Global Market Comments
June 5, 2024
Fiat Lux
Featured Trade:
(JOIN ME ON CUNARDS QUEEN ELIZABETH FOR MY SATURDAY JUNE 29 ALASKA SEMINAR AT SEA),
(POPULATION BOMB ECHOES)
Come join me in the grand appointments of the Cunard Line’s Queen Elisabeth on an adventurous ten-day cruise through Alaska’s Inside Passage.
The Ship departs from Vancouver, Canada at 10:00 AM on Friday, June 21, 2024 and returns on Monday, July 1. The ship will make day stops at Ketchikan, the Tracy Arm Fjord to view a glacier, Juneau, Haines, the Hubbard Glacier, Sitka, and Victoria. There will be two full days at sea in the North Pacific.
There, I will be conducting the Mad Hedge Fund Trader’s Strategy Luncheon where I will discuss the future of the global financial markets.
I’ll be giving you my up-to-date view on stocks, bonds, currencies, commodities, precious metals, energy, and real estate. I’ll highlight the best long and short opportunities.
And to keep you in suspense, I’ll be tossing 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 $499 for the seminar only.
Attendees will be responsible for booking their own cabin through Cunard. They offer everything from an inside stateroom from $799 per person to $26,780 for Q1 deluxe two-bedroom apartment with its own gym and two butlers.
Just visit their website by clicking here or call them directly at 800-528-6273 to make your own arrangements. Only reserve cruise number Q420.
The weather this time of year can range from balmy to tempestuous, depending on our luck. A brisk walk three times around the boat deck adds up to a mile. Full Internet access will be available, for a price, to follow the markets.
Two dinners during the voyage will be black tie, so bring two tuxes or formal dresses. Don’t forget to bring your Dramamine and sea legs, although the ten-year-old, 932-foot-long $1 billion ship is so big I doubt you’ll need them.
The event will be held at the ship’s luxurious Owners Suite, the details of which will be emailed to you with your purchase confirmation.
I look forward to meeting you and thank you for supporting my research.
To purchase tickets for this luncheon, please click here or click the BUY NOW! button above.
Pack your portfolios with agricultural plays like Mosaic (MOS) if Dr. Paul Ehrlich is just partially right about the impending collapse of the world’s food supply.
You might even throw in long positions in wheat (WEAT), corn (CORN), soybeans (SOYB), and rice.
It says a lot that when I update a sector report like this and half the companies have disappeared from takeovers (Potash and Agrium), you should take notice.
The never-dull and often controversial Stanford biology professor told me he expects that global warming is leading to significant changes in world weather patterns that will cause droughts in some of the largest food-producing areas, causing massive famines. Food prices will skyrocket, and billions could die.
At greatest risk are the big rice-producing areas in South Asia, which depend on glacial runoff from the Himalayas. If the glaciers melt, this crucial supply of fresh water will disappear.
California faces a similar problem if the Sierra snowpack fails to show up in sufficient quantities, as it has done in five of the last six years.
Rising sea levels displacing 500 million people in low-lying coastal areas is another big problem.
One of the 92-year-old professor’s early books The Population Bomb was required reading for me in college in the 1960s, and I used to drive up from Los Angeles to Palo Alto just to hear his lectures (followed by the obligatory side trip to the Haight-Ashbury).
Other big risks to the economy are the threat of a third-world nuclear war caused by population pressures, and global insect plagues facilitated by a widespread growth of intercontinental transportation and globalization.
And I won’t get into the threat of a giant solar flare frying our electrical grid. That is already well covered on the Internet.
“Super consumption” in the US needs to be reined in where the population is growing the fastest. If the world adopts an American standard of living, we need four more Earths to supply the needed natural resources.
We must raise the price of all forms of carbon, preferably through taxes, but cap and trade will work too. Population control is the answer to all of these problems, which is best achieved by giving women education, jobs, and rights, has already worked well in Europe and Japan, and is now unfolding in Latin America.
All sobering food for thought. I think I’ll skip that Big Mac for lunch.
Is There Room for Me?
“The circulation of confidence is better than the circulation of money,” said President James Madison, America’s fourth president.
Mad Hedge Biotech and Healthcare Letter
June 4, 2024
Fiat Lux
Featured Trade:
(FROM PETRI DISH TO PERSONALIZED PRESCRIPTION)
(RXRX), (SDGR), (RLAY), (EXAI), (ABCL), (AMS: BAI), (NVDA), (IBM), (MSFT)
Remember the last time you had to pop a pill that felt like a one-size-fits-all solution? I sure do. It was for a nagging cough, and while it did the trick, the side effects left me feeling like I'd been hit by a truck.
