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 18, 2023
Fiat Lux
Featured Trade:
(THE MORAL HIGH GROUND MANIFESTO)
(ABNB), (META), (VENTURE CAPITALISM)
Venture capitalist Marc Andreessen posted a manifesto, calling for “techno-optimism” and delivered quite a few bizarre ideas all under the idea that “we are being lied to.”
He starts out his rant by playing the victim as a man whose net worth has surged to around $2 billion and he also doesn’t tell us who is lying to us.
He articulates to his audience that “we are told that technology takes our jobs, reduces our wages, increases inequality, threatens our health, ruins the environment, degrades our society, corrupts our children, impairs our humanity, threatens our future, and is ever on the verge of ruining everything.”
That is quite the doomsday prognosis of technology and sounds like someone who spends too much time watching TikTok videos.
I believe that most US consumers have some idea that technology can be divided into the good, the bad, and the ugly.
Painting the concept of technology as all bad or all good is an attempt to play up the drama of his blog which isn’t quite dramatic.
One of the biggest takeaways from his blog is that Mr. Horowitz has minimal opportunities to communicate with normal American people and because of that, he doesn’t understand what is considered common sense.
Living in a bubble can be dangerous and group think becomes entrenches with the same narrow opinions swiftly rotating through a tight knit circle.
Laughably, Horowitz tries to take the moral high ground saying that “we believe that advancing technology is one of the most virtuous things that we can do.”
I believe he is only saying that because he will have skin in the game and if technology equals high morality, then it would be impossible for a man like Horowitz, in his position, to not double or quadruple his net wealth.
He even double downs on the moral high ground position by giving us a blockbuster quote of “we believe Artificial Intelligence can save lives.”
He, again, paints a sub-sector of technology into a save lives or die proposition.
Technology is more nuanced and it’s blatantly obvious that he is attempting to skew the narrative in which he sees fit so it benefits him.
Horowitz intentionally skips the possibility that AI could be used to kill people out of malice in terms of drones, killer robots, autonomous weapons, nuclear bombs, hypersonic missiles.
He arrives at the conclusion that “the only perpetual source of growth is technology.” Thus, we need this only perpetual growth to makes peoples likes better.
This quote only sounds like he is wants the world to believe that the world cannot function without him and his huge ego.
My opinion is that many of these billionaires have lost the real pulse of the nation and are living too much in an alternative reality that are occupied by other billionaires and their consensus ideas.
This blog almost sounded like a real estate agent telling a buyer that it is a great time to buy a house, even with 10, 20, 30% mortgage rates.
I do believe that technologists like him will never be able to re-establish the moral high ground for at least 2 or 3 generations.
The whole Facebook (META) connecting the world marketing ploy and Airbnb (ABNB) live next to your neighbor because we are all buddy buddy is gone and won’t come back soon.
Selling hopium is old news and I don’t believe the same guys who profited from Facebook will lead the technology innovation races in the next round.
The quality of their ideas has deteriorated and it’s clear that leading technologies like the iPhone is on its last legs.
This manifesto screams desperation. It’s also interesting that he didn’t even mention crypto which he’s a huge investor in.
It’s even more interesting that he is calling for no regulations on technology in which crypto would massively benefits. He intentionally stays away from that central topic.
Technology needs to be re-imagined and by a new set of fresh blood. The old guard has become stale and this manifesto is proof of their desperation that it might be hard for their old ideas to become accepted in a rapidly changing world. They want the era of zero rates to never end.
Andreessen Horowitz investments
As for me, I’ll record the Story of John Thomas’s Wild Ride, which took place only last Thursday.
We had just finished delivering the last of our food bags to starving peasants in the Kherson region, which is a 12-hour train ride east of Kiev. I received maybe 100 kisses and hugs from aging babushkas who had been cut off from their food supply for months. Most of their homes had been destroyed by Russian fire and they were living in basements.
They said, “Thank you.” I replied, “Stay strong.” They cried.
