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Hot Tips

  • April 13, 2021

    1. Tesla is Upgraded to $1,071 per Shares,

      by research firm Canaccord Genuity. The company is transitioning from low-volume high-priced cars to high-volume low-priced cars, as seen in the 47% leaps in sales during Q1. The stationary battery business is booming thanks to a new generation of technology. Tesla is developing an Apple-type brand value in the energy market, which is worth a big premium that competitors can’t match. Tesla has brought a machine gun to a knife fight. Global chip shortages are a risk. The stock jumped $25 on the news.

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    2. Consumer Price Index Comes in Muted,

      at 0.6% in April and 2.6% YOY. The market had been fearing worse, sparking another leg up in technology stocks. Much of the gain was from a jump in gasoline prices, which are now falling. Food prices are also rising.

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    3. NVIDIA is Moving into the CPU Business,

      sending the stock up 6% and crushing Intel. It’s the perfect move at the perfect time, given a worsening global chip shortage and White House focus. The new chips, named “Grace” will work ten times faster than existing ones. (NVDA)’s push into data centers will take the stock a new leg up to all-time highs. Buy (NVDA) on dips.

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    4. Microsoft Buys Nuance for $16 billion,

      a major speech recognition company based in Burlington, Massachusetts. Goodbye keyboard? The really interesting part about this deal is that they paid cash for Nuance, not stock. That means (MST) thinks their stock will go up a lot more in the near future. Keep buying (MSFT) on dips. It’s a giant that just keeps growing.

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    5. Monster US Treasury Auctions to Launch This Week,

      totaling an incredible $271 billion, to finance massive government spending. My short positions here are looking better by the day. If they do this in front of a poor CPI reading, the bond market could crash. Sell all rallies in the (TLT).  

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  • April 12, 2021

    1. One of the Best Earnings Seasons in History Starts This Week,

      with 25% growth expected at 81% beating forecasts. JP Morgan (JPM) and Bank of America (BAC) kick off on Wednesday, with the big kahuna, Apple (AAPL) reporting on April 28. Expect stocks to rally until then. It may give us the first hint of the massive stimulus on the economy to come. Q2 and Q3 will be the monster quarters.

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    2. China Fines Alibaba $2.5 Billion,

      ostensibly over antitrust offenses. Such is the price of Jack Ma’s complaints about the Beijing government.  Of course, the Chinese knew this was coming months ago. The stock has plunged 20% since February while the rest of the market was on fire. A huge stop-loss sell from Archegos didn’t help either.

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    3. Equity Funds Pick up a Half Trillion Dollars,

       in five months, more than they attracted over the last 12 years. It’s all rocket fuel for the ongoing market melt-up. With the Volatility Index (VIX) at a one-year low at $17, the best may be yet to come. Equity investors are the most bullish in years.

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    4. Jay Powell Says No Rate Rise this Year,

      and probably much longer, in a 60 Minutes interview Sunday night. Notice how our central bank governor is trying to prop up the stock market almost every day? It seems new wealth creation is a major part of his plan. Who am I to argue?

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    5. Farewell to Prince Charles.

      I met the Prince at a garden party at Buckingham Palace in 1987 as thanks for donating 10,000 pounds to a royal charity (I think it was land mine removal). Next to him in the receiving line were Queen Elizabeth, Prince Charles, and Lady Diana. I used my minute with him to ask about his experience on Royal Navy destroyers during WWII. He seemed flattered that I asked. Phillip was ever the even keel for the royal family for 75 years. He was gracious, pleasant, and relaxed. He will be missed.

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  • April 9, 2021

    1. Jerome Powell Says We’re Not There Yet,

      and while parts of the economy are doing great, there’s a very large group of people who are not. He cited a massive tent city nearby in Washington DC. It is all a daily reassertion of more QE all the time and zero interest rates as far as the eye can see. Stocks rose and the dollar fell on its coming debasement. Buy everything on dips.

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    2. Florida Sues the CDC

      in the permitting cruise lines to resume, in a big political push coming from the right. The irony is that these are anything but American companies, with ships registered in Panama, crew from Russia and the Philippines, and the captain and staff from England. Only the marketing is American. Still, they’ll reopen someday. Buy (RCL), (CCL), and (NCLH) on dips.

