“Happiness is having a large, loving, caring, close-knit family in another city,” said the comedian, George Burns, who lived to over 100.
Come join me in the grand appointments of the Princess Coral on an adventurous 16-day cruise from Los Angeles, California to Fort Lauderdale, Florida through the Panama Canal.
The ship departs from the Port of San Pedro, Los Angeles at 12:00 PM on Thursday, December 19, 2024 and reaches Fort Lauderdale at 7:00 AM, on Saturday, January 4.
The ship will make day stops at Huatulco, Mexico, Puerto Chiapas, Mexico, Puntarenas, Costa Rica, Fuerte Amador, Panama, and Cartegena, Columbia. There will be seven full days at sea in the Pacific Ocean and The Caribbean.
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 Princess. I just checked availability and the cheapest offer is for an inside stateroom from $2,393 per person. If you do the math, that is cheaper than staying at Motel 6 for 16 days and eating at Taco Bell every day, which is why the cruise industry is booming. Or, you can step up to $4,202 per person for a luxury mini-suite with an outside deck.
Just visit their website at https://www.princess.com/en-us or call them directly at 800-774-6237 to make your own arrangements. Only reserve cruise number 6501 for 2024.
The weather this time of year should be balmy and tropical, depending on our luck. A brisk walk four times around the boat deck adds up to a mile. Full Internet access will be available, for a price, to follow the markets. Princess is now using the SpaceX Starlink satellite access on all their ships.
Two dinners during the voyage will be black tie, so bring two tuxes or formal dresses.
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.
See you aboard!
Come Join Me at Sea
(GOOGL), (META), (NVDA), (PLTR), (AI), (MSFT)
It seems like every time I blink, artificial intelligence takes another quantum leap, reshaping industries faster than you can say "algorithm." From healthcare diagnostics to financial modeling, AI isn't just the future—it's the present, and it's knocking down doors like an unwelcome auditor.
But before we pop the champagne, let's address the elephant in the server room: AI hallucinations. Yes, you read that right. AI models sometimes generate information so off-base you'd think they were on an acid trip.
Case in point: Google's (GOOGL) Gemini model recently suggested we should slather glue on pizza. Now, I'm all for culinary experimentation, but that's a hard pass. It's funny until you realize this is the same tech we're trusting with our financial models and medical diagnoses. Suddenly, it's not so hilarious, is it?
Enter HyperWrite's Reflection 70B. I know what you're rolling your eyes on yet another AI model. So, what makes this one special?
Well, Reflection 70B is using something called "Reflection Tuning." In layman's terms, it's like giving AI a built-in BS detector.
Unlike other models that learn from past mistakes - looking at you, Meta's (META) LLaMA - Reflection 70B catches and corrects its errors in real-time. It's like having a fact-checker sitting on the AI's shoulder, slapping it upside the head every time it tries to feed you nonsense.
Now, why should you care? Let's break it down with some cold, hard numbers.
The global AI market is projected to hit $1.59 trillion by 2030. That's trillion with a 'T.' We're talking about a compound annual growth rate of 38.1%.
To put that in perspective, that's like your money doubling every two years.
But here's the kicker - the companies that can offer reliable AI solutions will be the ones scooping up the lion's share of this cash tsunami.
Think about sectors like finance, healthcare, and legal services. In these fields, a single error can cost millions. Having an AI that can self-correct in real-time isn't just a neat party trick - it's the difference between staying afloat and sinking faster than the Titanic.
Let's talk numbers again. Companies prioritizing AI reliability are seeing a 27% bump in customer satisfaction and a 15% boost in revenue growth compared to their less reliable counterparts.
In a market where trust is more precious than gold, being able to mitigate AI errors is like having a money-printing machine (only legal and less likely to get you a visit from the Feds).
Remember the Knight Capital fiasco in 2012? A tiny software glitch cost them $440 million in 45 minutes. That's not a typo - 45 minutes.
The company collapsed faster than a house of cards in a hurricane. Now, imagine if that glitch could have been caught and fixed in real-time. We might be telling a very different story.
But it's not just about avoiding catastrophic losses. Governments worldwide are sharpening their regulatory knives.
The EU's Artificial Intelligence Act could slap companies with fines up to $33.28 million or 6% of global annual revenue for non-compliance. Over in the U.S., the FTC is flexing its muscles, warning that faulty AI could lead to severe penalties.
