June 2024

Pharmageddon Averted

For far too long, we've been playing a dangerous game of biotech roulette - throwing our hard-earned dough at stocks solely based on who's peddling the latest drugs and vaccines to the biggest crowds.

We tiptoe around those dreaded "patent cliffs", living in fear of the moment our cash cows turn into generic, discount-bin duds overnight.

As I've loudly proclaimed before, Big Pharma is fundamentally a tightrope act - milking those lucrative exclusives for all they're worth while bracing for the inevitable day those monopolies go kaput.

It's an anxiety-inducing cycle, one that's been running the show for decades.

But enough is enough. It's high time we tossed that musty old playbook straight into the trash. Why? Because the reign of Pharma's legacy model is fading faster than my hairline.

A new revolutionary force is taking over – personalized medicine.

Don't kid yourselves, this tectonic shift is the real deal. We're witnessing a paradigm upheaval in how drugs are developed and treatments are administered.

Advanced, genetically-tailored therapies are muscling their way to the frontlines, employing each patient's unique DNA blueprint to craft bespoke care strategies like never before.

Leading this charge are gene sequencing pioneers like Illumina (ILMN), equipping healthcare with bleeding-edge tech for genetic profiling and research.

Companies like Invitae (NVTAQ) and Natera (NTRA) are making genetic intel accessible and actionable for diagnosing and treating inherited nightmares like cancer and heart disease. This isn't a drill, people. It’s the new reality.

But the innovation train doesn't stop there. Guardant Health (GH) is upping the ante with its non-invasive blood tests that capture tumor genetic data, allowing physicians to map treatment plans without those pesky, invasive procedures.

And let's hear it for Exact Sciences (EXAS), championing molecular diagnostics to laser-focus cancer regimens based on each person's biological fingerprint.

Speaking of cancer, we'd be remiss not to spotlight the game-changing progress happening on the personalized medicine front.

At the latest American Society of Clinical Oncology shindig, the best oncology minds showcased their latest advancements in tailored treatments.

Get this – over the last four years, over a third of the FDA's new drug approvals were personalized meds. With the White House doubling down, those numbers are only going up.

Obviously, personalized medicine is this century's gold rush. In fact, a global biopharma race is already underway, and everyone’s practically frothing at the mouth.

After all, this half-trillion-dollar market is barreling towards the $1 trillion mark by 2031.

And in this blossoming field, outfits like Thermo Fisher (TMO) and Qiagen (QGEN) are indispensable, provisioning crucial tools and services.

Thermo covers the full genetic research and diagnostics gamut, while Qiagen specializes in sample prep and molecular testing – two linchpins for delivering personalized therapies.

But it's not just the upstart trailblazers making waves. Biotech titans like Novartis (NVS), Roche (RHHBY), and AstraZeneca (AZN) are going knees-deep into advanced, commercially-viable personalized treatments – especially in oncology, where understanding Individual genetic mutations can literally mean life or death.

Let's pour one out for the real pioneers here, too – groundbreakers like CRISPR Therapeutics (CRSP), Editas Medicine (EDIT), and Fate Therapeutics (FATE).

These mavericks are lighting up the gene editing and cell therapy arenas, hand-crafting hyper-personalized treatments that smite genetic diseases at the source.

Now, for those of you eagerly wondering where to splash your investment cash, I suggest you don't fall into the trap of banking solely on the next patented "winner" therapy.

Those old-school patent monopolies that once ruled the roost? Their significance is waning rapidly.

With the flurry of personalization tech out there, it's a Wild West – one company churns out a new treatment, another can swiftly follow suit.

Patent feuds and skyrocketing costs loom on the horizon like storm clouds. The gravy train of eternal patent profits is running out of steam.

But make no mistake, this arms race isn't cooling off anytime soon. The battleground's scope is simply shifting. It's no longer just about formulating the latest miracle drug – it's about delivering unbeatable services and customer experiences.

Because here's the cold hard truth – the biggest roadblock to getting these revolutionary therapies to patients is obtaining all the genetic data and personal insights needed to make it happen.

