December 2023

SIRI, RUN FOR PRESIDENT

(PLTR), (NUAN), (META), (TWTR), (GOOGL), (PANW), (CRWD), (ADBE), (CRM)

Shakespeare's "Uneasy lies the head that wears the crown" might as well have been penned for the ever-evolving world of artificial intelligence (AI), especially in its tryst with politics and democracy.

After all, this is a stage where technology and governance perform a delicate dance, often stepping on each other's toes.

So, let's peel back the layers of AI's potential threats to democracy. Moving beyond the typical concerns of fake images and misinformation campaigns, we look into a broader narrative where AI's profound and far-reaching impact on politics becomes evident.

Consider Mayor Eric Adams of New York City, who recently embraced AI to deliver multilingual robocalls to his constituents. A nifty tool for communication, no doubt, but it also blurs lines, creating an illusion of linguistic prowess that isn't actually there. This maneuver also raises questions about transparency and the ethical use of AI in political communication.

The brains behind these controversial AI calls? Voice Lab by Eleven Labs. This organization is the brainchild of former Google and Palantir (PLTR) employees. Voice cloning is their game, a technology that is as fascinating as it is controversial. We've seen it play out in various arenas, stirring up trouble in online forums and outsmarting voice authentication systems, thereby showcasing the inescapable duality of AI's capabilities.

To put this in a more comprehensive context, let's consider how this technology aligns with market trends and opportunities.

While Eleven Labs is not yet on the stock market, its presence draws attention to similar publicly traded entities such as Nuance Communications (NUAN), a heavyweight in conversational AI.

In the landscape of social media and content management, over at Meta (META) and Twitter (TWTR), AI has also become the new sheriff in town, policing a vast expanse of content. Needless to say, this is a herculean task akin to finding a digital needle in a haystack, with the added twist of the needle constantly shifting shape.

Similarly, Alphabet Inc. (GOOGL), the parent of Google, showcases a diverse application of AI. This is not confined to digital searches but across a spectrum of AI applications. From the self-driving ambitions of Waymo to DeepMind's forays into healthcare, Alphabet has been painting a broad stroke on the AI canvas.

Meanwhile, in response to incidents like the Voice Lab scenario, there is a heightened need for robust cybersecurity.

Companies like Palo Alto Networks (PANW) and CrowdStrike Holdings (CRWD) step into the limelight, offering advanced AI-driven cybersecurity solutions. Basically, they're the cyber equivalent of knights in digital armor.

When it comes to blending AI with creativity, Adobe Systems Incorporated (ADBE) and Salesforce.com Inc. (CRM) are leading the charge. Adobe is revolutionizing content creation with AI, while Salesforce is redefining customer engagement in political campaigning and fundraising.

Mayor Adams' advocacy for "ethical" AI usage mirrors a broader conversation about responsible AI governance. This dialogue plays a pivotal role in shaping the regulatory environment, thereby influencing AI's market potential — a narrative that reminds me of the tension between fear and fascination surrounding the internet in 1999, as famously expressed by David Bowie in an interview.

As we reflect on these developments, it becomes clear that AI's integration into various sectors presents both challenges and opportunities for astute investors.

Twenty-five years ago, the internet posed questions about its impact on the US Constitution. The digital world, once perceived as a fortress of freedom, now presents a complex terrain where truth and democracy often find themselves on shaky ground.

As we navigate the complex world of AI and politics, it becomes increasingly apparent that this symbiotic relationship will be a major source of intrigue — and perhaps even headaches — in 2024 and beyond.

December 29, 2023

Jacque's Post

(MINIATURE AI WILL BE BIG IN THE FUTURE)

December 29, 2023

Hello everyone,

We are living in the era of Artificial Intelligence (AI), and it will change our lives in many ways.

Within AI there is currently a large focus on Tiny AI or Minature AI which aims to improve the sustainability of artificial intelligence, thereby reducing its high carbon footprint. This emerging technology compresses the size of artificial intelligence algorithms - which use far less computing power - especially those that use large quantities of data and computational power. What this means is that this technology – Minature AI, can fit and run within microprocessors on consumer or the Internet of Things (IoT)-enabled devices. For instance, we can point to natural language processing (NLP) models like Google’s BERT. The larger version of BERT has 340 million data parameters and training it just once costs enough electricity to power a U.S. household for 50 days. In another example, we learn that a single training session of GPT-3, a popular language that produces human-like text, has the same carbon footprint as traveling 700,000 kilometers by car.

