from enterprising hobbyists downloading DNA sequences from the Internet and building new bugs at home with a 3D printer. Simple organisms, like viruses, would need a file size no larger than one needed for a high-definition photo taken with your iPhone. They can then download other genes from the net, creating their own customized microbes at will.

This is all great news for investors of every stripe, and will no doubt accelerate America’s economic growth. But it is also causing governments and scientists around the world to wring their hands, seeing the opening of a potential Pandora’s box. What if other scientists lack Venter’s ethics, who went straight to President Obama for security clearance before he made his findings public?

If we can’t trust our kids to drink, drive, or vote, then how responsibly will they behave when they get their hands on potential bioterror weapons? How many are familiar with Bio Safety Level 4 (BSL) standards? None, I hope.

In fact, the race is already on to weaponize synbio. In 2002, scientists at SUNY Stonybrook synthesized a poliovirus for the first time. In 2005, another group managed to recreate the notorious H1N1 virus that caused the 1918 Spanish Flu epidemic. Some 50-100 million died in that pandemic within 2 years.

Then in 2011, Ron Fouchier of the Erasmus Medical Center in Holland announced that he had found a way to convert the H5N1 bird flu virus, which in nature is only transmitted from birds to people, into a human to human virus. Of the 565 who have come down with bird flu so far, which originates in China, 59% have died.

It didn’t take long for the Chinese to get involved. They have taken Fouchier’s work several steps further, creating over 127 H5N1 flu varieties, five of which can be transmitted through the air, such as from a sneeze. The attributes of one of these just showed up in the latest natural strain of bird flu, the H7N9.

The World Health Organization (WHO) and the Center for Disease Control (CDC) in Atlanta, Georgia are charged with protecting us from outbreaks like this. But getting the WHO, a giant global bureaucracy, to agree on anything is almost impossible unless there is already a major outbreak underway. The CDC has seen its budget cut by 25% since 2010 and has lost another 5% due to the US government sequester.

The problem is that the international organizations charged with monitoring all of this are still stuck in the Stone Age. Current regulations revolve around known pathogens, like smallpox and the Ebola virus, that date back to the 1960s when the concern was about moving lethal pathogens across borders via test tubes.

That is, oh so 20th century. Thanks to the Internet, controlling information flow is impossible. Just ask Muammar Gaddafi and Bashar Al Assad. Al Qaida has used messages embedded in online porn to send orders to terrorists.

Getting international cooperation isn’t that easy. Only 35 countries are currently complying with the safety, surveillance, and research standards laid out by the WHO. Indonesia refused to part with H5N1 virus samples spreading there because it did want to make rich the western pharmaceutical companies that would develop a vaccine. African countries say they are too poor to participate, even they are the most likely victims of future epidemics.

Scientists have proposed a number of safeguards to keep these new superbugs under control. One would be a dedicated sequence of nucleic acid base pairs inserted into the genes that would identify its origin, much like a bar code at the supermarket. This is already being used by Monsanto (MON) with its genetically modified seeds. Another would be a “suicide sequence” that would cause the germ to self-destruct if it ever got out of a lab.

One can expect the National Security Agency to get involved, if they haven’t done so already. If they can screen our phone calls for metadata, why not high-risk DNA sequences sent by email?

But this assumes that the creators want to be found. The bioweapon labs of some countries are thought to be creating new pathogens so they can stockpile vaccines and antigens in advance of any future conflict.

There are also the real terrorists to consider. When the Mubarak regime in Egypt was overthrown in 2011, demonstrators sacked the country’s public health labs that had been storing H5N1 virus. Egypt has one of the world’s worst bird flu problems, due to the population’s widespread contact with chickens.

It is hoped that the looters were only in search of valuable electronics they could resell, and tossed the problem test tubes. But that is only just a hope.

I have done a lot of research on this area over the decades. I even chased down the infamous Unit 731 of the Japanese Imperial Army that parachuted plagued infected rats into China during WWII, after first experimenting on American POWs.

The answer to the probability of biowarfare always comes back the same. Countries never use this last resort for fear of it coming back on their own population. It really is an Armageddon weapon. Only a nut case would want to try it.

Back in 1976, I was one of the fortunate few to see in person the last living cases of smallpox. As I walked through a 15th century village high in the Himalayas in Nepal, two dozen smiling children leaned out of second-story windows to wave at me. The face of everyone was covered with bleeding sores. And these were the survivors. Believe me, you don’t want to catch it yourself.

Sure, I know this doesn’t directly relate to what the stock market is going to do today. But if a virus escaped from a rogue lab and killed everyone on the planet, it would be bad for prices, wouldn’t it?

I really hope one of the kids competing in the MIT contest doesn’t suffer from the same sort of mental problems as the boy in Newton, Connecticut did.

 

 

 

I Think Woodshop Would Have Been Easier

 

Cause of the Next Bear Market, or the End of the World?

https://www.madhedgefundtrader.com/wp-content/uploads/2018/06/guy-in-hazard-suit-image-4-e1528386385723.jpg 380 250 MHFTR https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png MHFTR2023-01-20 10:02:082023-01-20 12:23:56Will Synbio Save or Destroy the World?
Mad Hedge Fund Trader

Quote of the Day - January 20, 2023

Diary, Newsletter, Quote of the Day

“It’s not like stocks are so compelling. It’s that there is nowhere else to put your cash. There’s a ton of capital coming in here. When it feels this easy, it’s usually time to be cautious,” said Barry Sternwood, CEO of the Starwood Capital Group.

 

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