By embracing models like Reflection 70B, companies aren't just playing it safe—they're positioning themselves as the poster children of ethical, responsible AI.
Now, let's zoom out for a second. While we're talking about AI models, we can't ignore the hardware powering this digital revolution.
As always, any AI talk wouldn’t be complete without mentioning Nvidia (NVDA). If AI models are the race cars, Nvidia's GPUs are the nitro-boosted engines.
The AI chip market is expected to grow at a CAGR of 37.1% from 2022 to 2030. Investing in Nvidia is like buying stock in electricity during the industrial revolution - it's that fundamental.
But it's not just about the big players. Keep an eye on companies like Palantir Technologies (PLTR) and C3.ai (AI). They're the ones helping businesses navigate the murky waters of AI compliance and ethics. As regulations tighten, these firms are set to become the one-stop-shop for everything AI - versatile, essential, and always in demand.
Let's not forget the AI writing assistance market. It's not just for helping college kids cheat on their essays anymore.
Microsoft (MSFT) is pushing boundaries with GitHub Copilot, an AI that can write code faster than you can say "syntax error."
Not to be outdone, Alphabet (GOOGL) is beefing up Google Docs with Smart Compose, making clunky emails a relic of the past.
The Natural Language Processing market is projected to hit $127.26 billion by 2028. That's not chump change - that's some serious investor catnip.
So, where does this leave us? AI isn't some far-off fantasy - it's here, it's now, and it's hungry for more. As technologies like Reflection 70B make AI more reliable, the investment opportunities are multiplying faster than rabbits on fertility drugs.
But let's not get carried away. No investment comes without risks. The regulatory landscape is shifting like sand dunes in a windstorm.
Companies that can't keep up might find themselves buried. And let's not forget the ethical concerns - privacy issues, bias, job displacement. These could turn public sentiment faster than you can say "Skynet."
The point is, the AI train isn't just leaving the station - it's already halfway across the country.
Whether it's Nvidia powering the engines, Palantir and C3.ai laying down the tracks, or Microsoft and Alphabet upgrading our daily tools, the opportunities are as vast as they are varied.
And with HyperWrite's Reflection 70B tackling one of AI's biggest hurdles, this journey is about to get a whole lot more interesting.
Mad Hedge Technology Letter
September 13, 2024
Fiat Lux
Featured Trade:
(ALTERNATIVE TECH GETS HAMMERED)
(BTC), (ETH), (COIN), (NVDA), (ADA), (XRP)
The goalposts are narrowing with liquidity not making it out to the outer edge of the risk spectrum.
Bitcoin has had some weaknesses but the alternative currencies have really felt the guillotine drop.
When push comes to shove, the tide doesn’t lift all boats in eroding economic conditions.
Yes, we are about to start cutting rates, but that is because the economy is starting to stagnate and tech stocks have felt the full brunt of it.
Tech stocks have had a rough September and it was going to take a lot to move the needle with these lofty prices.
It was about time that investors took profits.
What has that meant for crypto?
It means a grim short-term outlook that the industry will need to endure.
11 U.S. spot bitcoin exchange-traded funds had their worst day in over four months after the report, as more than $287 million was collectively withdrawn from the ETFs.
The data was bad through the end of the week. On Friday, the Bureau of Labor Statistics reported a cooldown in the labor market with August payrolls falling short of expectations.
Last week, Cryptocurrency exchange Coinbase wrapped up its worst week of the year. Bitcoin miner Marathon Digital tumbled 20%.
September is historically a difficult trading month for crypto assets, with bitcoin notching an average loss of 4.8%.
The total market cap of crypto is down close to 30% from its 2024 peak of $2.67 trillion and is now at $1.9 trillion. Altcoins like Solana’s token, XRP, and Cardano’s ADA all dropped more than 8% last week.
While it was a rough week for risky assets of all sorts, investors over-indexed in crypto stocks had it particularly bad.
Coinbase, stuck in a court battle with the SEC over whether the exchange engages in unregistered sales of securities, plummeted 20% to its lowest since February. MicroStrategy, the bitcoin collecting company founded by Michael Saylor, dropped 26% in the last two weeks.
The top Bitcoin mining companies all ended last week with double-digit declines, led by CleanSpark’s 24% plunge. Riot Platforms lost 17%.
As investors turn to what’s coming, one big area of focus is the Federal Reserve.
If the Fed does in fact lower rates, I do see crypto and tech stocks reflating.
