Global Market Comments
December 26, 2024
Fiat Lux
SPECIAL ISSUE ABOUT THE FAR FUTURE
Featured Trade:
(PEAKING INTO THE FUTURE WITH RAY KURZWEIL),
(GOOG), (INTC), (AAPL), (TXN)
Mad Hedge Biotech and Healthcare Letter
December 24, 2024
Fiat Lux
Featured Trade:
(THE LAB RESULTS ARE IN)
(GILD), (TSLA), (WVE), (EDIT), (CRSP), (LLY), (NVO), (WMT), (CVS), (CCCC), (RHHBY)
I found myself gridlocked in Bay Area traffic a few days ago, inching past Gilead's (GILD) sprawling Foster City headquarters, when my phone lit up with a call from an old friend at Goldman.
“Alright, tell me—what’s the real story with biotech this year?” she asked, her tone hovering somewhere between curiosity and exasperation. “Half my portfolio feels like a masterstroke, the other half... well, let’s just say it’s testing my patience.”
As I watched a Tesla (TSLA) weave through traffic like it was auditioning for a Fast & Furious reboot, I smiled.
Biotech has always been a bit of a high-stakes chess game—brilliance in one corner, chaos in another, and always a few surprises lurking behind the next move.
“Let me break it down for you,” I said, steering the conversation as carefully as I did my car through the bumper-to-bumper maze.
First, the winners are crushing it, and I mean crushing it. Gilead (GILD) finally cracked the code on HIV treatment, developing what's essentially a vaccine that doesn't require popping pills like they're Tic Tacs.
My contacts in clinical development tell me the Phase 3 data in cisgender women is nothing short of spectacular. With a $6 billion annual market potential by 2028, this isn't just another incremental advance - it's the kind of breakthrough that makes everyone in biotech salivate.
Then there's Wave Life Sciences (WVE) and their RNA editing technology. Remember when we thought CRISPR was the only game in town? Well, Wave just showed us there's more than one way to edit a gene.
Their liver-targeting therapy is the first successful RNA editing in humans - think of it as spell-check for your DNA, but reversible. The market's currently at $1.1 billion, but with 35% CAGR through 2030, this train is just leaving the station.
Speaking of trains leaving stations, molecular glue developers like C4 Therapeutics (CCCC) are watching Big Pharma back up the Brink's truck.
We're talking $8 billion in licensing deals this year alone. After all, when Roche (RHHBY) drops $300 million upfront - not milestone payments, mind you, but cold hard cash - you know they've seen something special in the data room.
But here's where it gets interesting, and I had to pull over at this point in the conversation because my friend wasn't going to like what came next.
CRISPR stocks? Down 20%. Editas (EDIT) and CRISPR Therapeutics (CRSP) are learning that revolutionary science doesn't always translate to revolutionary returns.
My friend Janet at the Fed might be talking about higher rates, but these companies are bleeding cash faster than a Silicon Valley startup's WeWork budget.
The obesity market? Unless your name is Eli Lilly (LLY) or Novo Nordisk (NVO), you're probably not having a great time.
Only three startups cleared $100 million in funding this year. In biotech terms, that's like trying to build a house with pocket change.
The global market's sitting at $4.1 billion, but it's more crowded than a San Francisco coffee shop during a tech conference.
And don't get me started on Walmart (WMT) and CVS (CVS) trying to play doctor. They thought they could disrupt traditional healthcare with their “get your physical next to the garden tools” model.
The result? A combined loss of $250 million and a wave of clinic closures.
The lesson here is clear: just because you can sell lightbulbs and Band-Aids in the same aisle doesn’t mean you should try to diagnose strep throat next to the automotive department.
A kid in a modded Subaru WRX cut me off as I wrapped up the call, but I left my friend with this: In biotech, timing is everything.
Gilead and Wave are showing us that patience pays off when the science is solid. Meanwhile, CRISPR stocks remind us that even the most promising technology needs good timing and deep pockets.
So, watch those clinical trial results like a hawk, and keep an eye on where the venture money's flowing.
But most importantly, remember what my old mentor used to say: "In biotech, you're not just betting on the science - you're betting on the scientist, the CFO, and sometimes, just sometimes, on whether people are ready to get their flu shot next to the garden center."
Now, where's that highway patrol when you need them?
Global Market Comments
December 24, 2024
Fiat Lux
Featured Trade:
(THE NEXT COMMODITY SUPER CYCLE HAS ALREADY STARTED),
(COPX), (GLD), (FCX), (BHP), (RIO), (SIL),
(PPLT), (PALL), (GOLD), (ECH), (EWZ), (IDX)
Toronto, Canada - RBC, a leading global financial institution, has released its highly anticipated Global Insight 2025 Outlook report, providing a comprehensive analysis of the economic, financial, and geopolitical trends that are expected to shape the world in the coming years. The report highlights the profound impact of artificial intelligence (AI) across various sectors, emphasizing the need for investors and businesses to adapt to this rapidly evolving landscape.
