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Mad Hedge Fund Trader

December 6, 2024 - Quote of the Day

Diary, Newsletter, Quote of the Day

“The individual investor in America sits at the bottom of the food chain,” said John C. Bogle, the late founder of the Vanguard Group of index funds.

https://www.madhedgefundtrader.com/wp-content/uploads/2012/04/LION.jpg 301 320 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2024-12-06 09:00:142024-12-06 16:32:38December 6, 2024 - Quote of the Day
april@madhedgefundtrader.com

December 5, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
December 5, 2024
Fiat Lux

 

Featured Trade:

(GRANT EXPECTATIONS)

(TXG), (ILMN), (TMO), (DHR)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-05 12:02:542024-12-05 13:28:30December 5, 2024
april@madhedgefundtrader.com

Grant Expectations

Biotech Letter

The first time I visited the National Institutes of Health (NIH), I got lost trying to find the bathroom and ended up in a lab where someone was studying glow-in-the-dark zebrafish.

"Wrong door," the researcher said, "but at least you didn't walk in on the fruit fly mating experiments."

Such wrong turns seem oddly fitting now as the NIH, with its $45 billion research budget, navigates its own unexpected direction under new director Dr. Jay Bhattacharya.

This reminds me of a conversation I had with a university tech transfer officer who once described the grant distribution process as "academic musical chairs but with billion-dollar stakes."

Bhattacharya seems determined to change the tune, proposing limits on how many grants individual researchers can hoard like squirrels before winter.

It's a move that has some biotech companies sweating through their lab coats, particularly 10x Genomics (TXG), whose financial statements show a quarter of their revenue sprouting from NIH grants like bacteria in a petri dish.

The last time someone tried to cap grants—back in 2017—the scientific community reacted as if someone had suggested replacing peer review with a Magic 8-Ball.

The proposal was quietly buried in the bureaucratic equivalent of a drawer labeled "Ideas We'd Rather Forget." But like that mysterious experiment growing in the back of the lab fridge, it's back.

Meanwhile, Robert F. Kennedy Jr. has been making noise about trimming the NIH's organizational chart. While Kennedy's influence carries weight, Congress still holds the purse strings, and they've historically treated the NIH like their favorite child at allowance time.

Bhattacharya's critique of the NIH's traditionally cautious approach to funding feels like watching someone suggest skydiving to their risk-averse aunt.

He's pushing for more high-risk, high-reward projects, which could be a windfall for companies playing in cutting-edge sandboxes like CRISPR and AI-driven diagnostics.

Illumina (ILMN) and 10x Genomics are practically salivating at the possibilities, while established institutions might find themselves feeling like that last teenager picked for the dodgeball team.

The global picture adds another layer of intrigue to these changes. While we're debating grant caps and organizational reshuffling, China has been quietly doubling its biotech investments over the past decade, particularly in regenerative medicine and precision oncology.

If NIH reforms stumble, U.S. companies could find themselves playing catch-up. For those who want to take part in the action, this presents an opportunity to diversify.

International markets with increasing government funding for biotech offer new avenues for growth. Global biotech ETFs could also serve as a hedge against domestic uncertainties.

Against this backdrop, diversification becomes key. Consider companies with revenue streams less tethered to NIH funding.

Thermo Fisher Scientific (TMO) and Danaher (DHR), for example, boast a global footprint that cushions them against domestic policy shifts.

After all, the global life sciences tools market, valued at $52 billion today, is projected to grow to $95 billion by 2030, with a Compound Annual Growth Rate (CAGR) of nearly 15.89%.

Emerging frontiers like gene therapy and personalized medicine also deserve attention. These fields aren’t just buzzwords—they’re the future of biotech.

ETFs focused on genomic innovation, like the ARK Genomic Revolution ETF (ARKG), provide exposure to high-growth sectors while spreading risk.

So, what’s the play here? Well, investment opportunities in this space will depend on your appetite for disruption.

10x Genomics presents an intriguing case at $15.90. Yes, up to 25% of its revenue comes from NIH funding, making it vulnerable to policy shifts.