Turns out, Big Pharma is facing its own kind of side effects. They spend an average of $2.6 billion and over a decade to bring a new drug to market. That's like betting on a long shot at the Kentucky Derby, but with way worse odds.
But what if we could change the game entirely? What if drug discovery wouldn’t solely be about blindly mixing chemicals and hoping for the best.
Instead, picture a super-smart robot scientist, capable of reading millions of pages of medical research in seconds, understanding how different molecules interact, and even predicting which ones might be effective against a disease.
This AI-powered scientist could then design experiments to test those molecules, analyze the results, and even create new molecules from scratch, tailored to specific diseases and individual patients.
That's the promise of autonomous drug discovery.
While we've already seen robots and miniaturization speed up the drug discovery process, AI is taking it to the next level. I’m talking about AI agents running the entire show, from brainstorming biological theories to designing and running experiments, all with barely a human finger lift.
This isn't just about efficiency. It's a veritable gold mine of benefits: costs slashed, development times cut down, success rates skyrocketing, and a productivity boost that could revolutionize personalized medicine. And why does that matter?
Because it means treatments that are more effective, safer, and tailored to your unique genetic makeup, medical history, and lifestyle. Imagine popping a pill that's not just designed to treat your disease, but designed specifically for you. That's the kind of future autonomous drug discovery could deliver.
Imagine a world where your next prescription is fine-tuned to your genetic makeup, your medical history, your lifestyle. Sounds like bespoke tailoring, but for your health.
And this isn't just hype – it's backed by hard numbers. A recent study by McKinsey & Company found that AI-enabled drug discovery could potentially generate up to $50 billion in annual value by 2026.
The study also highlighted that AI could reduce the time required for drug discovery by up to 50%, while also improving the success rate of clinical trials.
These aren’t merely some abstract predictions either. In fact, some companies are already making waves in this new world of drug discovery.
Recursion Pharmaceuticals (RXRX), for example, is at the forefront of these innovations. They've developed a radical new drug discovery platform that combines advanced robotics, experimental biology, and machine learning to rapidly identify potential new treatments for a wide range of diseases.
Forget dusty labs and slow, painstaking research. Recursion's approach is like giving Sherlock Holmes a supercomputer to solve medical mysteries, and the results speak for themselves: over 2,000 novel biological relationships discovered and a mind-boggling 150 terabytes of relatable biological data generated.
That's the equivalent of roughly 30 million songs, all focused on cracking the code of human biology and disease.
Recursion isn't the only player here. A slew of innovative companies are riding the AI wave, reimagining the drug discovery landscape.
Schrödinger (SDGR) is turbocharging the process with AI and computational wizardry, using algorithms to predict how potential drugs will behave in the body before even stepping foot in a lab.
Relay Therapeutics (RLAY) is forging new paths by marrying cutting-edge computation with experimental techniques, focusing on how cancer cells move and change shape to develop targeted therapies.
Exscientia (EXAI), the AI-driven pharmatech company, is designing and discovering new drugs with unprecedented speed, while AbCellera Biologics (ABCL) is harnessing the power of AI and machine learning to decode the secrets of our immune systems, hunting for antibodies that could be developed into life-saving drugs. It’s basically like having a crack team of digital detectives scouring your immune system for clues to fight off diseases.
Meanwhile, BenevolentAI (AMS: BAI) is the top name when it comes to clinical-stage AI drug discovery, using a potent combination of AI, machine learning, and cutting-edge science to unravel the complexities of disease biology and unearth novel treatments. They're not simply content with throwing darts at a target. This company is using AI to pinpoint the bullseye.
But, this AI-powered revolution of the healthcare world isn't happening in a vacuum. It's being supercharged by a tag team of tech titans who are bringing their AI firepower to the table.
Think of it as the Avengers assembling to fight disease, but instead of superpowers, they're armed with algorithms and cloud computing.
Nvidia Corporation (NVDA), IBM Corporation (IBM), and Microsoft Corporation (MSFT) are leading the charge, providing the AI muscle needed to accelerate drug discovery.
Nvidia's Clara Discovery platform, IBM Watson Health, and Microsoft Azure's AI and machine learning services are all being harnessed to build, train, and deploy AI models for a wide range of applications in the biotech and healthcare sectors. It's like having Tony Stark, Bruce Banner, and Thor all working together to create the next medical breakthrough.