Tiny AI is a power saver and addresses the carbon footprint of artificial intelligence. It aims to reduce the amount of power needed by building algorithms into hardware at the periphery of a network, where they can perform data analytics at low power, avoiding the need to send data back to the cloud for processing. This improves latency as well as power consumption and enables Tiny AI to run on devices like our mobile phones, increasing their functionality but also improving our privacy as the data stays on the device.

As AI keeps popping up in our everyday lives, it raises several privacy concerns. Do you ever get the feeling that you are being constantly monitored in some way, or that your privacy is being compromised? Smart home devices use AI to personalize the experience for each user. However, they store large amounts of data that is not particularly relevant for their applications, on the cloud – making it vulnerable to hacking. There is a demand now for on-device AI which enhances both privacy and safety for Smart Home Devices. The Tiny AI algorithms would run on consumer phone hardware, eliminating the need to analyze data on the cloud, thus reducing a significant amount of energy. Furthermore, it would also ensure ultra-low latency. Think about Google Assistant, the voice assistant on Google’s phone and smart home devices. After Google trimmed down its code so that it runs on-device rather than sending data to the cloud for processing, it processes requests a lot faster than it did before.

Tiny/miniature AI will impact all industries. This technology will facilitate the running of machine learning (ML) models to the smallest of chips and a diverse range of devices. This allows devices to be smart without connecting to the internet. Think for a moment about an autonomous car that doesn’t need to connect to the cloud or simply use a mobile phone to diagnose diseases in remote areas without the internet. Along with better algorithms, advances in embedded devices are advancing the trend. This allows for the development of devices that consume very little power and run for months or years. Now that’s a win-win for people and the environment.

Happy Wednesday.

Cheers,

Jacquie

Tiny Machine Learning: The Next AI Revolution

December 29, 2023

Diary, Newsletter, Summary

Global Market Comments
December 29, 2023
Fiat Lux

Featured Trade:

(MY OLD PAL, LEONARDO FIBONACCI),
(TESTIMONIAL)

December 28, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
December 28, 2023
Fiat Lux

Featured Trade:

(CLOSING THE YEAR WITH A BANG)

(XBI), (ABBV), (IMGN), (RHHBY), (PFE), (MRK), (AMGN), (VKTX), (TERN)

Closing The Year With A Bang

Biotech Letter

The biotechnology sector, pretty much like a phoenix rising from the ashes of its recent lackluster performance, is experiencing a renaissance as 2023 draws to a close. The recent spree of high-stakes deals has set the stage for what could be a significant rebound, a situation that savvy investors should watch closely.

In a remarkable display of strategic maneuvering, AbbVie (ABBV) has been on an acquisition tear.

Earlier in December, they've recently snapped up Cerevel Therapeutics for an eye-popping $8.7 billion, only a week after announcing their intent to acquire ImmunoGen (IMGN) for a formidable $10.1 billion.

And in this high-stakes game, Roche Holding (RHHBY) isn't playing second fiddle, having declared their acquisition of Carmot Therapeutics for $2.7 billion.

This flurry of activity isn't just a few isolated incidents. It's actually a trend. Of the 18 biotech acquisitions exceeding $1 billion announced this year, a significant one-third have emerged since October. This surge is like a shot in the arm for the sector, suggesting a much-anticipated uptick.

But let's take a step back and consider the broader picture.

The SPDR S&P Biotech ETF (XBI) has shown some muscle in November and December. However, it's still trailing behind this year, down by 3%, while the S&P 500 has surged by 19.5%.

Now, focusing on the XBI, a temperature check for the sector: trading around $80, it's a steep drop from its heyday in the $140 range during late 2020 and early 2021. It's down nearly 50% from its peak in February 2021.

This isn't just a dip; it's a nosedive.