But this same connection positions them perfectly to benefit from Bhattacharya's high-reward research initiative. The upside potential here is massive for those willing to weather some volatility.

Illumina stands out at $144.15 as a different kind of opportunity.

Their lock on the genomic sequencing market combined with aggressive R&D investments offers that rare combination: steady performance with genuine growth potential. Think of it as smart defense for your biotech portfolio.

Then there's Thermo Fisher Scientific, trading at $529.63. Their global reach and diverse revenue streams make them remarkably resilient to NIH policy changes.

The stock won't double overnight, but it offers the kind of reliability that lets you sleep soundly.

In the end, the NIH's transformation under Bhattacharya feels a bit like watching a scientist redesign an experiment mid-trial. Some see doom and gloom in these changes, while others spot golden opportunities.

But if you ask me whether the biotech glass is half empty or half full, I'd say we're missing the point entirely—in this industry, the glass has always been refillable.

 

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-05 12:00:562024-12-05 13:32:07Grant Expectations
april@madhedgefundtrader.com

December 5, 2024

Diary, Newsletter, Summary

Global Market Comments
December 5, 2024
Fiat Lux

 

Featured Trade:

(LAUNCHING “TRADING OPTIONS FOR BEGINNERS”)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-05 09:04:412024-12-05 09:48:41December 5, 2024
april@madhedgefundtrader.com

Launching “Trading Options for Beginners”

Diary, Newsletter

Not a day goes by without an email coming in asking if beginners can make use of my money making service.

I always reply; “Absolutely.”

When I first started the Diary of a Mad Hedge Fund Trader a 17 years ago, layoffs were rampant, General Motors was going bankrupt, and the financial crisis was imminent.

Many newly unemployed were facing joblessness for years, if not forever. So they started trolling the Internet for new jobs.

Then they stumbled across my website.

I quickly learned that I had to write for the unemployed GM assembly line worker to get these new subscribers the education they urgently needed.

It worked.

Now, hundreds of ordinary people earn a full time living entirely from focusing on the Mad Hedge Fund Trader Alerts.

And you know what?

It turns out that financial advisors, institutional money mangers, and the $25 billion hedge fund manger also likes to read research that a blue collar worker can understand and profit from.

To make this task easier, I have distilled 55 years of market and options trading experience into a simple three-hour video course entitled “Trading Options for Beginners.”

The course covers the basics of options trading, as well as insights that even the most grizzled veterans can appreciate.

It is filmed at my personal trading station in San Francisco, as well as on location around the world. Think of it as a basic options educational course that meets “Europe on $10,000 a day.”

Each chapter instructs you on the basic strategy behind each position. I then take you through my personal online trading account to show you exactly how to execute orders in your own accounts.

It will certainly be the most entertaining, if not the most scenic options course you have ever taken.

“Trading Options for Beginners” is only available in my online store for $48, and is one of the best bargains you will ever find. Please find the table of contents below:

Trading Options for Beginners

1) Table of Contents

2) Welcome to New Customers

3) What is An Option?

4) How to Execute a Trade Alert

5) How to Execute a Vertical Bull Call Spread

6) How to Execute a Vertical Bear Put Spread

7) The Mad Hedge Trading Philosophy

8) The Mad Hedge Trading Rules

9) Meet the Greeks

10) How to Find a Great Options Trade

11) Introduction to Risk Management

To buy “Trading Options for Beginners,” please click here.

 

https://www.madhedgefundtrader.com/wp-content/uploads/2016/06/John-at-London-Stock-Exchange-e1467069640240.jpg 362 400 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-05 09:02:362024-12-05 09:48:25Launching “Trading Options for Beginners”
Mad Hedge Fund Trader

December 5, 2024 - Quote of the Day

Bitcoin Letter

“If a cop follows you for 500 miles, you’re going to get a ticket,” said Oracle of Omaha Warren Buffet, in reference to Bank of America’s many legal problems.

https://www.madhedgefundtrader.com/wp-content/uploads/2019/07/pulled-over.png 308 360 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2024-12-05 09:00:272024-12-05 09:48:11December 5, 2024 - Quote of the Day
Douglas Davenport

SINK OR SYNC

Mad Hedge AI

(NVDA), (MSFT), (META), (PLTR), (AI)

Did you know that the average person spends about 7 hours looking for their lost keys each year? 

