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Hot Tips

  • January 13, 2022

    1. Wholesale Prices Soar 9.7% YOY,

      the most in 11 years. It augers for more interest rate hikes sooner, with overnight rates targeting 1.25% by yearend.

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    2. Weekly Jobless Claims Hit Two-Month High,

      at 230,000. No doubt it is due to the omicron surge. A million cases a day is certainly going to make a dent in the workforce. Some people are afraid to get sick, while others know they can get away with it.

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    3. S&P 500 Profits Jump 22.4% in Q4,

      possibly taking the full-year figure up an incredible 49%. It makes stocks look like a bargain, which were up only 27% in 2021. Expect cooler numbers and a quieter stock market in 2022.

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    4. Virgin Galactic Gets Crushed,

      on plans to borrow $500 million. There are only so many billionaires willing to spend $250,000 for a ten-minute ride. Avoid (SPCE).

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    5. The Big Apple is Back,

      with Manhattan rents hitting all-time highs, up 16% YOY. Doorman building keeping the public at bay are particularly popular. I knew it wouldn’t take long.

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  • January 12, 2022

    1. Inflation Hits 7.0%,

      with the Consumer Price Index hitting a 39-year high. Bonds ended a $3.00 rally and resumed a downtrend. Rents and used cars led the gains. I remember 1982 well. My first home mortgage had an 18% interest rate. Expect worse to come. 

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    2. Auto Stocks Will Be Top Performers,

      in 2022, says value legend Mario Gabelli. Dealers are extremely short of inventory and demanding more production. Used car prices are soaring. Average industry sales prices have soared from $40,000 to $45,000 in a year. Buy (F) on a dip. (TSLA) has topped out for now with the rest of the tech stocks.

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    3. Morgan Stanley Hands Out 20% Bonuses,

      to top performers. How times have changed. In my day, it was 1,000% as there were no outside shareholders. I can still wear the alligator skin belt I bought with that first bonus. Maybe you should buy (MS) on the next dip.

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    4. This Year’s COLA Adjustment is Just 5.9%,

      compared to an actual 7.0% inflation rate. It’s a shadow of what seniors are paying in their true cost of living.

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    5. Denmark Moves to Second Boosters to Fight Covid,

      and four shots in total. They join a growing legion of countries going for the extra protection, including Israel and Australia. If it’s good enough for the Danish, it’s good enough for me.

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  • January 11, 2022

    1. Quantitative Tightening to Start in July,

      says Goldman Sachs. That’s when the Fed starts selling its vast holdings of US Treasury bonds, about $8.5 trillion worth. They will continue QT until the pain becomes too great. Four rate hikes in 2022 are in the bag. It’s not a stock market-friendly scenario.

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    2. United Airlines has 3,000 Down with Covid,

      about 3% of its workforce. The US is now seeing 1% of its population infected per day! Hopefully, it’s a quick in/quick out wave which will be gone by summer. If you’re fat, you’re toast. Some 75% of those dying from omicron were obese. Fortunately, Covid is no longer a factor in the stock market.

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    3. This is Not the Year to Own Money-Losing Tech,

      says my friend Goldman’s David Kostin. For investors, the glass has gone from half full to half empty. The big ones will be OK but are still due for a pullback. NASDAQ price earnings are still at a 20-year high at 38X. Rising interest rates were the stick that broke the camel’s back. Don’t buy the dip too soon.

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    4. Alphabet is the Top ESG Stock,

      according to the JUST 100, a ranking system backed by hedge fund legend and former client Paul Tudor Jones. I like (GOOGL) because it has an online advertising monopoly, with a 92% market share, and an unassailably wide moat. Last year, Microsoft (MSFT) held the number one position. Buy (GOOGL) when tech comes back into favor.

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    5. What is the Cheapest Sector in the Market?

      Biotech and Healthcare, which are at valuation lows not seen since the 2009 and 2000 lows. It also has the best decade-long growth outlook after technology. The problem is that no one wants to buy them on the back nine of a global pandemic. They will rally hard….someday.

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  • January 10, 2022

    1. The Economy is the Strongest in Decades,

      according to JP Morgan CEO Jamie Diamond. I agree. That’s because banks prosper most early in an interest-raising cycle. The Fed could raise rates four times this year. Keep buying financials on dips.

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    2. Hedge Funds Lost Money in 2021,

      with flagship Tiger Global fund, a Julian Robertson spinoff, down 7%. Shorts that don’t move (bonds) and longs that collapse (small tech) are definitely not a formula for making money. 2022 should be MUCH better.

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    3. Climate Change Cost $145 Billion in 2021,

      an all-time record, and killed 168. This climate thing is heating up with 2021 the fourth warmest year on record. My California fire insurance rise by 50% last year.

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    4. Bitcoin Breaks $40,000,

      as the flight from all interest-bearing securities continues. Don’t buy the dip yet.

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    5. Take Two Interactive Buys Zynga for $12.5 billion,

      a 64% premium in a big gamble that mobile gaming will pay off. In other words, “Grand Theft Auto”, one of the oldest games in the market, buys “Farmville.” Not exactly a day when I would expect this transaction.

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  • January 7, 2022

    1. Nonfarm Payroll Report Disappoints at 199,000.

      But the Headline Unemployment Rate plunged from 4.2% to 3.9%, approaching a new century low. The U-6 “discouraged worker” rate dropped to 7.3%. Leisure & Hospitality led at 53,000, followed by Professional & Business Service at 43,000 and Manufacturing at 26,000. The government lost 12,000 jobs. Some 650,000 people gain jobs, with self-employment surging. Once again, the data are wildly contradictory as a post-pandemic America remakes itself. Bonds and tech were crushed, financials soared.

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    2. Cathie Wood Gets Crushed Again,

      taking her Ark Innovation Fund (ARKK) down 48% from the peak. These days, the market is not prone to paying huge multiples for non-earning tech companies with bright futures. Its saving grace is a major holding in Tesla (TSLA) up 120% in six months.

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    3. NASDAQ Stocks Down 50% Hits Record,

      from one-year highs. It’s a Dotcom bust echo. Traders are selling first and doing the research later. That means half of all tech stocks are in bear markets. Soaring interest rates aren’t helping.

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    4. Apartment Occupancy Hits All-Time High,

      as growing numbers are priced out of homeownership. As a result, rental rates are now rising faster than home prices. Occupancy is now at 97.5%.

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    5. Lumber Prices are Soaring Again.

      When Trump imposed punitive import duties against Canadian lumber imports, the Canadians simply stopped producing. That happened in the face of an ongoing construction boom. Good luck trying to find 2 ½ inch maple.

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