Global Market Comments
October 2, 2024
Fiat Lux
Featured Trade:
(FRIDAY OCTOBER 25 SALT LAKE CITY UTAH STRATEGY LUNCHEON)
(TRADING DEVOID OF THE THOUGHT PROCESS),
(SPY), (INDU), (TLT), (USO)
It seems that all anyone has to do is blow their nose these days, and high-frequency trading will amplify the movement, a multiple of what we would have seen in past years. It's like the butterfly flapping its wings in the Amazon.
The exit of institutional money to trading in in-house dark pools, the concentration of trading into single-sector exchange-traded funds (ETFs), and the departure of the traditional individual investor are all exaggerating these moves. It doesn’t help that stock markets are sitting just short of all-time highs.
You could run off and trade something else besides stocks. That’s easier said than done, as virtually all other asset classes have become equally untradeable.
Bonds have gone crazy, rising to mathematically impossible levels. You’re still trying to catch a falling knife in commodities, as the recent action in oil proved, but the Chinese may have just reversed that. Precious metals are at all-time highs. Foreign currencies have gone comatose, with the US dollar rolling over like the Bismarck.
What’s a poor trader to do? Take up the action in collectible Beanie Babies? Rare French postage stamps? Rare vintage Madeira’s?
There are only two ways to deal with a market like this. Turn off the TV, cancel your newswire feeds, quit reading research, and just look at your screens.
Buy the low numbers and sell the high ones.
It is no more complicated than that. Don’t confuse matters with the thought process. The markets are now so illogical you will only muddy the waters.
The other method is to become boring. Just find the cheapest, low-fee index fund you can find, like one of Vanguard’s, buy it, and stuff it under your mattress. I’m pretty confident that it will be up 10% by the end of the year. 90-day T-bills at 4.75% is not a bad second.
That means you will probably beat most hedge managers out there, as you would have done for the past seven consecutive years. Try to earn more than 10% in these choppy markets, and you could end up losing 10% or 100%.
As for me, I am going to stick with trading. At least I’ll be there when it turns easy again, which has to be soon, and I’ll make a hell of a lot more than 10%.
And was never very good at the “boring” thing.
My New Investment Strategy
One of My Rare Madeira's
Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Luncheon, which I will be conducting in Sarasota, Florida on Thursday, January 16, 2025. The cost of the luncheon will be $277.
An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period.
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 Sarasota hotel. The precise location will be emailed with your purchase confirmation. Mad Hedge guests will be assigned their own dedicated table in a ballroom with 200 other participants.
I look forward to meeting you, and thank you for supporting my research.
To purchase tickets for this luncheon, please click here.
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
Mad Hedge Biotech and Healthcare Letter
October 1, 2024
Fiat Lux
Featured Trade:
(SAILING TO BIOTECH VALHALLA)
(VKTX), (NVO), (LLY), (AMGN), (PFE)
In a market full of duds and darlings, every once in a while, you stumble upon a stock that skyrockets so fast it gives you whiplash. Viking Therapeutics (VKTX) is that stock and boy, am I glad I trusted my gut on this one.
We're talking a journey from $4 to $62 in what feels like a blink of an eye - a voyage straight to biotech Valhalla, if you will. A 1,500% gain? Somebody hand me my horn of mead – and maybe a bigger treasure chest.
See what I did there? Viking stock, sailing to Valhalla – sorry, I couldn't resist. Anyway, if you missed out on this raid, don't worry. This biotech longship is still sailing strong, and it’s only getting started.
Now, I've seen my fair share of biotech booms and busts over the years, from the dizzying heights of the genome sequencing craze to the sobering lows of failed drug trials.
But this obesity drug market? It's shaping up to be the mother of all biotech booms.
At the heart of Viking's meteoric rise is a little molecule called VK-2735, a GLP-1 / GIP receptor agonist.
In layman's terms, it's a weight loss wonder drug that's got Wall Street salivating like Pavlov's dogs at dinnertime.
And why wouldn't they? We're talking about a market that could be worth north of $150 billion annually by the early 2030s.
Let's crunch some numbers, shall we? In the first half of 2024, Novo Nordisk's (NVO) dynamic duo, Ozempic and Wegovy, raked in a cool $11.7 billion.