AI: The Defining Technology of Our Time
RBC's report identifies AI as the most transformative technology of the 21st century, with the potential to revolutionize industries, redefine business models, and reshape the global economy. The report emphasizes that AI is no longer a futuristic concept, but a present-day reality that is already impacting our lives in numerous ways.
"AI is not just a technological advancement; it's a fundamental shift that is reshaping the world as we know it," says Helen Zhang, Head of Global Insight at RBC. "Its impact will be felt across all sectors, from healthcare and finance to manufacturing and transportation. Businesses and investors who fail to grasp the implications of AI risk being left behind."
AI's Impact on the Global Economy
RBC's report predicts that AI will be a key driver of economic growth in the coming years, boosting productivity, creating new jobs, and unlocking new opportunities. The report estimates that AI could contribute up to $15.7 trillion to the global economy by 2030.
However, the report also acknowledges the potential challenges associated with AI, including job displacement, ethical concerns, and the risk of widening inequality. RBC stresses the importance of responsible AI development and deployment, ensuring that its benefits are shared broadly and its risks are mitigated.
AI and the Future of Work
The report delves into the impact of AI on the workforce, acknowledging that while AI will create new jobs, it will also displace existing ones. RBC emphasizes the need for workers to adapt to this changing landscape by acquiring new skills and embracing lifelong learning.
"The future of work will be shaped by AI, and those who are prepared to adapt will thrive," says Zhang. "We need to invest in education and training programs that equip workers with the skills they need to succeed in an AI-powered world."
AI in Key Sectors
RBC's report provides a detailed analysis of AI's impact on various sectors, including:
- Healthcare: AI is transforming healthcare by enabling earlier disease detection, personalized treatments, and more efficient drug discovery.
- Finance: AI is being used to automate tasks, detect fraud, and provide personalized financial advice.
- Manufacturing: AI is optimizing production processes, improving quality control, and enabling predictive maintenance.
- Transportation: AI is powering autonomous vehicles, optimizing logistics, and improving traffic flow.
Investing in the Age of AI
RBC's report provides guidance for investors on how to navigate the AI landscape, highlighting the opportunities and risks associated with this transformative technology. The report identifies key investment themes, including:
- AI infrastructure: Companies that provide the hardware and software necessary for AI development and deployment.
- AI applications: Companies that develop and apply AI solutions across various industries.
- AI enablers: Companies that provide services and technologies that support AI development and adoption.
RBC's Commitment to AI
RBC is committed to harnessing the power of AI to enhance its products and services, improve its operations, and create value for its clients. The bank has made significant investments in AI research and development, and is actively exploring new ways to leverage AI across its business.
"We believe that AI has the potential to transform the financial industry, and we are committed to being at the forefront of this transformation," says Zhang. "We are investing in AI to provide our clients with more personalized and innovative solutions, and to make our operations more efficient and secure."
Conclusion
RBC's Global Insight 2025 Outlook provides a comprehensive and insightful analysis of the trends that will shape the world in the coming years. The report highlights the transformative potential of AI, while also acknowledging the challenges and risks associated with this technology. RBC's commitment to responsible AI development and deployment, coupled with its investments in AI research and development, position the bank as a leader in the AI revolution.
Mad Hedge Technology Letter
December 23, 2024
Fiat Lux
Featured Trade:
(THE FUTURE IS HERE)
(NO CODE)
The future is here.
No code or low code will bring a raft of new innovative tech companies to market, and we are in the early innings of this transformative development.
What is no code?
No-code is an approach to designing and using applications that requires zero coding or knowledge of programming languages.
This type of software hits us at a perfect time when the home office is beginning to become ubiquitous.
The self-service movement that empowers business users will support the creation, manipulation, and employment of data-driven applications.
If we turn back the pages of history, companies need an army of software programmers to develop even the measliest application.
That was then, and this is now.
Fast forward to today, and automated technology doesn’t only include cutting-edge industries like automotive cars, but also software on laptops that can be rejigged by individual entrepreneurs.
That’s right, one person with no coding experience will be able to design, develop, and offer a real-life application with meaningful business value without the help of expert programmers.
The research data backs up my thesis with research firms projecting a 23% increase for the global market for this type of technology.
During the pandemic, low-code/no-code tools saw steady growth due to their effectiveness in addressing some of tech’s most complicated challenges.
The essential need to digitize workflows to enhance customer and employee experiences will be a boost to the efficiency of commercial and operational teams.
No-code platforms have evolved from just facilitating mundane tasks to making it possible for a broader range of business employees to truly own their automation and build new software applications with no coding while increasing organizational capacity.
A few risks that larger companies might consider is that even for remote developers building new applications, governance is paramount.