Healthcare providers are going to need to invest heavily in new data management systems, training, and education just to keep pace with these rapidly evolving personalized meds.

The pharma players that thrive? They're the ones going beyond prioritizing drug development to obsessing over best-in-class customer service and care delivery.

They'll cement customer loyalty, forge lasting partnerships – and in doing so, actualize personalized medicine's boundary-shattering promise. Those are the winners I'm betting big on.

So wake up and smell the coff-gene. The personalized biotech goldrush is kicking into high gear.

And those wise enough to stake an early claim? Well, let's just say they'll be dishing out more than genetics-guided therapy – they'll be minting a new generation of biotech fortunes.

June 18, 2024

Diary, Newsletter, Summary

Global Market Comments
June 18, 2024
Fiat Lux

Featured Trade:

(JULY 2 VANCOUVER CANADA STRATEGY LUNCHEON),
(A NOTE ON OPTIONS CALLED AWAY)
(TLT), (TSLA)

SOLD OUT - July 2, 2024 Vancouver, Canada Strategy Luncheon

Diary, Lunch, Newsletter

Come join me for lunch at my Global Strategy Luncheon which I will be conducting in Vancouver, Canada at 12:00 PM on Tuesday, July 2, 2024. A three-course lunch is included. This is my first ever Strategy Luncheon in Canada so I expect an enthusiastic attendance.

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

And to keep you in suspense, I’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 $239.

I’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 hotel in central Vancouver, the details of which will be emailed to you.

I look forward to meeting you, and thank you for supporting my research.

To purchase tickets for this luncheon, please click here.

A Note on Assigned Options, or Options Called Away

Diary, Newsletter

I know all of this may sound confusing at first. But once you get the hang of it, this is the greatest way to make money since sliced bread.

I still have two positions left in my model trading portfolio that are deep in-the-money, and about to expire in 3 trading days. Those are the

(AMZN) 6/$160-$170 call spread

(SLV) $23-$25 call spread

That opens up a set of risks unique to these positions.

I call it the “Screw up risk.”

As long as the markets maintain current levels, this position will expire at its maximum profit value.

With the June 21 options expirations upon us, there is a heightened probability that your short position in the options may get called away.

Although the return for those calling away your options is very small, this is how to handle these events.

If exercised, brokers are required by law to email you immediately and I know all of this may sound confusing at first. But once you get the hang of it, this is the greatest way to make money since sliced bread.

If it happens, there is only one thing to do: fall down on your knees and thank your lucky stars. You have just made the maximum possible profit for your position instantly.

Most of you have short-option positions, although you may not realize it. For when you buy an in-the-money vertical option spread, it contains two elements: a long option and a short option.

The short options can get “assigned,” or “called away” at any time, as it is owned by a third party, the one you initially sold the put option to when you initiated the position.

You have to be careful here because the inexperienced can blow their newfound windfall if they take the wrong action, so here’s how to handle it correctly.

Let’s say you get an email from your broker telling you that your call options have been assigned away.

I’ll use the example of the Amazon (AMZN) June 2024 $160-$170 in-the-money vertical Bull Call spread since so many of you have these.

For what the broker had done in effect is allow you to get out of your call spread position at the maximum profit point 3 days before the June 21 expiration date.

In other words, what you bought for $9.30 on June 6 is now worth $10.00, giving you a near-instant profit of $840 or 9.68% in 11 trading days.

All have to do is call your broker and instruct them to “exercise your long position in your (AMZN) June 2024 $160 calls to close out your short position in the (AMZN) June 2024 $101 calls.”

You must do this in person. Brokers are not allowed to exercise options automatically, on their own, without your expressed permission.

You also must do this the same day that you receive the exercise notice.

This is a perfectly hedged position. The name, the ticker symbol, the number of shares, and the number of contracts are all identical, so you have no exposure at all.

Call options are a right to buy shares at a fixed price before a fixed date, and one option contract is exercisable into 100 shares.