Not to be outdone, Eli Lilly's (LLY) tag team of Mounjaro and Zepbound pulled in $6.66 billion. That's enough cash to make even a seasoned hedge fund manager's eyes water.
But here's where it gets really interesting. Viking's VK-2735, in its Phase 2 Venture study, showed weight loss results that could make even the most stubborn bathroom scale do a double-take. We're talking up to 14.7% weight loss from baseline in just 13 weeks.
Now, before you start maxing out your credit cards to buy Viking stock, let's pump the brakes a bit. This data is still in its infancy, like a toddler taking its first wobbly steps.
We're talking about a study with just 35 patients. That's barely enough people to fill a small yoga class, let alone stake billions of dollars on.
And let's not forget about safety. While VK-2735 seems to be playing nice overall, there are a few wrinkles to iron out.
The highest dose saw a 20% dropout rate, which is about as concerning as finding a shark in your swimming pool. Most patients experienced some side effects, with nausea, diarrhea, and constipation leading the pack.
Not exactly a walk in the park, but then again, no pain, no gain, right?
Looking ahead, Viking's still got its work cut out. They're aiming to kick off a Phase 3 study by Q1 2025, which means we might not see VK-2735 hit the market until Q1 2027. In biotech years, that's practically an eternity.
But here's the kicker - this delay might actually work in Viking's favor. While they're dotting their i's and crossing their t's, Novo Nordisk and Eli Lilly are out there doing the heavy lifting, expanding the market and greasing the wheels with insurers.
Still, Viking's not resting on its laurels. They're working on a monthly dosing regimen and an oral version of VK-2735.
If they pull that off, it could be a game-changer. After all, who wouldn't prefer popping a pill over jabbing themselves with a needle?
Of course, this isn't a one-horse race. The obesity drug market is starting to look like a biotech version of the Oklahoma Land Rush, with everyone from Amgen (AMGN) to Pfizer (PFE) trying to stake their claim.
But with $935 million in the bank and a net loss of only $50 million for the half-year, Viking's got the financial firepower to go the distance.
So, what's the play here? Well, given the market's current love affair with all things GLP-1, Viking's strong financial position, and the potential of both VK-2735 and their NASH candidate VK2809, I'm cautiously bullish on Viking stock.
It's a high-risk, high-reward proposition, but then again, isn't that what makes this game so damn exciting? Just don't forget to pack your Dramamine - this ride's bound to have some turbulence.
Global Market Comments
October 1, 2024
Fiat Lux
Featured Trade:
(HOW TO AVOID THE PONZI SCHEME TRAP)
(TESTIMONIAL)
I spent a sad and depressing, but highly instructional evening with Dr. Stephen Greenspan, who had lost most of his personal fortune to Bernie Madoff.
The University of Connecticut psychology professor had poured the bulk of his savings into Sandra Mansky's Tremont feeder fund; receiving convincing trade confirms and rock-solid custody statements from the Bank of New York.
This is a particularly bitter pill for Dr. Greenspan to take, because he is an internationally known authority on Ponzi schemes and published a book entitled Annals of Gullibility-Why We Get Duped and How to Avoid It.
It is a veritable history of scams, starting with Eve's subterfuge to get Adam to eat the apple, to the Trojan horse and the Pied Piper, up to more modern-day cons in religion, politics, science, medicine, and yes, personal investments.
Madoff's genius was that the returns he fabricated were small, averaging only 11% a year, making them more believable. In the 1920's, the original Ponzi promoting a scheme involving international postal money orders promised his Boston area Italian immigrant customers a 50% return every 45 days.
Madoff also feigned exclusivity, often turning potential investors down, leading them to become even more desirous of joining his club.
By now, most Madoff investors have gotten the bulk of their funds back after several highly publicized asset liquidations. But it took eight years to get them.
Once burned, twice forewarned.
Once in prison, Madoff’s wife divorced him; one son died of cancer, and the other committed suicide. Madoff died in prison in 2021.
Suffice it to say, if it’s too good to be true, it isn’t.
In Silicon Valley, you’re either a unicorn or a dinosaur, and if you are the latter, you are uninvestable,” said a venture capital friend of mine.