Well, the Pacific island nation of Tuvalu is facing a slightly bigger lost-and-found crisis: they're about to lose their entire country to rising seas. 

But instead of calling the planetary equivalent of AAA, they've come up with a solution that would make Philip K. Dick drop his jaw: they're backing up their entire nation to the cloud. 

And no, I don't mean they're storing their family photos on Google Drive.

In what might be the most ambitious "control+C, control+V" operation in human history, Tuvalu is creating a digital twin of itself in the metaverse. 

When I first heard this, I spent three fascinating hours down the digital rabbit hole to better understand the project, and let me tell you, it's a far cry from your nephew's Minecraft server. 

The artificial intelligence they're using is incredibly sophisticated. Just think about this: the computing power required to render just one square mile of Tuvalu's virtual landscape could run approximately 10,000 Nintendo 64s simultaneously – though I'm not sure why you'd want to.

But raw computing power is just the beginning. 

This AI isn't just playing SimCity here. It's analyzing everything from the way palm trees sway in the breeze (did you know a coconut palm can survive winds up to 145 mph?) to the subtle nuances of Tuvaluan dance movements. 

Though I have to wonder if it can capture the precise sensation of stepping on a sea urchin – some experiences might be better left un-digitized.

Speaking of digital preservation challenges, let's look at the players making this virtual island possible. 

First up is NVIDIA (NVDA), the company whose graphics cards probably cost you a month's rent. 

Their Omniverse platform is like Minecraft meets NASA, except instead of building blocky castles, they're preserving entire civilizations. 

Working alongside NVIDIA, Microsoft's (MSFT) Azure cloud services are providing what amounts to digital real estate in the sky. 

Remember when cloud storage meant having enough space for your vacation photos? These folks are storing an entire country. 

To put that in perspective, the amount of data required to recreate Tuvalu virtually is roughly equivalent to streaming "The Lord of the Rings" trilogy 47,000 times in 4K – extended editions included.

Not to be outdone in this digital nation-building exercise, there's Meta (META), throwing money at their Reality Labs division for months now.

But creating a digital nation isn't just about pretty graphics and virtual spaces. 

Behind the scenes, Palantir Technologies (PLRT) is handling the heavy lifting in the data department, processing environmental data so complex that one scientist described it as "trying to drink from a fire hose while solving a Rubik's cube blindfolded." 

Their AI systems are essentially keeping tabs on an entire nation's slow-motion disappearing act – talk about job pressure.

Rounding out this tech dream team is C3.ai (AI), which is essentially creating the virtual world's utility companies. 

They're making sure all these digital nations run on clean, efficient energy – though I'm still waiting for someone to explain how a virtual country can have a carbon footprint. 

With all these tech giants building digital lifeboats, the investment opportunities in this digital Noah's Ark scenario are about as diverse as a tech conference buffet. But unlike that suspicious-looking sushi that's been sitting out too long, these opportunities might actually be worth your attention. 

The sheer scale of this undertaking is mind-boggling. 

During my research, I came across a fascinating statistic: the processing power needed to run a full-scale digital nation is roughly equivalent to playing 500,000 games of chess simultaneously while also streaming every episode of "Friends" ever made. In 8K. With director's commentary. 

And while that might sound like overkill, consider this: Tuvalu might be the first nation to create a digital twin, but they're unlikely to be the last. 

Climate change isn't exactly known for its patience, and other vulnerable nations are watching this experiment with intense interest.

The urgency of this digital preservation project becomes clearer with each passing moment. Here's a sobering thought: by the time you finish reading this article, Tuvalu's physical shoreline will have eroded by about the same amount as a grain of sand. 

But in their virtual world, that shoreline will remain pristine, unchanged, and permanently preserved in digital amber. It's a bit like having a backup drive for an entire culture, except with better graphics and fewer annoying update notifications.

As Tuvalu's physical shores slowly slip beneath the waves, the message is becoming crystal clear: the future might be virtual, but the opportunities are very real. 

