“For the first time in history, more people will die from eating too much food this year than not enough food, said my old friend and mayor of New York, Michael Bloomberg, about his attempt to ban 16-ounce soft drinks in the city.
(GOOG), (MSFT), (SMR), (OKLO), (BWXT), (LEU)
When Albert Einstein unlocked the mysteries of energy with E=mc², he probably didn't imagine we'd be using that energy to train algorithms to suggest better cat videos. Still, he actually might have appreciated this cosmic irony.
This was, after all, the same genius who cut a special cat door in his study just so his beloved Tiger could come and go as he pleased. (Trust me, after watching my own cat spend 20 minutes contemplating a closed door while completely ignoring the $200 cat flap I installed—a trade that's currently showing a negative ROI—I deeply understand Einstein's problem-solving mindset.)
But while Einstein only had to power one cat door, today's AI systems are consuming enough juice to power several small countries.
Right now, in the United States, data centers—those humming temples of computational power—are gobbling up about 3-4% of the country's total electricity supply.
Hold onto your utility bills, though, because by 2030, thanks to our ever-expanding AI ambitions, that number is expected to surge to a whopping 11% to 12%.
The International Energy Agency is watching this trend with raised eyebrows, projecting that global data center electricity demand will more than double between 2022 and 2026.
The numbers are stark: By 2026, AI operations will devour over 340 terawatt-hours of electricity annually.
Major tech companies aren't waiting for a crisis. Google (GOOG), trading at roughly $170.49, has already teamed up with Kairos Power on small modular reactors (SMRs), with their first 500-megawatt reactor coming online in 2030.
Microsoft (MSFT), at about $423.46, went even bolder, signing a 20-year deal to revive Three Mile Island's reactor through Constellation Energy. Yes, that Three Mile Island.
The market's reaction tells the story. NuScale Power Corporation (SMR) is up an eye-popping 481% this year, while Oklo Inc. (OKLO), with OpenAI's Sam Altman backing them, has gained 88%.
Even the old guard of nuclear power is seeing renewed interest, with BWX Technologies (BWXT) up 62% and Centrus Energy Corp (LEU) climbing 25%.
And these aren't just environmental plays - though the carbon-free power certainly helps with the PR.
What really has tech giants excited is nuclear power's reliability: constant, unwavering energy that solar and wind just can't match.
For AI operations that need to run 24/7, that's the difference between a smooth operation and a very expensive headache.
The regulatory landscape is shifting, too. The Nuclear Regulatory Commission is streamlining SMR approvals, creating faster paths to market for companies like NuScale and Oklo.
Early investors in these nuclear firms are playing a fascinating double game. They're betting the government will continue streamlining regulations while AI's voracious appetite for power keeps growing.
Of course, not everyone's thrilled about this nuclear renaissance. The ghosts of Three Mile Island, Chernobyl, and Fukushima still haunt public perception.
But here's what might surprise the skeptics: according to the World Nuclear Association, nuclear power has caused fewer fatalities per unit of energy generated than any other power source.
In fact, nuclear's death rate of 0.07 deaths per terawatt-hour makes it safer than solar (0.02-0.06), wind (0.04), and significantly safer than coal (24.6).
Even more interesting: France, which gets 70% of its electricity from nuclear power, has some of the lowest carbon emissions and electricity costs in Europe.
The new small modular reactors are even safer, with passive safety systems that automatically shut down without human intervention or external power.
Still, some environmentalists argue we should stick to wind and solar. Noble idea, but here's the reality: when your AI systems are consuming electricity like a small nation, you can't afford to be picky about your power source.
The tech giants have done the math, and nuclear power, with its steady, carbon-free output, is looking less like a last resort and more like the only option.
Even Einstein knew when to make things simple—his cat needed a door, so he cut one. Today's AI leaders are taking the same practical approach to their energy needs.
For those watching this space, this creates a rare opportunity: a chance to back companies that are using century-old physics to power tomorrow's technology.
After all, sometimes the most profitable solutions are staring you right in the face—or in this case, purring quietly in your nuclear-powered data center.
Time to do the math... and maybe cut a few doors of our own.
Mad Hedge Technology Letter
December 6, 2024
Fiat Lux
Featured Trade:
(A SHORT TERM TRADE)
(UBER), (GOOGL), (TSLA), (WRD)
Uber’s (UBER) stock is almost 30% down from all-time high’s, and the stock was on a nice run from the lows of 2023 when the stock was trading around $25 per share.
There has been great optimism around the business, with revenge travel stoking a huge growth bump in the ride-sharing business.
Uber once burned through money like there was no tomorrow, but now it is a profitable business.
