Mad Hedge Technology Letter
March 7, 2025
Fiat Lux
Featured Trade:
(APPLE LOOKING TO FIND ITS MOJO)
(AAPL), (SAMSUNG), (CHINA)
Not only is Apple losing its edge, but they are failing miserably against the Chinese.
China, with its state-supported behemoths, is the bully on the playground, and Apple can’t too diddlysquat.
Apple has been selling the same product for the past 13 years, and the last iterations have been underwhelming, to say the least.
People don’t want to upgrade, forcing to elongate of the refresh cycle.
It’s now so bad that Apple even ceded 5% market share in the final quarter last year to Chinese competition.
Apple is also very late in integrating AI features, signaling that Apple’s software game is behind the times and mediocre at best.
Apple risks falling behind quickly, and the Chinese have really nailed the consumer tech and muscled into this industry.
They are poised to dominate EVs, smartphones, and other value-added tech in the upcoming years.
They plan to seize the moment and squeeze American companies out of the way for good.
Samsung also has been going through a disastrous down cycle after their Android flagship phone peaked a few years ago.
This new trajectory is a slippery slope, and if Apple goes on the cost-cutting path, there will be little talent left to innovate out of this problem.
The iPhone slipped a point to 18% worldwide market share in 2024.
Apple marked a 2% sales decline for the full year at a time that the wider market grew 4% globally.
China’s smartphone makers are all developing their own in-house AI tools and agents, including services that can perform tasks on a user’s behalf.
Samsung also gave up share to faster-growing Android device makers from China, led by Xiaomi and Vivo. Apple marked a 2% sales decline for the full year.
The situation paints a picture of the non-Chinese smartphone markets in a world of hurt.
I believe that Apple and Samsung have nobody to blame but themselves, as those years of forced technological know-how transfer are coming back to bite them where it hurts.
My friends’ kids have these new Chinese smartphones, and I can tell you that I was surprised about how good they perform.
They are run on Android, which is very different from IoS, but they were premium.
German car companies are also feeling this bitter pill as Chinese companies have taken their own technology and implemented it in a more affordable way.
In aggregate, this latest news is a bad omen for Apple’s earnings season.
They are barely jumping over a lower bar, and that will keep happening until something major is revamped in the product lineup.
I believe any steep sell-off would be a nice opportunity to execute a short-term trade to the upside, but those years of buying and holding Apple until eternity is gone.
Readers must really nitpick what this company is doing because management presides over a dull model, and their China business is falling apart as we speak, all while they helped the local Chinese competition over many years take market share with forced technological transfers.
Surprisingly, the stock has done well during the tariff rhetoric and has trudged along sideways while other stocks have really felt the full brunt of the trade escalation.
If we get a smooth patch, I would advocate for a tactical trade to the upside in AAPL.
“Constantly seek criticism. A well thought out critique of whatever you're doing is as valuable as gold.” – Said Elon Musk
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
(THE BEAR IS GROWLING IN THE FOREST)
March 7, 2025
Hello everyone
Peter Berezin of BCA Research was a Wall Street bear coming into 2025. He believes the U.S. is probably already in a recession.
Coming into 2025, most Wall Street strategists were predicting further gains, however, Berezin was holding a firm bear view of the market.
His year-end S&P500 (SPX) target is 4,450. His worst case is 4,200. That is compared to the 6,500 analysts’ average, and Oppenheimer’s 7,100 top.
Berezin said his research house was among the few that boosted recession probabilities following the U.S. election. He argued that “we did so because we thought that Trump would be disruptive in some positive ways, but also very disruptive in some negative ways, most of which is trade.”
Berezin also negated the argument that tariffs were just a negotiating tool. Instead, he was convinced Trump wanted tariffs because he is “a protectionist at heart” and needs the money because of the sizable budget deficit.
How should investors approach the market right now?
Berezin’s advice is to largely step away from stocks. But if you need to be invested, move your portfolio toward the more defensive sectors, such as “consumer staples, healthcare, utilities to some extent.” He goes on to say that investors should avoid tech, consumer discretionary, industrials, materials, financials, high-yield credit, and crypto.
He comments that you need to own bonds, own more cash, and own more gold. In addition, he mentions buying puts for the protection of your overall portfolio.
What could change Berezin’s downbeat view?
Trump does a complete pivot away from his tariff agenda. But in declaring this, Berezin still believes that stocks would have to go down a lot for Trump to change his position on tariffs.
I have been bearish on the market for quite a while now and indicated bearish targets on S&P 500 charts during my February Zoom meeting. I was also bearish in January. I have recommended selling down a lot of your positions in the stock market or selling some stocks completely. In a scenario such as this environment, it is better to be cashed up, so you can go shopping when there is “blood in the streets.” In other words, have cash at the ready after stocks have been hammered and are in great territory for LEAPS. Warren Buffett has built an enormous store of cash over the last few months, so he is ready to scoop up bargains when the time is right. Heed Buffett’s actions and Berezin’s advice.
For insurance to protect your portfolio, you can buy (SH) Pro Shares Short S&P500 exchange-traded fund (ETF). If the market rallies again, an option trade on SH is another insurance vehicle.