Whether you're betting on the hardware giants, the cloud providers, or the data wizards, you're essentially investing in humanity's first attempt at digital immortality. 

Just remember: like any good backup system, it's probably wise to diversify.

In the meantime, if you need me, I'll be practicing my virtual handshake. I'm told it's going to be an essential skill in the metaverse, though I'm still not quite sure how that works without haptic feedback. 

But that's another story for another time, preferably after I figure out how to stop my avatar from accidentally walking through walls.

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Douglas Davenport https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Douglas Davenport2024-12-04 15:48:492024-12-04 15:48:49SINK OR SYNC
april@madhedgefundtrader.com

December 4, 2024

Tech Letter

Mad Hedge Technology Letter
December 4, 2024
Fiat Lux

 

Featured Trade:

(MANAGEMENT TURNOVER IN TECH SPURRING CHANGES)
(INTC), (CRWD), (PANW)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-04 14:04:522024-12-04 14:07:58December 4, 2024
april@madhedgefundtrader.com

Management Turnover In Tech Spurring Changes

Tech Letter

CEO’s are toast as the CEO turnover tally starts to explode at the end of 2024.

There appears to be a strong trend that will grow in 2025, and that is corporate tech companies looking to the bullpen to substitute out the CEO.

They aren’t doing enough for their respective companies, and that needs to change.

This speaks volumes to the tough times in which debt has become too expensive to fund growth.

Tech companies have always played by the idea of the “winner takes all” mentality, and 2024 underscored this trend by seeing the likes of the Magnificent 7 grow in size and stature.

Through October, more than 1,800 CEOs have announced their departures this year. The outperformance of big tech stocks means that shareholders are putting massive pressure on management to juice up their own stock prices.

The number of exits is up 19% from the more than 1,500 departures during the same period last year, which was the previous year-to-date record.

Boards of directors are becoming impatient and ambitious, holding their CEOs accountable for underperformance — both in terms of profits and stock price.

The expected length of tenure as a CEO, on average, is declining as a result of these performance pressures.

The massive stock market gains of the past two years — the S&P gained roughly 20% in 2023 and is set to gain more than that by the end of 2024 — also pose challenges to US companies.

The outperformance of big tech is forcing shareholders to lean into their own management and demand answers to why they are falling behind.

The answer is complicated, and I acknowledge that many CEOs aren’t in the position to throw around capital like the CEO of Apple, Tim Cook, or CEO of Meta Zuckerberg.

These leaders can chase the next big thing and can strike out many times and not even bat an eyelid.

High turnover shows growing risk appetites and "a desire for leaders who can navigate increasing complexity in the macro business environment, including tech transformation, sustainability, geopolitical crises, and social issues."

If a company’s figurative boat is sinking while most others are enjoying a rising tide, corrective action must be taken by the CEO and or the Board.

If the CEO doesn’t have a clear plan for a turnaround, the Board finds someone who has a plan and the strength to execute that plan. It doesn’t matter if the CEO is actually at fault. Blame is assigned, and heads roll. It isn’t always fair.

Many of these tech CEOs cannot just issue dividends or execute stock buybacks to manipulate the share prices higher.

I believe these shareholder returns will be a key tool for big tech to jump over the low bar after a bevy of lower-than-expected guidance.

Next year, we could experience the haves and have nots in tech separate from each other even further.

Many of these hot chip names are right in the middle of their growth curves. 

Software stocks still look good on the dips.

Lately, there were selloffs in cyber security stocks like Palo Alto Networks (PANW) and CrowdStrike (CRWD).

Traders bought the dip after weak guidance, and this is an example of where there is an opportunity as a trader to get in at optimal entry points.

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-04 14:02:032024-12-04 14:07:23Management Turnover In Tech Spurring Changes
april@madhedgefundtrader.com

December 4, 2024 - Quote of the Day

Tech Letter

“AI and the robots will provide any goods and services that you want.” – Said Elon Musk

 

https://www.madhedgefundtrader.com/wp-content/uploads/2024/05/Elon-Musk.png 418 314 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-12-04 14:00:012024-12-04 14:07:15December 4, 2024 - Quote of the Day
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