Short positions usually only get called away for dividend-paying stocks or interest-paying ETFs like the (AMZN). There are strategies out there that try to capture dividends the day before they are payable. Exercising an option is one way to do that.

Weird stuff like this happens in the run-up to options expirations like we have coming.

A call owner may need to sell a long (AMZN) position after the close, and exercising his long (AMZN) put is the only way to execute it.

Adequate shares may not be available in the market, or maybe a limit order didn’t get done by the market close.

There are thousands of algorithms out there that may arrive at some twisted logic that the puts need to be exercised.

Many require a rebalancing of hedges at the close every day which can be achieved through option exercises.

And yes, options even get exercised by accident. There are still a few humans left in this market to blow it by writing shoddy algorithms.

And here’s another possible outcome in this process.

Your broker will call you to notify you of an option called away, and then give you the wrong advice on what to do about it.

There is a further annoying complication that leads to a lot of confusion. Lately brokers have resorted to sending you warnings that exercises MIGHT happen to help mitigate their own legal liability.

They do this even when such an exercise has zero probability of happening, such as with a short call option in a LEAPS that has a year or more left until expiration. Just ignore these, or call your broker and ask them to explain.

This generates tons of commissions for the broker but is a terrible thing for the trader to do from a risk point of view, such as generating a loss by the time everything is closed and netted out.

There may not even be an evil motive behind the bad advice. Brokers are not investing a lot in training staff these days. In fact, I think I’m the last one they really did train.

Avarice could have been an explanation here but I think stupidity and poor training and low wages are much more likely.

Brokers have so many ways to steal money legally that they don’t need to resort to the illegal kind.

This exercise process is now fully automated at most brokers but it never hurts to follow up with a phone call if you get an exercise notice. Mistakes do happen.

Some may also send you a link to a video of what to do about all this.

If any of you are the slightest bit worried or confused by all of this, come out of your position RIGHT NOW at a small profit! You should never be worried or confused about any position tying up YOUR money.

Professionals do these things all day long and exercises become second nature, just another cost of doing business.

If you do this long enough, eventually you get hit. I bet you don’t.

Calling All Options!

Broadcom Surges Past Eli Lilly, Claims Eighth Spot Among Top U.S. Companies by Market Capitalization

Mad Hedge AI

In a remarkable display of financial prowess and technological innovation, Broadcom Inc. (AVGO) has overtaken Eli Lilly & Co. (LLY) to secure the eighth position among the most valuable companies in the United States, based on market capitalization. This significant shift in the corporate landscape underscores Broadcom's growing influence in the semiconductor industry and its strategic positioning to capitalize on the burgeoning demand for artificial intelligence (AI) technologies.

The Rise of Broadcom: A Technological Powerhouse

Broadcom, a global leader in semiconductor and infrastructure software solutions, has experienced a meteoric rise in recent years. The company's diverse portfolio of products, ranging from networking chips and storage controllers to enterprise software solutions, has propelled its growth and solidified its position as a key player in the technology sector.

One of the driving forces behind Broadcom's success has been its unwavering focus on innovation. The company consistently invests heavily in research and development, ensuring that it remains at the forefront of technological advancements. This commitment to innovation has allowed Broadcom to anticipate and respond to evolving market trends, thereby maintaining its competitive edge.

Broadcom's Strategic Acquisitions: Fueling Growth and Diversification

In addition to its organic growth initiatives, Broadcom has pursued a series of strategic acquisitions that have further bolstered its market position and expanded its product offerings. Notable acquisitions include Brocade Communications Systems, CA Technologies, and Symantec's enterprise security business. These acquisitions have not only broadened Broadcom's product portfolio but also diversified its revenue streams, reducing its reliance on any single market segment.

The AI Revolution: Broadcom's Key to Success

As the demand for AI technologies continues to surge across various industries, Broadcom has emerged as a leading provider of AI-enabling solutions. The company's AI chips and software platforms are used in a wide range of applications, including data centers, autonomous vehicles, and robotics. Broadcom's ability to cater to the growing demand for AI solutions has been a key factor in its recent financial success.