Looking at the turn of events, it’s possible that the AbbVie-ImmunoGen deal is perhaps the precursor to a more consistent pattern of mergers and acquisitions in 2024. It seems that we've hit the floor and the only way now is up, with M&A activities poised to inject some much-needed vitality into the sector.

In previous years, the biotech valuations took a hit, and understandably, companies were hesitant to settle for offers that undervalued them compared to their pandemic-era zeniths. But this year, the tide has turned.

Notably, the cumulative value of biopharma deals at a whopping $128 billion this year, shooting up from $61 billion in 2022.

Key transactions fueling this jump include Pfizer's (PFE) massive $43 billion deal for Seagen and Merck’s (MRK) $10.8 billion acquisition of Prometheus Biosciences.

The shift in the regulatory landscape is also worth noting.

Antitrust regulators, who initially seemed poised to block deals like Amgen's (AMGN) $27.8 billion acquisition of Horizon Therapeutics, have shown more flexibility. This change in stance is likely emboldening companies to pursue larger deals.

Now, let's talk about the financial clout.

Large-cap biopharma companies are projected to have about $199 billion in cash by year-end. There's a noticeable dip in dividends and stock buybacks, hinting at a strategic pivot towards mergers and acquisitions. It could indicate that we can expect Pharma to maintain an aggressive stance on the M&A front.

So, what's in store for the XBI and investors alike?

This uptick in M&A activity is like untying the strings of a tightly held purse, releasing cash back into the sector. It's a magnet for both specialist and generalist investor interest, a potential boon for the XBI.

Predicting the next wave of M&A is basically like reading tea leaves. Yet, this year has shown a marked preference for biotechs specializing in obesity, immunology, and cancer.

A notable example is the speculation around Pfizer eyeing a deal with a biotech firm developing an anti-obesity pill.

The ripple effect? Shares of Viking Therapeutics (VKTX) and Terns Pharmaceuticals (TERN), both in the obesity pill race, have seen their stocks jump 47% and 62.5%, respectively, in December.

Evidently, the biotech sector, once in the doldrums, is now witnessing a renaissance. This resurgence is marked by major deals reshaping the industry landscape, holding significant implications for 2024 and beyond.

For investors, this sector represents a fertile ground for growth and opportunity. Staying informed and nimble is key to capitalizing on these dynamic developments. The biotech sector, it seems, is back in the game, and how!

December 28, 2023

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December 28, 2023
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(JACQUIE MUNRO JANUARY 10, 2024 MELBOURNE AUSTRALIA STRATEGY LUNCHEON)

(HOW MY MAD HEDGE AI MARKET TIMING ALGORITHM WORKS)

Jacquie Munro January 10 Melbourne Australia Strategy Luncheon

Diary, Luncheon, Newsletter

Come join Jacquie Munro for her Mad Hedge Global Strategy Update, which she will be conducting in Melbourne, Australia at 12:00 PM on Wednesday, January 10, 2024. A three-course lunch is included.

She’ll be giving you her up-to-date view on stocks, bonds, currencies commodities, precious metals, and real estate.

And to keep you in suspense, she’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $198.

She’ll be arriving early and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.

The lunch will be held at an exclusive restaurant in central Melbourne, the details of which will be emailed to you.

Jacquie looks forward to meeting you, and thank you for supporting her research.

To purchase tickets for the luncheons, please go to my online store at http://www.madhedgefundtrader.com/ and click on “LUNCHEONS”, then on Melbourne.

THE AI ATLAS

Mad Hedge AI

(GOOGL), (NVDA), (MSFT), (IBM), (BIDU), (BABA), (TCEHY), (SFTBY), (SSNLF), (ASML), (SAP), (SIEGY)

The entire 2023 has emerged as the watershed year for artificial intelligence (AI), a field resonating everywhere from corporate boardrooms to pop culture. Amidst AI chatter, a saga unfolds at OpenAI – yes, the brainiacs leading the charge – reminding us of AI's unresolved complexities and staggering potential.

Generative AI is set to shake up a whopping 300 million jobs and could be churning out a jaw-dropping $4.4 trillion annually. That's trillion with a “T!”