However, some alternative crypto stocks might get left behind and I fear for an asset like ether which was once seen as the second-best crypto.
Ether’s price has fallen to the point that suggests it really isn’t that important to the crypto industry.
Bitcoin has stood out as the all-weather crypto asset that could benefit most during the easing cycle.
In truth, technology stocks delivered some type of mini miracle by performing well when rates turned higher.
There is definitely a good chance that initiating a lower rate cycle might add rocket fuel to tech stocks.
Remember that tech stocks are the only equities that have grown their earnings during the past few years.
Much of the recent success is also due to chip stock Nvidia which has led the charge for tech companies surging past other big tech companies as the most influential stock in the world.
As we shake out the good from the bad, I urge readers to get into the best of breed, in tech and not crypto, when risk is initiated again.
I also urge caution to anyone who likes to get into crypto that it is a high-risk asset that could get dumped one day if people need capital to pay for mortgages and food.
“Success is a lousy teacher. It seduces smart people into thinking they can't lose.” – Said Founder of Microsoft Bill Gates
(SUMMARY OF JOHN’S SEPTEMBER 11, 2024, WEBINAR)
September 13, 2024
Hello everyone.
TITLE
“Wake-up Call”
TRADE ALERT PERFORMANCE
September: -0.16%
2024 year to date: +33.25%
Average annualized return: +51.62% for 16 years
Since inception: 709.88%
PORTFOLIO
GLD 10/$215/$220 call spread 10%
THE METHOD TO MY MADNESS
September is living up to its reputation with whiplash type movements, and a double top on the charts.
September 18 interest rate cut is an almost certainty, but how much of it is already priced into the market?
The next sell-off is the one you buy into for a post-election rally.
US dollar begins to weaken and could do so for years.
Tech stocks will rally again after a much-needed correction.
Energy is in the doldrums because of recession fears.
Buy stocks & bonds on dips in ALL sectors.
THE GLOBAL ECONOMY – WEAKENING
The Fed waited too long to cut interest rates as the economy is now undeniably weakening.
Nonfarm payroll report fades at 142,000
Headlines Unemployment rate stays at 4.2%
Previous two months saw substantial downward revisions.
ADP Employment Change Report hits 31/2 year low, up only 99,000 in August.
Personal Consumption Expenditures price index rises a modest 0.2% in July.
UD GDP Reaccelerates to 3.0% growth in Q2, up from the previous estimate of 2.8%
STOCKS – NOSEDIVE
John says if the Fed doesn’t cut by 0.50% in September the stock market will crash
Look for two bottoms on September 18 and October 20.
NVDA dives on fabulous earnings, one of the greatest “Buy the rumour, sell the news” moves of all time.
Broadcom beats and Stock tanks, driven by strong sales of its AI products and VMware software.
Biden blocks Nippon Steel takeover of US Steel, no doubt to save the jobs these deals usually destroy.
Volatility Index soars 50% in a Day, from $14 to $22.
ISM Manufacturing PMI comes in weak, with just 47.2% of purchasing managers reporting expansion in August.
Eli Lily is now a trillion-dollar stock, the first biotech to do so.
Suggestions -
Look to buy JPMorgan as it gets closer to the 200MA. Netflix (NFLX) buy.
UPS- buy/ good LEAPS trade, UNP – China recovery play. Caterpillar (CAT) falling interest rate play – long term hold.
(ROM) Technology ETF – watch for good entry.
BONDS – NEW HIGHS
The Yield curve has de-inverted, meaning that short term interest rates have fallen below long-term ones.
Two-year interest rates at 3.72% are now 0.03% lower than ten-year ones at 3.75%.
It’s a clear signal to the Fed that rates must be cut soon.
Yield Chasers Post Record Demand for Junk Bonds.
That’s helped make 2024 the busiest year for issuance of new corporate high-yield bonds, with $357 billion sold so far.
Market prices in 50-point basis cut for September, holding on to massive rally.
A cut of only 25 basis points on September 18 could give us a $5 selloff.
The September 6 Nonfarm Payroll Report and Unemployment rate will be crucial.
Buy (TLT), (JNK), (NLY), (SLRN) and REITS on dips.
Also 90-day T-bills at 4.97%
FOREIGN CURRENCIES – DOLLAR IS TRASH
Dollar hits seven Month Low, as US interest rates loom. John says it could be a decade long move.