IT staff will need to install guardrails in place and have those built into low-code/no-code platforms to maintain consistent levels of security across the organization.
Cybersecurity solutions need to be integrated into this workflow by training every employee at the organization on security behavior and using compartmentalization and limited access to prevent opportunities for mistakes.
Hard landings are hard to recover from, and some can be crippling to the business model.
For no-code companies, harmonizing workflows is a key requirement for success.
In a low-code/no-code organization, departments should be able to work without silos and communicate freely across functions.
Elevated performance enabled by low-code/no-code tools will mean that the number of useful apps hurling towards the marketplace will be more and merrier than ever before.
Higher performance will no doubt usher in a new renaissance of efficiency and even better performance.
This also puts a 3 or even 4-day workweek squarely in play.
Many of the best tech minds in the world have supported the concept of working smarter instead of working harder.
A low code/no-code standard will allow for these achievements to take place.
The cratering of costs to start and run a tech firm is affected, too.
Deploying startup capital to pay for other expenses will make it easier for successful incubation.
This will ultimately mean that this new type of tech company will need to embrace the fusion of IT and business staff, empowering them with composable applications to speed up the time to market for new solutions.
Low-code/no-code APIs and other tools are enabling companies to integrate new applications into their existing tech stack in a more seamless manner with a lift-and-shift approach vs a rip-and-replace.
At the entrepreneur level, individuals will be able to harness the technology to build $100 million companies with a snap of the fingers when it wasn’t possible to do it before.
This is finally a chance for the little guy to recapture their moxie in the vast and sometimes overwhelming business world.
“If you're not stubborn, you'll give up on experiments too soon.” – Said Founder of Amazon Jeff Bezos
(SENSIBLE INVESTING TIPS BY BUFFETT TO START THE NEW YEAR)
December 23, 2024
Hello everyone,
While I am taking a break, you will receive past Posts, which you may or may not have read.
Enjoy the festive season.
*************************************************************************************
I want to sink into your psyche today some investing advice by Buffett. You would do well to write these on a piece of paper and stick that on the wall above your computer or your desk and read it every day.
We might know the hard and fast rules of investing, but life has a habit of tipping the scales sometimes, where we temporarily lose our balance and are not thinking clearly, and these are the times we sometimes slip up in our ability to stick to the plan and the rules.
So, let’s jump into those tips.
1. Design a broad portfolio. The goal of the non-professional investor is not to pick winners – but rather own a cross-section of businesses that, in the aggregate, are bound to do well. This is why Buffett always advises investors to invest in a low-cost S&P 500 index fund, which will achieve this goal. He suggests checking out Vanguard. Interestingly, Buffett revealed 10 years ago that he would direct 10% of the cash to go into short-term government bonds and 90% to a low-cost S&P500 index fund.
2. Steer clear of the financial salesperson. Professional money managers and advisors (on Wall Street or indeed anywhere) are incentivized to recommend various securities. The fact is that they rarely beat the market. Buffett’s words here: “You just have to recognize you’re dealing with an industry where it pays to be a great salesperson…There’s a lot more money in selling than in managing…if you look to the essence of investment management.” (I learned this lesson the hard way and am now very wary). And please note that more than 95% of financial newsletters are rubbish, written by people with no investing experience.
3. You don’t need to be a Math genius. Buffett says you don’t need to excel at technical analysis or mathematical calculations to find great stocks. Buffett comments that “if you need to use a computer or a calculator to make the calculation, you shouldn’t buy it” (the stock).
4. When you buy a stock, you own part of the business. Buffett only buys something when he grasps the intrinsic value of an asset or the discounted value today of the cash that a business generates in the future.
5. Market action is largely driven by emotions. Fear and greed should guide investors on when to buy and sell. Buy when there is fear and sell when there is greed. Simple as that. (For long-term investors, just average in and stick the investment in the bottom compartment of your cupboard). Buffett reminds us of the fact that math and a high IQ don’t necessarily help. So, leave the ego boxed up if you topped your class in Math – it may get in the way here... Buffett’s words: “Higher mathematics may be dangerous, and it will lead you down pathways that are better left untrod.” He goes on to remind us that “we do not sit with spreadsheets…we just see something that obviously is better than anything else around, that we understand. And then we act.”
6. After a loss, move on. Look forward. No extra detail is needed here.
7. Steer clear of declining businesses. When Buffett started on his investing journey, he used to buy cheap, failing businesses that he called “cigar butts.” But that strategy is not beneficial in the long run. Real money is going to be made by being in growing businesses, and that’s where the focus should be. Buffett is now known for seeking out wonderful businesses that he could buy at fair prices. He transformed Berkshire Hathaway from a small, failing textile mill into a near-$800 billion multifaceted juggernaut.
Cheers,
Jacquie
Global Market Comments
December 23, 2024
Fiat Lux
Featured Trade:
(A BUY WRITE PRIMER)
(AAPL)
