January 2024

SIRI, MEET YOUR COUSINS

(NURX), (IRTC), (BIO), (AAPL), (JNJ), (GOOGL), (HPQ), (INTC), (VERI), (QCOMM), (CHWY), (IRBT), (PETQ), (TSLA), (F), (GM)

At CES 2024, artificial intelligence (AI) was not just part of the buzz; it was the pulsating heart of the entire show.

This event wasn't your typical tech fest. It was like stepping into a future crafted by AI. The future looked so vivid and real that, even I, usually a skeptic, found myself drawn in.

Starting with NuraLogix's (NURX) Anura MagicMirror, which is no ordinary mirror.

Imagine a mirror that doesn't just reflect your image but also divulges your health secrets. This groundbreaking tech can analyze facial blood flow to check vitals like blood pressure and heart disease risk. Currently eyed for gyms and clinics, it signifies AI's expanding role in health diagnostics.

Needless to say, the potential here is staggering. The AI healthcare market is expected to reach $173.55 billion by 2029, growing at an annual rate of 40.2%.

The RPM segment, where MagicMirror could be a star, is looking at a neat $4.3 billion by 2027. The idea of a mirror giving you health updates in your home or a quick health check at an airport kiosk isn't just convenient; it's revolutionary.

In this burgeoning field, companies like Empatica Inc. are carving out a niche with wristbands and smartwatches that use AI to track everything from sleep to stress and medical conditions such as epilepsy.

iRhythm Technologies (IRTC) also steps up with their Zio Patch, an AI-enabled wearable patch for monitoring heart rhythms, while Bio-Rad Laboratories (BIO) brings clinical research and medical diagnostics into the future with AI-driven tools for analyzing physiological data.

Meanwhile, giants like Apple (AAPL) are integrating AI into their Watch Series for health monitoring, Johnson & Johnson (JNJ) is diving into AI for medical imaging and personalized medicine, and Alphabet Inc.'s (GOOGL) Google Health subsidiary Verily is pushing the boundaries with wearables and data analysis for disease detection.

From health, we drift into the world of sleep with China’s DeRucci's smart mattress and anti-snore pillow. This isn't just about sleeping well; it's about sleeping smart.

The mattress is embedded with 23 sensors that adapt to every little whim of your body – temperature, position, heart rate – ensuring optimal support.

And the pillow? It claims to reduce snoring by up to 89%. But good things come with a price – the pillow and mattress together could set you back about nine grand.

Yet, given that the global sleep tech market is a giant, estimated at $55 billion in 2023 and expected to balloon over $130 billion by 2030, DeRucci is onto something big.

The smart mattress sector is projected to hit $3.2 billion by 2026, and the anti-snoring device market is expected to reach $600 million by 2028. This is a market that's not just about comfort; it's about health and technology intertwining to improve quality of life.

From the bedroom, we move to personal computing with HP's (HPQ) Spectre x360 14. Here's where AI meets everyday technology, transforming our mundane tasks into something extraordinary.

Equipped with Intel's (INTC) latest processors, complete with a neural processing unit, this laptop is not just a gadget; it's a glimpse into the future of AI-infused computing.

Keep in mind that the AI consumer electronics market is huge. It's projected to reach $71.8 billion by 2027, growing at a strong 20.4% CAGR.

Within this, AI-driven laptops and PCs are set to grow at a dizzying 25.2% CAGR. HP, with its Spectre x360 14, is not just riding the wave; it's helping create it.

This fusion of AI into our everyday devices seamlessly bridges into another intriguing aspect of AI’s growing footprint: the entertainment industry. The intersection of AI and voice acting, highlighted by the SAG-AFTRA and Replica Studios agreement, brings a new dimension to AI's expanding influence.

This recent agreement is a milestone. It ensures voice actors are compensated for AI replicas of their voices in video games. It's a significant step in balancing technological advancement with performer rights.

Companies like Veritone (VERI), Resemble AI, and Super AI are leading this charge. Veritone is a titan in AI media, managing large-scale audio and video content across various sectors. Resemble AI is making strides with AI voice cloning and deepfakes, while Super AI is focused on emotional AI, striving to capture not just the sound but the essence of human speech.

This quest to humanize technology is a testament to how AI is not just imitating life but becoming an integral part of it.

Speaking of integration, let's pivot to Google's vision for AI in smartphones, echoed by giants like Apple and Samsung. It's not just about smart features; it's about transforming the core of how phones operate.

With powerful processors like Google's Tensor and Qualcomm's (QCOMM) Snapdragon 8 Gen 3, smartphones are evolving into something more powerful and intuitive.