Then my army escort, a major who we called “Vitally”, got a call. A Russian mortar was harassing Kerson with intermittent fire inflicting casualties, and they were unable to spot it. Would we be willing to act as a decoy and draw fire? We would do this by leaving my iPhone 14 powered on whose signal the Russians could easily track and zero in on.
The major looked at me to ask permission. I was on a humanitarian mission and had no obligation to engage in combat. What did I think?
I did the math. A mortar is a notoriously inaccurate weapon, plus we’d be doing at least 80 miles an hour. I decided it was more likely that I win the California lottery than get hit. So I told the major “Sure, why not.” I looked at the rest of my team and they agreed wholeheartedly. So, we headed down to the waterfront in Kherson.
The city has this long street which follows the banks of the Dnieper River. The Russian Army occupies the eastern bank and are well fortified. Kherson was completely deserted without a person or vehicle in sight. It was like a ghost town. Every statue in town had been stolen when the Russians retreated. Once we turned north, we poured on the gas.
We raced along the river as fast as the car would go, weaving left and right to avoid shell craters in the road. Occasionally we hit one and our heads bumped up against the ceiling. We sped through every red light. It was the thrill of a lifetime!
As we approached the bridge over the Dnieper River, which had already been blown up, sure enough a mortar shell went sailing right overhead, hitting a building 100 yards to our left. Then we screeched to a halt, did a rapid 180, and tore off in the opposite direction. The Ukrainian Army’s 155 mm shells fired over our heads second later.
In a minute later we found a bomb shelter and jammed on the brakes. As we piled out of the car the air raid sirens were wailing. Once we got inside, we all burst into laughter. We couldn’t believe what we had just gotten away with.
And I got the whole thing on video.
Sitting in the bomb shelter I felt a stinging in my right hip. I looked down to find an AK 47 7.62mm copper jacketed bullet embedded in my flak jacket about an inch from the edge. When we left the bomb shelter, I inspected the car and sure enough we had been sprayed with machine gun fire from across the river (see picture below).
It was a lucky hit. The bullet lost much of its velocity crossing the river and the sheet metal of the car slowed it down even further. The Kevlar bullet proof vest did its job. I got away with only a nice bruise.
As we drove out of town the major received another call. Thanks to our effort the mortar had been silenced. He gave me a big smile and a thumbs up.
At the edge of town, we stopped for a victory photo at the city gates. That’s my team holding the American flag. The major has a scarf covering his face to keep his identity secret.
The major told me I was the bravest man he ever met. Then he turned and started walking back into Kherson.
If you want to watch the video of John Thomas’s Wild Ride please tune into mt biweekly webinar on Wednesday October 18 at 12:00 noon ESR>
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
(HEADING TOWARDS A CASHLESS SOCIETY IN AUSTRALIA)
(GEOPOLITICS AND GOLD)
(LONGEVITY SECRET OF THE NAKED MOLE RAT)
October 18, 2023
Hello everyone,
By the end of the decade, Australia could be a cashless society. In other words, instead of walking around with notes and change in our wallets, we will walk around with just our phones.
The transition to digital transactions is happening much quicker than experts first imagined as cash becomes a less popular form of payment.
Credit/debit cards and digital wallets such as Apple Pay and Google Pay are now the preferred method of payment by most customers.
It is a convenient way to transact in our day-to-day lives.
One of Australia’s major banks, the Commonwealth Bank, is predicting that the use of cash will be a thing of the past by 2026.
In 2007, 70% of consumer payments were cash and they were still 61% in 2010.
By 2022, cash payments were just 13%.
The Covid-19 pandemic popularised the use of mobile wallets when businesses avoided contact with customers by implementing strict no-cash policies. Today, around 40% of Australians are comfortable leaving home without their actual wallets or cards, using only their phone to pay.
Digital wallet payments rocketed from $746 million in 2018 to more than $ 93 billion four years later.