But it's not just a corporate scramble; nations are also in a high-stakes race for AI supremacy, shaping a new geopolitical landscape.

However, this race isn’t focused on who can create the most advanced AI. It’s about who's calling the shots on AI applications, where the big bucks and brainpower are flowing, what the rulebook looks like, and how we’re keeping the tech titans in check.

Leading the pack in this global derby are none other than the U.S. and China, duking it out in their digital cold war.

Then, there’s the EU, which has been bossing AI regulation, with the U.S. trailing behind, and Canada – yes, the polite North – is the dark horse with its very own AI strategy.

In corners of the world like India, there's a race to hoard data, while Iran, sanctions and all, is elbowing its way to the top 10 in AI.

Truth be told, the U.S. and China sitting pretty at the top of the leaderboard isn't a shocker. The U.S. is hell-bent on keeping its lead in AI, while China is eyeing the crown of being the top AI innovation hub with a hefty RMB 10 trillion ($1.5 trillion) target by 2030.

Things got real when the White House threw a curveball, banning chip exports to China. Talk about upping the ante.

Now, here's where it gets even more interesting. In 2022, Uncle Sam saw 524 AI startups get funded. That's leagues ahead of everyone else.

Over the past decade, U.S. AI firms have been raking in the dough, outdoing Chinese firms by more than double.

The private sector is flexing its muscles, taking its share in AI from a measly 11% in 2010 to a whopping 96% in 2021. And get this – 70% of AI PhD hotshots in the States are working in the private sector.

Meanwhile, China's playing a different game. The government is the big player here, pushing AI in directions like drug development and gene research. They've got the world's biggest online crowd, so when they launch something like the Ernie Bot, it hits a million users in just 19 hours – ChatGPT took 5 days, just saying.

Now, let's dive into the movers and shakers in the AI world.

On the U.S. front, we've got giants like Alphabet Inc. (GOOGL), NVIDIA Corporation (NVDA), Microsoft Corporation (MSFT), and IBM Corporation (IBM) shaping the AI landscape. Alphabet's DeepMind is spearheading breakthroughs like protein structure prediction, while NVIDIA's GPUs are the muscle behind deep learning.

Microsoft's hefty investment in AI, including its partnership with OpenAI, is making waves, and IBM's Watson AI platform is a testament to their deep-rooted AI expertise.

Switching gears to China, Baidu, Inc. (BIDU), Alibaba Group Holding Limited (BABA), and Tencent Holdings Ltd. (TCEHY) are not just bystanders in the AI race.

Baidu is pushing the envelope with autonomous driving and AI chatbots, while Alibaba is using AI to revolutionize e-commerce and logistics.

Tencent, known for its investment in gaming and social media, is exploring various AI-driven technology solutions.

But it's not all about the U.S. and China. Look at Japan and South Korea. They’re pouring cash into AI to keep up with the times. Each has its own hurdles, though.

Japan’s staring down the barrel of a 789,000 software engineer shortage by 2030. That's going to sting their AI progress for sure.

And South Korea? They have tech chops but are sweating over a talent drought and less-than-stellar government backing. Their AI R&D budget got slashed by 43%, and their AI investment game lags behind the U.K.’s massive $18.2 billion.

Still, SoftBank Group Corp. (SFTBY) in Japan and Korea’s Samsung Electronics Co., Ltd. (SSNLF) have managed to remain major players, with SoftBank's Vision Fund making significant AI investments and Samsung advancing AI in electronics and smartphones.

Europe is not far behind, with the Netherlands’ ASML Holding NV (ASML) playing a pivotal role in the semiconductor industry, crucial for AI technologies.

In the UK, DeepMind Technologies, now a part of Alphabet's empire, is a critical part of AI innovation. And let's not overlook the EU's contributions, with Germany’s SAP SE (SAP) integrating AI into enterprise solutions, and Siemens AG (SIEGY) pioneering industrial AI applications.

In this global AI race, it's clear as day that whoever masters AI is going to be sitting pretty. Remember what Eric Schmidt, the former CEO of Google, said about tech shaping empires? He’s not wrong. Even Vladimir Putin’s thrown in his two cents, saying AI's the new crown jewel.