And this isn't some wishful thinking. The use of AI in biopharma R&D is projected to skyrocket, growing at a compound annual growth rate of 30% to 40% over the next five years.
Plus, the impact could be huge: AI could potentially boost clinical trial efficiency by 15% to 20% and slash the overall cost of drug development by 10% to 15%. Talk about a win-win situation.
All in all, it’s clear that this AI drug discovery thing isn't just a fad. It's a full-blown revolution that's shaking up the healthcare world as we know it. And while it's still in the early innings, it would be wise to keep a close eye on it. I'm not saying you should throw all your money in right this second, but seriously, put the companies above on your radar.
These are the trailblazers leading the charge into the future of personalized medicine. Who knows, they might just be the ticket to a healthier portfolio—and a healthier you.
Global Market Comments
June 4, 2024
Fiat Lux
Featured Trade:
(The Mad June traders & Investors Summit is ON!)
(THE BIGGEST “TELL” IN THE MARKET RIGHT NOW),
(GOOGL), (FRC), (PINS), (WORK), (UBER),
(ADSK), (WDAY), (SNE), (NVDA), (MSFT)
The Fed has stopped raising interest rates, inflation is falling, and tech stocks are on fire!
What should you do about it?
Attend the Mad Hedge Traders & Investors Summit from June 4-6. Learn from 28 of the best professionals in the market with decades of experience and the track records to prove it.
Every strategy and asset class will be covered, including stocks, bonds, foreign exchange, precious metals, commodities, energy, and real estate.
Get the tools to build an outstanding performance for your own portfolio.
Best of all, by signing up, you will automatically have a chance to win up to $100,000 in prizes.
Usually, access to an exclusive conference like this costs thousands of dollars. You can attend for free!
Listening to this webinar will change your life! To register, please click here.
I am constantly looking for “tells” in the market, little nuggets of information that no one else notices, but give me a huge trading advantage.
Well, there is a big one out there right now. The bottom feeders are pouring into San Francisco commercial real estate, taking advantage of valuations that sometimes reach negative numbers. Owners are walking away from buildings, mailing in the keys, and going into default rather than keeping up mortgage payments. What’s worse is refinancing at today’s lofty rates. That’s what you would expect with a 36% vacancy rate.
The message for you traders is loud and clear. You should be picking up the highest quality technology growth stocks on every substantial dip, such as Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), Meta (META), and NVIDIA (NVDA). For they all know some things that you don’t. Their businesses are about to triple, if not quadruple over the coming decade thanks to AI. For every abandoned building out there are 200 new AI start-ups taking advantage of today’s bargain basement rates, and ALL of them use the services of the five companies above.
Technology stocks, which now account for an eye-popping 30% of stock market capitalization, will make up more than half of the market within ten years, much of that through stock price appreciation. And they are all racing to lock up the office space with which to do that….now.
San Francisco office rents reached a record pre-pandemic as the continued growth of tech — now turbocharged by nearly $100 billion in new capital raised in a series of initial public offerings — met a severe space crunch.
Asking rents rose to a staggering $84.16 per square foot annually for the newest and highest quality offices in the central business district, and citywide asking rents for such spaces, known as Class A, were up over 9% from the prior year. The citywide office vacancy rate was 5.5% in June, down from 7.4% a year ago.
In addition, local Bay Area home prices could get a turbocharger by the fall, when interest rates are expected to start falling.
San Francisco companies that have gone public continue to grow by leaps and bounds. Pinterest (PINS), Slack (WORK), and Uber (UBER) also signed office leases this year, with room for thousands of new employees.
Tech companies Autodesk (ADSK) and Glassdoor also signed deals at 50 Beale St. in the spring. In a sign of the city’s rapidly changing economy, old-line construction firm Bechtel and Blue Shield, the legacy health insurer, are both moving out of 50 Beale St. Sensor maker Samsara, software firm Workday (WDAY), and Sony’s (SNE) PlayStation video game division also expanded.
Globally, San Francisco has the seventh-highest rents in prime buildings. It’s still behind financial powerhouses Hong Kong, London, New York, Beijing, Tokyo, and New Delhi (San Francisco’s average office rents beat out New York.)
Only a handful of new office projects are being built, and future supply is further constrained by San Francisco’s Proposition M, which limits the amount of office space that can be approved each year. That is creating a steadily worsening structural shortage. Only two large office projects are under construction without tenant commitments.
Suddenly, it’s Not Crowded in San Francisco
"Technology has outrun the ability of the market to handle it. When the next bear market comes, there could be a messy affair," said my friend and client Leon Cooperman of hedge fund Omega Advisors.