However, there are outsized risks just around the corner, and the stock has pulled back because the next risk might be existential.
They are running into one of the greatest innovators the world has ever seen.
Tesla (TSLA) and Elon Musk have made a lot of noise lately about self-driving robotaxis, and they do have their proprietary software with billions of driving hours of data.
Uber has nothing like this, and the more Elon Musk elbows out the competition about the self-driving technology, the more Uber’s share price sinks.
Uber is the tech company most affected if Musk successfully implements robo taxis as a main part of Tesla’s business.
By now, it is becoming quite apparent that EVs aren’t the holy grail of technology Musk is chasing after. It is merely a placeholder until he goes onto greater projects and technologies.
Sure, first, it would be rockets and space, but on Earth, Musk is after artificial intelligence through robots, and one of those applications would be self-driving automobiles.
Google’s Waymo is another long-term investors in self-driving tech that will destroy Uber’s business model as well.
Uber just said it would partner with robotaxi maker WeRide (WRD) to launch ride-hailing in Abu Dhabi. Uber said it would be the first time AVs are available on the Uber platform outside of the US and that Abu Dhabi would be the largest commercial robotaxi service outside the US and China when it launches in 2025.
Waymo (GOOGL) lately said it would expand its robotaxi service to Miami, Florida.
Waymo has previously tested vehicles in Miami, the company said, a city that provided “challenging rainy conditions” for its driverless vehicles, and Uber’s stock crashed 10% on this news itself.
Waymo said it is already providing 150,000 trips per week in Phoenix, Los Angeles, San Francisco, and Austin.
Uber still has to pay for over 160 million month active riders to get shuttled around on its app, and when they are muscled out of the technology by Google and Tesla, it is not guaranteed they will be able to license this high level of proprietary technology from these big tech stalwarts.
If you are Google or Tesla, why ever involve Uber when you could pick up their riders for pennies on the dollar after Uber bankrupts itself because of the high cost of employing human drivers?
Long term looks quite grim for Uber, and I don’t believe there is a magical elixir for the self-driving software. They are too far behind.
The one hunch I have is that over the past year, Waymo and Tesla have made the concept of the masses taking self-driving technology as a real service closer and closer.
Each day, we inch closer, and the day of full implementation will be a death knell for Uber.
However, in the short term, I do believe Uber’s stock is oversold, and it could stage a bounce back in the short to mid-term.
Any dive into the high $50 range would be a great buying opportunity for a quick trade in Uber. I wouldn’t buy and hold for the long haul, there are better options.
“Too much respect for authority inhibits innovation.” – Said Elon Musk
(THE WEIGHT LOSS REVOLUTION COULD TRANSFORM OUR ECONOMY)
December 6, 2024
Hello everyone
The weight loss revolution is having far-reaching economic effects
Shopping habits are changing with the advent of weight loss drugs, as are foods purchased and exercise habits.
The active ingredient in most weight loss drugs – including Mounjaro, Wegovy, and Ozeumpic – mimics a hormone called glucagon-like peptide-1 (GLP-1). That peptide slows digestion and sends fullness signals to the brain, resulting in people eating less.
Waistlines are not the only thing being reduced.
The drugs have created ripples across the US economy due to the country’s large uptake – about 7 million Americans take the drugs, according to Morgan Stanley, and that number is predicted to rise to 24 million by 2035.
Food shopping bills are being slashed - down from $400 per week to $150-$200, according to one family.
Res-Med – an Australian medical device company that makes CPAP machines for sleep apnea and is worth $56 billion – saw a drop in its share price earlier this year largely due to the belief that GLP-1s would lead to fewer people suffering from sleep apnea.
ResMed – chief executive Mick Farrell told the ABC’s The Business the opposite had occurred, with the company’s data indicating patients with sleep apnea using GLP-1 drugs were almost 11 percent more likely to use a CPAP machine.
The food and fashion industry could be reshaped.
Some studies indicate GLP-1 may change food preferences and reduce cravings for processed foods while boosting the desire for fresh fruit and vegetables.
It appears to be typical for most people using GLP-1s to reduce their calorie consumption by about 30 to 35 percent.
Adam Spielman is the head of future health at Citigroup and co-authored a report looking at the reach of GLP-1 medications in the US and possible future commercial implications.
He believes the weight loss drugs could have “a profound effect” on the economy. He expands this argument by pointing out that if 20 percent of Australians end up taking these drugs, then it is quite easy to argue that total calorie consumption in Australia could fall by roughly 6 percent. And the food products that would benefit the most would be fruit and vegetables. The fast-food industry may face its worst nightmare – people not wanting their type of food anymore because of different food tastes and behaviours. This would force the industry to shift its offering to fit in with the changing palates of customers.