The Market's Response: Investors Embrace Broadcom's Potential

Investors have responded enthusiastically to Broadcom's impressive performance, driving the company's stock price to new heights. On June 17, 2024, Broadcom's stock (AVGO) gained 5.4%, pushing its market capitalization beyond $847 billion, surpassing Eli Lilly's market cap of over $841 billion. This surge in Broadcom's stock price reflects investors' confidence in the company's growth prospects and its ability to capitalize on emerging market opportunities.

Eli Lilly: A Pharmaceutical Giant Faces Challenges

While Broadcom has been on an upward trajectory, Eli Lilly, a renowned pharmaceutical company, has faced challenges in recent times. The company's dependence on a few blockbuster drugs, coupled with increasing competition from generic drug manufacturers, has put pressure on its revenue growth. Additionally, the high cost of drug development and regulatory hurdles have made it difficult for Eli Lilly to bring new drugs to market quickly.

The Road Ahead: Implications for Both Companies

Broadcom's ascension to the eighth position among the top U.S. companies by market capitalization is a testament to its technological prowess, strategic acquisitions, and ability to adapt to changing market dynamics. The company's focus on AI and other emerging technologies positions it well for continued growth in the years ahead.

For Eli Lilly, the loss of its eighth-place ranking serves as a reminder of the challenges facing the pharmaceutical industry. The company will need to focus on developing innovative new drugs, expanding into new markets, and navigating the complex regulatory landscape to maintain its competitiveness in the global pharmaceutical market.

Broadcom's success story is a testament to the power of innovation, strategic decision-making, and the ability to adapt to changing market conditions. As the company continues to invest in emerging technologies and expand its product portfolio, it is well-positioned to maintain its upward trajectory and solidify its position as a global technology leader.

The Impact on the Broader Market:

Broadcom's rise in market capitalization signifies a broader shift in the U.S. economy towards technology-driven growth. As traditional industries face challenges, technology companies like Broadcom are emerging as the new drivers of economic expansion. This trend is likely to continue in the years ahead, as technological advancements reshape various sectors of the economy.

Implications for Investors:

For investors, Broadcom's success story underscores the importance of identifying companies with strong growth potential, innovative products, and a clear vision for the future. Investing in such companies can provide significant returns over the long term, as demonstrated by Broadcom's impressive stock performance.

Conclusion:

Broadcom's overtaking of Eli Lilly to become the eighth-largest U.S. company by market capitalization is a momentous event with far-reaching implications for both companies and the broader market. It highlights the growing importance of technology in the U.S. economy and underscores the need for traditional industries to adapt to the changing landscape. For investors, Broadcom's success story serves as an inspiring example of the rewards that can be reaped from investing in innovative companies with a bright future.

June 17, 2024

Tech Letter

Mad Hedge Technology Letter
June 17, 2024
Fiat Lux

Featured Trade:

(INNOVATION IS THE SAVIOR)
(TTDKY), ($COMPOQ)

Innovation Is The Savior

Tech Letter

The only way out of the mountain of US Federal debt black hole is to innovate out of it via the tech sector ($COMPQ).

That is the only way.

A savior can only come in one form and that is it.

Nothing will forgive these trillions of debt and the pile is growing by the day.

The close to $35 trillion and counting will increasingly be a pain in the side of US businesses and that includes tech companies listed on the stock exchange.

Innovation leads to surging productivity manifesting in revenue gains that make it possible to dig ourselves out of this situation where interest expense drags us further down the rabbit hole.

Innovation has happened before to the US economy in the past like the gas-powered car and the creation of the internet.

It’s likely to happen again as well.

Instead of one big idea, it could come in the form of many solid yet meaningful gains.

One just came in that could truly improve the productivity of American tech and that is from Japan’s TDK (TTDKY) which boasted a breakthrough in materials used in its small solid-state batteries.

The batteries set to be produced will be made of an all-ceramic material, with oxide-based solid electrolyte and lithium alloy anodes.