The Yen Carry Trade is Back, with hedge funds piling back into positions they jumped from only two weeks ago.
It’s a matter of math, John says, now that the Bank of Japan has given up on raising interest rates anytime soon.
What this means is more leverage, risk and volatility for global financial markets. John loves the volatility.
The prospect of falling interest rates means that the greenback is out of favour.
Buy (FXA), (FXE), (FXB), (FXC)
ENERGY & COMMODITIES – CRUDE AWAKENING $60 in play
Crude Oil now down on the Year, after a sharp weekend sell-off.
Blame can be spread amongst a weak China, lost OPEC discipline, and over production.
The bearish Goldman Sachs commodities report was also a factor.
US Oil Production hits all-time high. In August 2024, U.S. oil production hit a record 13.4 million barrels per day according to the U.S. Energy Information Administration.
Big Oil has become more productive as horizontal drilling and hydraulic fracturing, which is also known as fracking, have seen technological breakthroughs.
The fossil fuel industry benefits from tax incentives, such as the intangible drilling costs tax credit, that are built into the tax code. The intangible drilling costs tax break is expected to benefit oil and gas companies by $1.7 billion in 2025 and $9.7 billion through 2034.
PRECIOUS METALS – NEW HIGHS
Goldman goes Big on Gold
Central banks in emerging market countries are continuing to buy gold – with purchases tripling since the middle of 2022 amid fears of U.S. financial sanctions and a mountain of sovereign debt.
Goldman is taking a more selective approach to commodity investing, pushing gold but avoiding crude oil and copper prices as China continues to drag.
Silver dives on economic slowdown, enters a sideways range.
A global monetary easing is at hand.
Buy precious metals on the dips because rates are now falling decisively.
Buy (GLD), (SLV), (AGQ), and (WPM) on dips.
REAL ESTATE – READY FOR TAKEOFF
Pending Home Sales drop 5% and 8.5% YOY, on a signed contract basis.
Many buyers are waiting until after the presidential election to make a move
Pending home sales fell in all four regions last month.
The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election.
Manhattan Commercial Real Estate has bottomed, and bottom fishers are swooping in. Can San Francisco be far behind?
Mortgage Rates Hit New 2024 Low. The average for a 30-year foxed loan was 6.23%, down from 7.5% high.
Sales of new U.S. single-family homes rocket by 10.6%.
TRADE SHEET
Stocks – buy the next big dip
Bonds – buy dips
Commodities – stand aside
Currencies – sell dollar rallies, buy currencies
Precious metals – buy dips
Energy – avoid
Volatility – sell over $30
Real estate - buy dips
NEXT STRATEGY WEBINAR
12:00 EST Wednesday, September 25
Lake Tahoe, Nevada
Cheers
Jacquie
Global Market Comments
September 13, 2024
Fiat Lux
Featured Trade:
(The Mad SEPTEMBER traders & Investors Summit is ON!)
(SEPTEMBER 13 BIWEEKLY STRATEGY WEBINAR Q&A),
(USO), (UUP), (FXA), (FXE), (FXC), (FXB), (DJT), ($INDU), (JPM), (BRK), (TSLA), (NVDA), (IBM), (CCJ), (BRK/B)
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 September 17-19. Learn from 20 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.
Below please find subscribers’ Q&A for the September 11 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Lake Tahoe Nevada.
Q: Will the Fed cut by 50 basis points at their next meeting?
A: The probability of that happening actually dropped by about half with the warm CPI report this morning with core CPI at 0.3%. That may have pushed the Fed from a 50% basis point rate cut back down to only 25%. I think if we only get 25%, the market will sell off. So that’s Wednesday next week. Mark that on your calendars—the market may well be on hold until then.
Q: Is $50/barrel oil (USO) coming by the end of this year?
A: No, but I think $60 is in the works. And that may be the bottom of this cycle because after that we expect an economic recovery, greater demand for oil, and rising prices in 2025. Until then, overproduction both in the US and in the Middle East is knocking prices down.
Q: Will the US dollar (UUP) continue its terrible performance through the end of the year?
A: Yes, and in fact, it may be for the next 10 years that the US dollar is weak—certainly 5—so any rally or dips you get in the currencies (FXA), (FXE), (FXC), and (FXB) I’d be buying with both hands.
Q: Where are you hiding at the moment?
A: 90-day T-bills, which are yielding 4.97%. You can buy and sell them any time you want, and the interest is only payable when you sell them.