Weight loss pills will change society, but it will take decades to really understand what the true impact will be.
The worst telecom hack in U.S. history
Many Americans’ data have been stolen in a telecoms attack allegedly carried out by a Chinese hacking group dubbed “Salt Typhoon.”
The White House has confirmed that at least eight U.S. telecom firms, as well as dozens of nations, have been impacted by this attack.
According to the FBI, the hackers used their access to telecom networks to target the metadata of a large number of customers, including information on the dates, times, and recipients of calls and texts.
The hackers also succeeded in retrieving the actual audio files of calls and content from texts from a much smaller number of victims.
US government officials and prominent political figures have also been impacted by this hack.
Telephones belonging to then-presidential and vice-presidential candidates Donald Trump and JD Vance were also affected.
China has denied all claims.
Cybersecurity needs to be bolstered to fill the gaps that the Chinese are apparently exploiting.
Cyber-attacks are our modern warfare. So, if we can understand that, then cyber security companies should always do well and should be part of any long-term portfolio.
Housekeeping
Thank you to those who joined the monthly Zoom meeting on December 5.
Cheers
Jacquie
Global Market Comments
December 6, 2024
Fiat Lux
Featured Trade:
(JOIN ME ON MY JANUARY 3, 2025 PANAMA CANAL SEMINAR AT SEA LUNCHEON)
(TESTIMONIAL)
(AN EVENING WITH TRAVEL GURU ARTHUR FROMMER)
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
Dear Mr. Thomas,
Thanks for the 10-bagger on Palantir. I bought it at $7.50 and it’s now at $63.50, so I'd call that close enough to qualify. You pointed me to this company long ago, and I was patient.
Best regards,
David
It was with great sadness that I learned of the passing of travel guru Arthur Frommer at the age of 95. Arthur had a great influence on my life.
Since many of you are now planning summer vacations, I thought I would pass on what I learned from the ultimate travel guru of all time.
When I backpacked around Europe in 1968, I relied heavily on Arthur Frommer’s legendary paperback guide, Europe, on $5 a Day, which then boasted a cult-like following among impoverished but adventurous Americans. The charter airline business had just taken off, plunging airfares, and suddenly, Europe came within reach of ordinary Americans like me.
Over the following years, he directed me down cobblestoned alleyways, dubious foreign neighborhoods, and sometimes converted WWII air raid shelters to find those incredible travel deals. When he passed through town some 60 years later, I jumped at the chance to chat with the ever-cheerful worshipped travel expert.
Frommer believes there are three sea change trends going on in the travel industry today. Business is moving away from the big three travel websites, Travelocity, Orbitz, and Priceline, who have more preferential lucrative but self-enriching side deals with airlines than can be counted, towards pure aggregator sites that almost always offer cheaper fares, like Kayak.com, Sidestep.com, and Fairchase.com.
There is a move away from traditional 48-person escorted bus tours towards small group adventures, like those offered by Gap Adventures, Intrepid Tours, and Adventure Center, that take parties of 12 or less on culturally eye-opening public transportation.
There has also been a huge surge in programs offered by universities that turn travelers into students for a week to study the liberal arts at Oxford, Cambridge, and UC Berkeley. His favorite was the Great Books programs offered by St. John’s University in Santa Fe, New Mexico.
Frommer says that the Internet has given a huge boost to international travel but warns against user-generated content, 70% of which is bogus, posted by the hotels and restaurants touting themselves.
The 94-year-old Frommer turned an army posting in Berlin in 1952 into a travel empire that publishes 340 books a year, or one out of every four travel books on the market. I met him on a swing through the San Francisco Bay Area (his ticket from New York was only $150), and he graciously signed my tattered, dog-eared original 1968 copy of his opus, which I still have.
Which country has changed the most in his 60 years of travel writing? France, where the citizenry has become noticeably more civil since losing WWII. Bali is the only place where you can still actually travel for $5/day, although you can see Honduras for $10/day. Always looking for a deal, Arthur’s next trip is to Chile, the only country in the world he has never visited.
With the advent of AI, Arthur has been met with an onslaught of new competition. Recently, Amazon (AMZN) has been flooded with hundreds of new travel books written entirely by algorithms. They have no human author who’s ever visited the country in question and are written entirely from existing information found on the Internet. But they’re cheap.
You can easily spot them from their wishy-washy, non-committal language and factual errors and omissions. For example, I recently found a travel book about Ukraine that neglected to mention that there was a war going on there and that its cities were being bombed by Russians daily.
Not for me.
Arthur’s Next Big Play is Bali
1968 on the French Riviera