The high capability of the battery to store electrical charge, TDK said, would allow for smaller device sizes and longer operating times, while the oxide offered a high degree of stability and thus safety.

The breakthrough is the latest step forward for a technology industry experts think can revolutionize energy storage, but which faces significant obstacles on the path to mass production, particularly at larger battery sizes.

Solid-state batteries are safer, lighter, and potentially cheaper and offer longer performance and faster charging than current batteries relying on liquid electrolytes. Breakthroughs in consumer electronics have filtered through to electric vehicles, although the dominant battery chemistries for the two categories now differ substantially.

The most significant use case for solid-state batteries could be in electric cars by enabling greater driving range.

TDK, which was founded in 1935 and became a household name as a top cassette tape brand in the 1960s and 1970s, has lengthy experience in battery materials and technology.

The US federal debt is annualizing at a loss of $2 trillion at a time of full employment.

Imagine the devastation if we need to do quantitative easing again while already burning $2 trillion per year.

The number needed to pull us out of a recession could be $8-$15 trillion and that will come with a nasty set of inflationary outbursts.

The number of full-time jobs has fallen off a cliff and tech firms have cut the bloat.

It will be the ingenuity of tech companies like Japan’s TDK that will infuse the US economy will much-needed productivity.

I believe if the tech sector can keep peppering us with these breakthroughs in productivity, progress can supersede the out-of-control fiscal spending that has launched an uncontrollable bout of inflation in the US.

Remember that the top tech stocks in the world have been shielded from inflation only because they have hopped on the generative AI train.

For the rest of tech, inflation is hitting them like a sledgehammer between the eyes.

The biggest beneficiaries of cutting-edge innovation would be the share prices of the best tech stocks.

As it stands, tech will keep grinding higher in the current conditions, but better-than-expected innovation would shoot tech stocks to the moon and include a wide breadth of participation while putting a cap on inflation.

June 17, 2024 - Quote of the Day

Tech Letter

“Recession is when a neighbor loses his job. Depression is when you lose yours.” – Said Former US President Ronald Reagan

Trade Alert - (AMD) June 17, 2024 - STOP LOSS - SELL

Tech 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

June 17, 2024

Jacque's Post

(CHINA HAS A MESSAGE FOR AUSTRALIA AND IT BEGINS WITH A PANDA)

June 17, 2024

Hello everyone,

Week ahead calendar

Monday, June 17

8:30 a.m. Empire State Index (June)

Earnings: Lennar

Tuesday, June 18

8:30 a.m. Retail Sales (May)

9:15 a.m. Capacity Utilization (May)

9:15 a.m. Manufacturing Production (May)

10 a.m. Business Inventories (April)

12:30 a.m. Australia Interest Rate Decision

Previous: 4.35%

Wednesday, June 19

Juneteenth Holiday

10 a.m. NAHB Housing Market Index (June)

2:00 a.m. UK Inflation Rate

Previous: 2.3%

Thursday, June 20

8:30 a.m. Building Permits preliminary (May)

8:30 a.m. Current Account (Q1)

8:30 a.m. Continuing Jobless Claims (06/08)

8:30 a.m. Housing Starts (May)

8:30 a.m. Initial Claims (06/15)

8:30 a.m. Philadelphia Fed Index (June)

7:00 a.m. UK Interest Rate Decision

Previous: 5.25%

Earnings: Kroger, Darden Restaurants

Friday, June 21

9:45 a.m. PMI Composite preliminary (June)

9:45 a.m. S&P PMI Manufacturing preliminary (June)

9:45 a.m. S&P PMI Services preliminary (June)

10 a.m. Existing Home Sales (May)

10 a.m. Leading Indicators (May)

2:00 a.m. UK Retail Sales

Previous: -2.3%

Earnings: CarMax

The summer season is upon us. Analysts are divided on how the market will behave over the next few months. Some see a 20% to 30% correction. Others see a sideways move and then more upside. The market taking a breath is not a bad thing. I am not ruling out DOW 38,000 or even an extension to 37,000.