As the AI world order shapes up, it's going to decide a lot: which AI toys get the limelight, who gets the economic goodies, what data trains our future robot overlords, and which biases we kick to the curb.

It's a tightrope walk between pushing the AI envelope and making sure we don’t trip over our shoelaces.

So, for all investors looking to take a piece of the AI action out there, keep your eyes peeled.

The AI map is being redrawn as we speak, and it’s going to dictate who gets to ride the AI wave and who’s left treading water. Welcome to the future, folks – it's here, and it's AI.

December 27, 2023

Tech Letter

Mad Hedge Technology Letter
December 27, 2023
Fiat Lux

Featured Trade:

(BUYER BEWARE)
(TIKTOK)

Buyer Beware

Tech Letter

Sometimes the best way to become successful at investing in technology stocks is to avoid the black swan or the big disaster.

I hate to say it but investment risk has never been higher.

One question that keeps getting rehashed that I thought I might take time to address is the rise of the TikTok influencer-adviser.

According to a brief Google search, TikTok, known in China as Douyin, is a video-sharing social networking service owned by Chinese company ByteDance.

The social media platform is used to make a variety of short-form videos, from genres like dance, comedy, and education, that have a duration from three seconds to one minute.

Unfortunately, for serious retail investors lately, content has migrated into high-stakes themes like financial education and financial advising giving rise to content that is produced by video creators to get a piece of the financial industry.

Naturally, this has brought down the quality of the financial content on the internet to historic lows simply because most of the content is marginal at best.

These promulgators often preach about their status as “trading gurus” and often leverage the hype of digital currencies to claim they are fully invested in “crypto assets” and urge anyone reading to become one of their new “cult followers.”

They are also usually paid to market a “bulletproof” financial app or certain crypto asset to avid followers without properly disclosing that they are being paid for the advertisement.

This behavior is being encouraged by the TikTok algorithms which order this type of misleading content at the top of searches simply because it gets more hits being a click-bait type of content.

The more outlandish the videos become, gloating about get-rich-quick schemes and 1,000% daily returns, the higher up in the search queries they usually populate when filtered through TikTok algorithms.

These accounts are known as financial “influencers” and post 100s of such videos every month featuring fraudulent success or minimizing the difficulty of profiting through trading and a mix or mash of everything in between.

Even some proclaim to have unlocked the holy grail of trading and “guarantee” 100% returns or your money back.

Another speaking point they like to touch on is how video watchers can “also” afford wealthy lifestyles without having to work, at least in the traditional way.

To dumb down the travails of investing and trading to something easier than pouring a glass of water is a lie.

Many of these novice investors are duped into paying for exorbitant services that are nothing more than promotional buzz offering hyped-up marketing language as specific trading advice.

Unfortunately, US regulators have turned a blind eye to what is happening on this nefarious Chinese platform, and imitators are spawned daily and are certainly incentivized to do so.

While I must admit that regulating this type of behavior on TikTok is incredibly messy, to leave this unchecked will result in massive fraud for the little guy that I try to help.

The justification for ignoring these TikTok “influencers” is that there is even worse cybercrime taking place out there and the content these influencers are peddling is straddling the gray areas of the law.

But it’s not enough, and readers need to understand the heightened risks of diving feet-first into these TikTok polar vortexes where you just get whipped around unknowingly.

Pre-emptively protecting your portfolio by avoiding these TikTok trading gurus is the order of the day.

As we enter 2024, taking tabs on the fallout has been epic.

The TikTok crypto marketers were largely being sponsored by the crypto exchange FTX.

They were peddling FTX’s own digital currency that was made out of thin air.

Anyone trading in this FTX in-house digital coin known as FTT lost most of their money as the CEO of FTX Sam Bankman-Fried was extradited back to the United States and found guilty in court.

FTX’s FTT coin went from $40 at the beginning of 2022 to 80 cents on December 30, 2022, highlighting the dangers of listening to fake crypto “trading gurus” on TikTok pushing FTT coin like there is no tomorrow.

Stay vigilant and happy trading and remember, there is no free lunch in trading.

It’s hard work earning your crust of bread.

BUYER BEWARE