There are concerns over consumer privacy when using digital payments as everything we spend our money on can be seen. Using cash, on the other hand, prevents our bank or government from knowing where our money goes. Furthermore, fraud and identity theft are also an increasing threat due to our reliance on our cards/digital transactions.
Interest rates and geopolitics are prompting us to buy more Gold.
The commodity will act as a hedge against looming geopolitical risks and an expected fall in bond yields. As I write this gold now sits around $1922. Buy in small parcels. (I have been urging everyone to purchase gold in small parcels for many weeks now, particularly when gold was falling towards $1800.) (WPM), (SIL), SLV), (GOLD), (GLD).
An option trade to consider (MCD)
Mcdonald's has shed some 17% of its market value over the past three months as it declined from nearly $300 to its current level of around $250. To any trader looking at the McDonald's chart, we could say the trends are bearish with negative momentum. But a contrarian view could see it as an opportunity to be a buyer of this blue chip at a cheap valuation and play for a bounce.
MCD is showing signs of exhaustion (the RSI is oversold) and now trades at just above 20 times forward earnings, which is about a 15% discount to its historical average relative. Furthermore, its push into digital penetration with mobile ordering and delivery is expected to deliver growth of nearly 10% this year after a flat 2022.
You could look at a vertical call spread in MCD with expiration and strikes at
Dec 2023 $250/$270 or even Dec 2023 $250/$260
MCD is a suggestion for a trade idea. By the time you receive this Post, the stock may have moved, and prices changed. Check your risk/reward before entering any trade.
We have a lot to learn about longevity from The Naked Mole Rat.
Compared to other rodents, naked mole rats have unprecedented longevity; their average lifespan lies somewhere between 10 to 30 years. By comparison, similarly sized rodents are lucky if they make it to four. Not only are naked mole rats long-lived, but they are also comparatively healthier than other rodents.
We need to look at the cellular level to explain the naked mole rat’s extraordinary longevity.
Structures called telomeres, found at the ends of chromosomes, protect our DNA from damage. They normally shortage with age, but in the naked mole rate their telomeres elongate slightly as they age. They also don’t face any issues with proteasome function, which is like the cellular garbage disposal system that gets rid of old and damaged proteins that are clogging up the space.
What’s behind their mysterious long-lived lives?
Hyaluronic Acid.
It’s the kind of glue that provides mechanical support to cells and is involved in a host of important cellular functions, including cell migration and proliferation. Hyaluronic acid comes in different masses, which define its function. The low mass version of the molecule (LMM-HA) is related to inflammation and cancer metastasis. The high mass version (HMM-HA), on the other hand, has anti-inflammatory properties and helps keep the body’s tissues in order. Scientists have discovered that naked mole rats have up to ten times more high-molecular-mass hyaluronic acid in their bodies than do their close relatives, mice, or even humans. Furthermore, the hyaluronic acid produced by the naked mole rats also seems to be very good at protecting cells against harmful agents. To discover whether other rodents could benefit from the effects of the mole rat’s hyaluronan, researchers genetically modified mice so that they carried the naked mole rate version of the gene that produces the acid, hyaluronan synthase 2 gene. After studying these mice for the duration of their lifespan and paying special attention to cancer incidence, the researchers found that the genetically modified mice were far less likely to develop cancer, and experienced fewer health issues generally.
Can we replicate this in humans in the future?
Honouring the Fallen
Many Australian citizens have dropped their lives in their home country to go and fight with Ukrainians in Ukraine. Many have made the ultimate sacrifice including those pictured below. We give thanks to those men and to all those people who have fought to support the Ukrainians. I have a Ukrainian friend in London, and she tells me that her cousins – some as young as 12 have gone to the front to fight. Incredible courage!
Cheers,
Jacquie
Global Market Comments
October 18, 2023
Fiat Lux
Featured Trade:
(OCTOBER 31 MIAMI FLORIDA STRATEGY LUNCHEON)
(ORDER EXECUTION 101)
Mad Hedge Biotech and Healthcare Letter
October 17, 2023
Fiat Lux
Featured Trade:
(AN EXCELLENT BLUEPRINT FOR SUCCESS)
(AMGN), (ABBV), (BMY)
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
Dividends, the consistent source of passive income, have long anchored many investment portfolios. For stock market investors, particularly those with an eye on the biotechnology and healthcare sector, dividends offer both stability and potential growth.