The Reserve Bank of Australia and the Bank of England are scheduled to set their interest rates this week. All eyes will be on the Bank of England this week to see if it follows the lead of the European Central Bank in lowering its rates. Some analysts are predicting that the Bank of England will cut as many as three times this year.

The Diplomatic Play of the Panda Loan

China’s pandas can be seen as ambassadors with a significant role to play in global politics.

Adelaide Zoo will receive a pair of pandas soon to replace Wang Wang and Fu Ni, who have been in Australia for 15 years. They will be returned to China.

The Chinese premier, Li Qiang is in Australia now. It’s the first trip to Australia by a Chinese premier in seven years. The Chinese government's loan to Australia of two new pandas conveys a message regarding Australia-China relations.

Loaning pandas is seen as promoting mutual partnerships between China and the recipient countries while withdrawing pandas, as China did with the US in 2023, was widely viewed as souring relations.

The panda loan can be interpreted as a ‘seal’ agreed to once China turns a corner with a country, be it in diplomatic, trade, or security matters.

Australia has given various marsupials, platypuses, and crocodiles to friends and allies over the last two decades, while Sri Lanka and Vietnam have gifted elephants to many countries.

Animal diplomacy dates back centuries. During the 1950s, Chairman Mao Zedong was known to send pandas as gifts to the country’s communist allies, which included North Korea and the Soviet Union.

US First Lady, Pat Nixon, commented during a state function in China about her love for animals, and in a period when the two countries were normalizing relations, the Chinese government gifted them.

By the 1980s, panda diplomacy changed, and pandas were loaned for 10 years with the option to extend.

This shift to panda lending allowed China to keep promoting its image abroad and build “guanxi”, a Mandarin term for trust. Loaning pandas was seen as promoting mutual partnerships between China and the recipient countries.

In turn, host countries would pay an annual fee of about $1 million per bear.

Two pandas were sent to Scotland in 2011 after the two countries signed an oil deal.

The list of panda recipients includes Denmark, Germany, South Korea, Russia, and Qatar.

From left, Penny Wong, Australia’s foreign minister, South Australian Premier, Peter Malinauskas, and China’s Premier, Li Qiang pictured visiting Adelaide Zoo in Australia on Sunday, June 16, 2024.

Australia hits the No.2 spot of the most unaffordable cities to live in in the world. The cost-of-living crisis is forcing many people to leave Sydney and Melbourne for the State of Queensland. Brisbane is cheaper, but the gap is quickly narrowing between house prices in Brisbane and Sydney and Melbourne. Regional areas such as the Gold Coast, Sunshine Coast, Toowoomba, and Brisbane outskirts have seen strong growth. With rate cuts not forecast in Australia until 2025, the migration north is only set to gather pace.

Portfolio Update

If you own any of these stocks exit out of them completely. There are opportunities setting up where our funds would be better placed.

Stock Purchase Price & Date Price Friday (06/14)

Delta Airlines (DAL) $40.54 (01/08/24) $48.72

Solaris Resources (SLSR) $3.33 (04/24/24 $3.08

Arizona Metals Corp $2.21 (04/24/24) $1.59

Global X Silver Miners $23.00 (02/15/24) $31.58

ETF (SIL)

Note: Re: (SIL) By selling out of (SIL) I am not saying the bull market in the metals is over. I want to take the profit and put it into another metal play that is setting up nicely.

Liberty All State

Equity Fund (USA) $6.66 (02/02/24) $6.78

Market Update

US$ - expecting the dollar to rally a little more before topping out. Euro, Pound Sterling, Aussie and Kiwi, and Japanese Yen should weaken in the short term. Those downside moves will provide a great opportunity to enter long positions. Look at FXA, FXE, and FXB.

S&P 500 – market could pull back to 5,140 before the upside continues.

Gold – correction in progress – looking for support around 2250 – 2270, but correction to 2220 cannot be ruled out.

Bitcoin – correction in progress - possible targets are 60,000, 55,000, and maybe even as low as 52,000. Scale in as the crypto falls to these price zones.

Cheers,

Jacquie