The AI consumer electronics market predicted to exceed $150 billion by 2026, with smartphones as a driving force, is unassailable proof of the potential of Google's AI strategy.

But AI's influence doesn't stop at gadgets and health; it extends to our furry friends too. The Oro Dog Companion Robot is a perfect example of AI's foray into pet care.

Equipped with features like two-way audio, video, treat dispensers, and a ball thrower, it's designed to be a pet's new best friend.

The pet care industry is booming, expected to hit $305.1 billion by 2030, with smart pet products like the Oro Robot eyeing a $19.8 billion market by 2025. So far, companies like Chewy (CHWY), iRobot (IRBT), and PetIQ (PETQ) are key players in this emerging market.

Shifting gears from our furry friends to the automotive world, Volkswagen's integration of ChatGPT into its EV lineup marks a bold move in AI application in vehicles. This isn't just about adding a feature; it's about redefining the driving experience.

The global AI automotive market is estimated to reach $26.88 billion by 2027, with voice assistants, autonomous driving, and personalized experiences leading the charge. Aside from Volkswagen, Tesla (TSLA), Ford (F), and General Motors (GM) are already making significant strides in this field.

Overall, AI at CES 2024 was more than a series of exhibits; it was a vivid demonstration of how AI is reshaping our world – from health and pet care to smartphones and cars. As we stand at the threshold of this AI revolution, it's clear that we're just beginning to uncover its potential. The future is AI, and it's a future that's here to stay.

Trade Alert - (NVDA) January 19, 2024 - TAKE PROFITS - SELL

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

January 19, 2024

Tech Letter

Mad Hedge Technology Letter
January 19, 2024
Fiat Lux

Featured Trade:

(ANOTHER CHIP NAME BESIDES NVIDIA)
(AVGO), (AAPL), (AI)

Another Chip Name Besides Nvidia

Tech Letter

Broadcom (AVGO) has gone through several major transformations since its founding in 1991, and a chart of the stock looks like a hockey stick.

AVGO is now worth close to $600 billion and the show isn’t over yet folks, there is more yet to come.

AVGO has a history of buying growth using debt.

Prior to buying Broadcom, Avago had already acquired a long list of smaller companies to expand its portfolio of wireless, optical, and data storage chips.

By paying $37 billion for Broadcom, it gained even more mobile, networking, wireless, and industrial chips. That inorganic growth strategy made it one of the world's largest chipmakers.

Broadcom subsequently expanded into the infrastructure software market by buying CA Technologies in 2018, Symantec's enterprise security division in 2019, and the cloud software giant Vmware in 2023.

Those acquisitions should diversify its business away from the cyclical semiconductor market and curb its dependence on Apple, which still accounted for 20% of its revenue over the last two fiscal years.

Growth in the 20% range should be driven by three long-term catalysts.

First, the expansion of the generative artificial intelligence (AI) market should trigger stronger sales of its data center and infrastructure chips over the next few years.

Second, its sales of chips to mobile and IT infrastructure customers should heat up again as the macro environment improves.

Apple also signed a new blockbuster deal to buy Broadcom's 5G radio frequency components and other wireless connectivity components for several more years last May, so it won't lose its top semiconductor customer anytime soon.

Broadcom's aggressive expansion strategies have been lucrative, but the sprawl could weaken the company. If that happens, investors will be a lot less forgiving of its rising debt and dilution.

I fully expect strong double-digit revenue growth in the company's AI-related businesses.

I anticipate a proliferation of Gen AI across a broad set of data center workloads to drive strength in Broadcom's custom compute offload and next-generation Networking businesses both in the near- and medium term.

There is also a strong chance of a cyclical recovery in the company's non-AI business.

In addition, I expect synergy capture following the acquisition of VMware, to drive operating margin expansion and earnings growth well in excess of the industry average.

The last lever that will affect stock appreciation will come in the form of shareholder returns.

I do believe that AVGO will ramp up the dividends as revenue accelerates.

Profits went from around $11.5 billion 2 years ago to $14 billion last year.

It’s easy to see the chip company blow by $16 billion this year as well.

It is well on its way to becoming a trillion-dollar company.

I do believe they will reach that goal around 2030.

The stock has more or less gone parabolic and now sitting around $1,200 per share.

It’s been like that for a while now.

Any dip to around $1,100 or $1,000 would be classified as a buying opportunity.

January 19, 2024

Jacque's Post

(BERKSHIRE HATHAWAY REWARDS THE PATIENT LONG-TERM INVESTOR)

January 19, 2024

Hello everyone.

The Magnificent 7 have been stealing the spotlight for a significant period, but there are many other stocks worthy of attention too. One that deserves a look right now is Berkshire Hathaway. Berkshire has displayed bullish technical characteristics throughout its history: it has made higher lows, constructed bullish chart patterns, broken out, made new all-time highs, and extended after breaking out.

