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Hot Tips

  • 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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  • January 4, 2022

    1. Apple Tops $3 Trillion Market Cap,

      the shares rising above $183, well on the way to my $250 target for 2022. The stock is getting extended short term to raise cash to buy on the next selloff. I am hanging on to my own long term holding with a split-adjusted cost basis of 25 cents.

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    2. Elon Musk Made $30 Billion Yesterday

      thanks to a 13% rise in Tesla shares. High-end forecasts reach 2 million for 2022 EV worldwide production, with Berlin coming on stream this month. There is a six-month waiting list to get a Model Y in Europe. In the meantime, EVs hit a 65% market share in Norway. Keep buying the big dips in (TSLA).

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    3. French Roofing Giant GAF Moves into the Solar Shingle Business

      in a head-to-head move against Tesla. Tesla’s pure solar roofs are expensive and uncompetitive and won’t do partials. GAF’s US-made shingles can be nailed to the roof, avoiding expensive complicated wiring. I already have GAF asphalt shingles under my existing SunPower solar panels. I wondered why they asked for fresh croissants and cafe au lait every morning.

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    4. Stocks are Going Nowhere in 2022,

      says my old friend Byron Wein, co-chairman of fund giant Blackstone. Byron has been known to be wrong. He sees a 20% rally in gold, and 10-year Treasury bonds hitting 2.75%, thanks to the end of the Fed’s quantitative easing.

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    5. US Home Prices Soar 18%, in October

      according to S&P Case Shiller. Phoenix (32.3%), Tampa (28.1%), and Miami (25.7%) led. 30-year fixed-rate mortgages at 3.05% were a huge help.

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  • January 3, 2022

    1. 2022 Starts with 4,000 Flight Cancellations,

      on Sunday due to flight crew illness, including half in the US. The second mini-recession of 2021 has begun. But will it be a four-week or eight-week affair? The stock market believes the shorter version in its complete failure to pull back. It's a time frame too short for most but the most nimble to trade around. In the meantime, unvaccinated Americans are banned from France.

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    2. AT&T and Verizon Battle Pending 5G Restrictions,

      claiming their new wireless phones won’t interfere with airlines communications. The great irony is that the government sold the questionable frequencies to the phone companies in the first place. I don’t buy it for a second. If phones really were a risk to airlines, they would take your phone away before boarding.

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    3. Tesla Delivers a Record 308,600 EVs in Q4,

      blasting all expectations, taking them nearly to Elon Musk’s 2021 target of one million. They managed to beat all supply chain challenges. In a brilliant move, when other car makers cancelled chip orders in 2020, Tesla bought them all up. Tesla remains far and away the mass production leader in EVs, and I am maintaining my $10,000 target. In addition, Musk is done selling the stock for another year.

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    4. Mixing Vaccines Gives the Best Covid Response,

      according to British research. A Pfizer, AstraZeneca, Moderna cocktail seems to be the winner. Similar research in Australia confirms the same. We’ll beat this thing yet.

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    5. US Dollar Clocks Best Year in Six,

      up 7%, powered by rising interest rate fears that never came. The Turkish lira was the worst performing, down 44%, thanks to government mismanagement there.

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