Q: Is September 18th the selloff?
A: It depends on how much we do before then. Obviously, we’re making good progress today with the Dow ($INDU) down 700 points, so we shall see. However, the market is flip-flopping every other day, making it untradable—you can’t get any position and hold on to it long enough to make money, so it’s better just to stay out. There’s no law that says you have to be in the market every day of the year, and this is a day not to be in the market for sure.
Q: How will the presidential debate reaction affect the market?
A: There’s only one stock you have to follow for that and that’s the (DJT) SPAC, and that’s Trump’s own personal ETF, and it is down 13% today to a new all-time low. I believe that’s well below its IPO price, so anyone who’s touched that stock is losing money unless they got out at the top. That is a good signal.
Q: JP Morgan (JPM) stock had a steep pullback to $200/share—is it a buy here?
A: No, but we’re getting close. If we can get (JPM) close to its 200-day moving average at $188 on high volatility, that would be a fantastic buy, because (JPM) will benefit enormously from falling interest rates, and it is the world's quality banking play.
Q: Is it too soon on Berkshire Hathaway (BRK) and Tesla (TSLA)?
A: Yes on both. It’s too soon for anything right now. I wouldn’t touch anything before the interest rate cut unless you have a really special situation, and there are some out there.
Q: Do you think Nvidia (NVDA) could test $90 again?
A: It could very easily; it got within $10 of that last week. So, it just depends on how bad the news is and how scared people get in September.
Q: Is the end of carry trade affecting the market?
A: No, we had a big deleveraging there. Although people are going back in again now, it’s not enough to hurt the market.
Q: I heard Putin is threatening over raw materials. What do we get from Russia, and what stocks or ETFs would be impacted?
A: We get nothing from Russia anymore. We used to get a lot of commodities and oil from them, and that has ceased. Russia has essentially exited the global economy because of the sanctions and the war in Ukraine, so they can’t really hurt anyone at this point.
Q: What about Russia doing an end-run around with direct trade? BRICS block is going to make the dollar even more worthless in the future.
A: I don’t buy that at all. I’ve been covering sanctions for 50 years; they always work, but they always take a long time. You could always do black market trade through the back door, but the volumes are way down, and the profits are much less because people only buy sanctioned goods at big discounts. The oil that China is buying from Russia is something like a 30% discount to the market. They execute a high cost of doing business, and nobody wants to be in sanctions if they can possibly do avoid. That said, when the war ends, the sanctions may end. That could be some time next year when Russia completely runs out of tanks and airplanes.
Q: Should I buy Nvidia (NVDA) call options now?
A: It's not just a matter of Nvidia. It's what the general market is doing, and tech is doing. And tech is not doing that well—even on the up days. So I would hold off a bit on Nvidia.
Q: Why is Warren Buffet (BRK/B) unloading so much of his equity portfolio?
A: He thinks the market is expensive, and he has thought it has been expensive for years and he's been unloading stocks for years. He has something like $250 billion in cash now so he can buy whole companies in the next recession. Whether he'll live long enough to see that recession is another question, but his replacement staff is already at work and running the fund, so Berkshire will continue running on autopilot even after he’s gone.
Q: Is IBM an AI play?
A: (IBM) wants to think that it’s an AI play. They haven’t disclosed enough to the public to make the stock a real AI investment, so I would say it probably is, but we don’t know enough at this point, and there are probably too many other candidates to buy in the meantime.
Q: How do I invest in green energy stocks, and do you have any names for me?
A: Well here’s one right here and that’s the Canadian uranium producer Cameco (CCJ). There is a nuclear renaissance going on. China just announced an increase in their plants under construction from 100 to 115. You have the new modular technology ready to take off in the US, and it uses uranium alloys, or uranium aggregates, so it’s impossible for a plant to go supercritical. You also have other countries reactivating nuclear plants that have been closed, and California even delayed its Diablo Canyon shutdown by 5 years. So Nuclear is back in play, and we have an absolute bottom in the stock here and it just dropped 37%, in case you needed any more temptation. So this would be a very attractive alternative energy play for the long term right here.
To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, select your subscription (GLOBAL TRADING DISPATCH, TECHNOLOGY LETTER, or Jacquie's Post), then click on WEBINARS, and all the webinars from the last 12 years are there in all their glory.
Good Luck and Good Trading,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
1942 Grumman Wildcat on Guadalcanal