In the monthly chart below, BRK.B has had five major breakouts through to 2021. As we can clearly see, some of the bullish patterns took years to form, but the stock has come back each time. More importantly, each comeback has reclaimed a former high point and continued higher.

The stock is now trying to extend beyond its former 2022 and 2023 high points, which could be “major breakout number six.” The last few attempts in late 2023 failed to attract enough interest buyers to push beyond the $360-$370 zone. We are waiting for BRK.B to regain its footing and move higher. While past performance is no guarantee of future returns, patterns within long-term trends tend to repeat themselves in some form or another.

BRK.B has been trading within an upward sloping channel lately, making higher highs and higher lows since bottoming last fall. If demand does not return relatively soon, then respecting the rising 200-day moving average would be the next best thing. That’s currently near $345.

BRK.B last pushed to a new high vs. the S&P500 in late 2018, but that breakout didn’t hold. It’s since outperformed the index from the summer of 2020 and now has returned to a resistance zone that dates all the way back to 2008.

So, when the stock does make another new all-time high, it could be breaking above a 16-year trading range relative to the S&P500, as well.

Keep scaling into Berkshire. If it gets down to the 200 MA at $345 buy with both hands.

This picture was a feature wall behind my bed in a hotel I recently stayed at on the Queensland coast. A fun way to represent the sunny and laid-back state.

One of our beautiful gold coast beaches at sunset.

Cheers

Jacquie

January 19, 2024

Diary, Newsletter, Summary

Global Market Comments
January 19, 2024
Fiat Lux

Featured Trade:

(TESTIMONIAL),
(A CHEAPER WAY TO DO DAVOS)

Testimonial

Diary, Newsletter, Testimonials

Dear John,

Remember me from the QE2? You don’t miss much, but I’m forwarding this AI story, in case you find it interesting. You are the best financial advisor I have ever found.

I know you’ve been a big believer in NVIDIA (NVDA) for years. When I read this, I really understand that (NVDA) is only going to get bigger. They and Microsoft (MSFT) MSFT are the two biggest investors in AI startups.

I hope you have a great 2024, thanks for all the hard work and great newsletters. |

Bill
Santa Barbara, CA

A Cheaper Way to do Davos

Diary, Newsletter

It’s that time of year again, when finance ministers, central bank governors, hedge fund managers, and assorted rock stars hold their annual confab high in the Alps at Davos, Switzerland.

When I was a director of one of the largest banks in Switzerland, I found myself a frequent visitor to Davos. The conference is one of those things that you only want to do once. More than that is too boring.

In years gone by, we provided the loans to the Canton of Graubünden needed to build the lifts and gondolas in Davos to develop it into a world-class ski resort and watering hole for the wealthy.

Without that money, Davos would have remained a small mountain hamlet on the way to long-established St. Moritz, possibly not even warranting its own train station.

Instead of renting out hotel suites for $10,000 a day, the residents would be filling their days cutting hay, milking cows, and making goat cheese. Generous government subsidies would keep the village in the green.

Thanks to our largess, I received a lifetime ski lift ticket there which I still use on occasion.

My friend, the intrepid New York Times reporter, Andrew Ross Sorkin, tells me that the minimum cost to attend the exclusive World Economic Forum for membership and a single ticket is $71,000, and that’s for the cheap tickets.

That just gets you general admission. If you hail from an up-and-coming emerging market, like China, you get a break on the price.

To join some of the private discussion groups, you need to upgrade to a $156,000 package. More exclusive access can be had for “Strategic Partners” for prices ranging up to $696,000 after the latest price increase and Swiss franc revaluation.

That does not include the cost of travel, meals, and accommodation, which are stratospheric, now that the Swiss franc is more valuable than the US dollar (I remember when it was 3:1). $75 for a hamburger? No problem!

All of this just to rub shoulders with hedge fund manager Ray Dalio, European Central Bank governor Christine Lagarde, rock star Bono, and others of their ilk.

Certainly, you can gain many of the insights found in Davos by simply reading the Mad Hedge Fund Trader, at a much lower price. I can get more information from the high and the mighty by chatting over the phone for five minutes rather than engaging in a media scrum in the mountains.

Do you suppose they still have a Youth Hostel in Davos? I think I left my sunglasses there….55 years ago!

January 19, 2024 - Quote of the Day

Diary, Newsletter, Quote of the Day

“If you have the word “broker” in your job title the Internet is going to disintermediate you,” said Scott McNealy, founder of Sun Microsystems.

Trade Alert - (SPY) January 17, 2024 - BUY - INCREASE SHORT

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