However, the landscape of dividends is not without its pitfalls. A significant concern for investors is when a company decides to cut or suspend these payouts. So, how can one navigate this challenge? The key is to pinpoint corporations that not only offer dividends but are also poised for sustained growth.
This brings us to a prime example: Amgen (AMGN).
Amgen, in recent times, has grappled with challenges that are not uncommon in the pharmaceutical world. The competitive landscape has chipped away at the market share of some of its flagship drugs, leading to a stagnation in revenue growth.
New therapies, like the asthma treatment Tezspire, have received approval but have yet to be the sales catalysts the company might have hoped for. However, it's crucial to understand that in the pharmaceutical industry, stagnation is not a death sentence but a call to innovate and adapt.
Recognizing the need for strategic growth, Amgen unveiled its plans to acquire Horizon Therapeutics for $28.3 billion in cash.
Horizon, specializing in rare autoimmune diseases, offers a rich pipeline of over 20 programs and an array of approved products. This move is not just an expansion; it's a strategic enhancement of Amgen's portfolio.
After some initial regulatory challenges, the acquisition was sealed on October 6, 2023, at $116.50 per share in cash, amounting to an equity value of $27.8 billion.
Now, let's delve into the numbers. Horizon reported a revenue of $3.6 billion for the year ending June 30, 2023, and an operating income of $513 million. When we juxtapose these figures against Amgen's performance, projections suggest that Horizon could amplify Amgen's annual revenue by a notable 12% to 14%.
As of October 9, 2023, Amgen's equity value stood at approximately $143 billion, translating to an equity value to an annual revenue ratio of 5.3x. In comparison, Horizon's ratio is 7.9x.
For the discerning investor, these figures hint at Amgen's belief in Horizon's potential to be a significant revenue generator.
But Amgen's story doesn't end with Horizon. The company's resilience is evident in its global strategies.
The inclusion of Repatha on China’s National Reimbursement Drug List as of January 1, 2022, bore fruit, with sales jumping from $388 million in the first quarter of this year to $424 million by the second quarter.
Even drugs like Enbrel and XGEVA, which faced concerns about increased competition, have shown promising sales trajectories. By the second quarter of 2023, Amgen's total product sales touched $6,683 million, a 14% leap from the previous quarter.
With a global footprint and encouraging data for drugs like Tarlatamab and LUMAKRAS, Amgen's revenue projections of $26.6 billion to $27.4 billion for 2023 seem well within reach.
Diversification is another feather in Amgen's cap. Beyond acquisitions, the company is nurturing a robust pipeline with numerous programs in development.
Venturing into the biosimilar market, Amgen is crafting alternatives to blockbuster drugs to compete with the more expensive options offered by the likes of Bristol Myers Squibb (BMY) and AbbVie (ABBV). In an era where affordable healthcare is not just a demand but a necessity, this strategy could further cement Amgen's position in the market.
In the intricate world of biotech investing, adaptability is the rhythm, and forward-thinking is the step. Challenges, while inevitable, are also opportunities in disguise. Strategic decisions, exemplified by Amgen's acquisition of Horizon, can chart the path for sustained growth.
For investors, the numbers are compelling. A dividend growth of 61% over five years, a competitive yield of 3.26%, and a forward P/E ratio of 14.3 paint a picture of stability and promise.
Ultimately, Amgen's journey in the biotech sector underscores the significance of adaptability, innovation, and strategic growth. In an industry marked by rapid changes and high stakes, the company emerges as a symbol of resilience.
For investors with an eye on biotechnology and healthcare, Amgen offers not just dividends but a vision of sustained growth and stability, making it an investment worth considering. I suggest you buy the dip.
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