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    3. Disneyland in LA to Open April 30,

      after a one-year hiatus.  It’s time to dust off those mouse ears. The last time the Mouse House was closed this long, antiwar protesters took of Tom Sawyer’s Island and raised the Vietcong flag (I was there). Some 10,000 cast members have been recalled. Only 15% capacity will be allowed to California residents only. The new Avengers Campus will open on June 4. The company is about to make back the 25% of revenues it lost last year, but with a much lower cost base. Buy (DIS) on dips.

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    4. Amazon Unionization Effort Fails,

      in Alabama with a 2:1 margin against. It helps that Jeff Bezos voluntarily increase a company-wide minimum wage to $16 an hour, double the federal rate. The unions will keep coming back every year but will keep failing. Buy (AMZN) on dips.

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    5. Was that Inflation?

      The Producer Price Index jumped by 1.0% in March compared to an expected 0.40%. It’s the second hot month in a row. Basically, the price of everything went up. The YOY rate is an astonishing 4.04% a near-decade high. If it looks like a duck and quacks like a duck….Stocks didn’t like it….for about 15 minutes.

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  • April 8, 2021

    1. Fed Minutes Say Ultra Dove Policy to Continue,

      so say the minutes from the March meeting. Rates won’t be raised on forecasts, predictions, or crystal balls, but hard historic data. That’s another way of saying no rate hikes until you see the whites of inflation’s eyes. $120 billion of monthly bond buys will continue indefinitely. Bonds dropped $1.25 on the news. Sell all (TLT) rallies in serious size. It’s still THE trade of 2021.

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    2. Weekly Jobless Claims Rise,

      by 16,000 to 744,000, far above estimates. New York and California led the gains. Call it weekly noise. The big trend is still down.

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    3. Bill Nygren Sees a Value Play in Netflix,

      or so says one of this generation’s top value investors. The Oakmark Select fund manager thinks banks are still cheap and Bill owns all the big ones. The service side of technology will be a big winner, including Amazon (AMZN), Netflix (NFLX), and Facebook (FB). Netflix (NFLX) is the new cable provider of 25 years ago and the potential market is much bigger, with subscribers worth $1,000 each. I couldn’t agree more. Buy all Bill’s names on dips.

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    4. Biggest Copper Producer is Boosting Output,

      to address extreme shortages in the global market. Chile’s Codelco says a Covid-19 surge is crimping labor supply and closed the country’s borders and limiting deliveries and boosting prices. Buy (FCX) on dips for a three-year double from here.

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    5. The Chip Shortage Hits Apple,

      delaying deliveries of laptops and iPads. This will get a lot worse before it gets better as it takes two years to build a chip fab on a green field. Buy (AMAT) and (LRCX) on dips. “Just in time” is dead.

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  • April 7, 2021

    1. The Economic Boom Will Run Through 2023,

      says JP Morgan chairman Jamie Diamond, one of the best managers in the country. In his letter to shareholders, he says 10% of his workforce will work permanently from home. Zoom (ZM) is here to stay. Fintech is a serious threat to legacy banks, which is why we love Square (SQ) and PayPal (PYPL). Keep buying (JPM) on dips. Interest rates will rise for years, but not fast enough to kill the bull market.

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    2. IMF Predicts 6.0% Global Growth for 2021,

      the highest in 40 years. China will grow at 8.4%. It’s a big improvement since their January prediction. The $1.9 trillion US Rescue is stimulating not just America’s economy, but that of the entire world. Expect a downgrade to the 3% handle in 2022, which is still the best in a decade.

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    3. Janet Yellen Proposes Global Minimum Multinational Tax,

      which could raise $2 trillion. It may be why bonds have rallied for the past two weeks. Nice idea, but it will never happen. Sell short (TLT) immediately.

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    4. Facebook is Hitting Daily New Highs,

      because consumers newly released from a one-year lockdown suddenly start doing a lot of things which they then talk to their friends about. That translates straight into higher ad revenues for (FB). Keep buying (FB) on dips.

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    5. International Air Traffic is Still Down 89% YOY,

      according to the International Air Transport Association. It indicates how prolific the rebound could be. In the US, flights are now getting cancelled because of pilot shortages. International won’t resume until the end of the year. Keep buying (LUV), (AKL), and (DAL) on dips.

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