SOUTH-EAST QUEENSLAND WILL TAKE THE FULL BRUNT OF CYCLONE ALFRED
Cyclone Alfred is around 225 kilometres off the Gold Coast and is expected to cross the coast on Friday or early Saturday morning. It is a rare event for this part of Queensland to have a cyclone. It is about 50 years since the last one travelled across our coastline in this southeast Queensland area. Around 655 state schools (1000 schools in all) have been closed in the southeast corner, together with the Brisbane & Gold Coast airports, many businesses as well as some supermarkets. Central Brisbane is almost like a ghost city. Despite the government advising everyone to stay indoors, some surfboard riders have been making the most of the huge swells. Board riders have been towed out past the breaks by jet ski vehicles.
There have been some wave heights of 12 metres and over. And, of course, plenty of broken surfboards.
Supermarket shelves have been stripped bare in preparation for this weather event.
400,000 sandbags have been collected by residents in an effort to protect their homes and businesses.
I have now lost power, so I will submit this while I still have battery power on my laptop.
Cheers
Jacquie
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
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
Global Market Comments
March 7, 2025
Fiat Lux
Featured Trade:
(FOUNDING THE DIARY OF A MAD HEDGE FUND TRADER)
The Diary of a Mad Hedge Fund Trader is now celebrating its 15th year of publication.
During this time, I have religiously pumped out 3,000 words a day, or 18 newsletters a week, of original, independent-minded, hard-hitting, and often wickedly funny research.
I spent my life as a war correspondent, Marine Corps combat pilot, Wall Street trader, and hedge fund manager, and if you can’t laugh after that, something is wrong with you.
I’ve been covering stocks, bonds, commodities, foreign exchange, energy, precious metals, real estate, and even agricultural products.
You’ve been kept up on my travels around the world and listened in on my conversations with those who drive the financial markets.
I also occasionally opine on politics, but only when it has a direct market impact, such as with the recent administration's economic and trade policies. There is no profit in taking a side.
The site now contains over 20 million words, or 30 times the length of Tolstoy’s epic War and Peace.
Unfortunately, it feels like I have written on every possible topic at least 100 times over.
So, I am reaching out to you, the reader, to suggest new areas of research that I may have missed until now, which you believe justify further investigation.
Please send any and all ideas directly to me at support@madhedgefundtrader.com, and put “RESEARCH IDEA” in the subject line.
The great thing about running an online business is that I can evolve it to meet your needs on a daily basis.
Many of the new products and services that I have introduced since 2008 have come at your suggestion. That has enabled me to improve the product’s quality, to your benefit. Notice how rapidly my trade alert performance is going up, now annualizing at +47% a year.
This originally started out as a daily email to my hedge fund investors, giving them an update on fast market-moving events. That was at a time when the financial markets were in free fall, and the end of the world seemed near.
Here’s a good trading rule of thumb: Usually, the world doesn’t end. History doesn’t repeat itself, but it certainly rhymes.
The daily emails gave me the scalability that I so desperately needed. Today’s global mega enterprise grew from there.
Today, the Diary of a Mad Hedge Fund Trader and its Global Trading Dispatch is read in over 140 countries by 30,000 followers. The Mad Hedge Technology Letter, the Mad Hedge Biotech & Health Care Letter, Mad Hedge AI, and Jacquie’s Post also have their own substantial followings. And the daily Mad Hedge Hot Tips is one of the most widely read publications in the financial industry.
I’m weak in distribution in North Korea and Mali, in both cases due to the lack of electricity. But that may change.
One can only hope.
If you want to read my first pitiful attempt at a post, please click here for my February 1, 2008 post.
It urged readers to buy gold at $950 (it soared to $2,200) and buy the Euro at $1.50 (it went to $1.60).
Now you know why this letter has become so outrageously popular.
Unfortunately, I also recommended that they sell bonds short. I wasn’t wrong on that one, just early- about eight years too early.
I always get asked how long will I keep doing this?
I am already collecting Social Security, so that deadline came and went. My old friend and early Mad Hedge subscriber, Warren Buffet, is still working at 94, so that seems like a realistic goal. And my old friend, Henry Kissinger, is still hard at it at 100 years old.
Hiking ten miles a day with a 50-pound pack, my doctor tells me I should live forever. He says he spends all day trying to convince his other patients to be like me, and the only one who actually does it is me.
The harsh truth is that I don’t know how to NOT work. Never tried it, and I never will.
The fact is that thousands of subscribers love me for what I do, pay for me to travel around the world first class to the most exotic destinations, eat in the best restaurants, fly the rarest historical aircraft, and then say thank you. I even get presents (keep those pounds of fudge and bottles of bourbon coming!).
Given the absolute blast I have doing this job, I would be Mad to actually retire.
Take a look at the testimonials I get on an almost daily basis, and you’ll see why this business is so hard to walk away from (click here).
In the end, you are going to have to pry my cold, dead fingers off of this keyboard to get me to give up.
Fiat Lux (let there be light).
“Believe nothing that you hear, and half of what you see,” said the legendary investor, Ron Baron.
