Jacque's Post Archives

September 1, 2023

Jacque's Post

(SUMMARY OF JOHN’S AUGUST 30, 2023, WEBINAR – “HIGHER FOR LONGER.”)

September 1, 2023

Hello everyone,

Webinar Title: Higher for Longer

John believes there is an upside move coming as there is big money on the sidelines waiting to buy the next dip.

September 12-14th Summit – highly educational, prizes, please join us.

San Diego September 6 Luncheon – Join John and other concierge members at a waterfront restaurant.

Trade Alert Performance: -4.70% for August. Stopped out of long position in TLT before sell-off down to 92. Now have a cushion of cash.

92.45% trailing one-year return.

48.15% average annualized return.

No Positions – 100% cash.

Method to My Madness

John is looking for TLT to get down to around 92 where he will issue LEAPS.

He has ignored all the hype about sells on Tesla.

Funds have shown record underperformance this year.

The next big dip is the one you buy, with $5.6 trillion in cash sitting on the sidelines.

John argues that stocks could rally for 6-9 months after that. Looking for a hot economy for 2024.

Tech is completing a sideways “time” correction and will lead the next leg of the bull market, now 10 months old.

Bonds may have bottomed – buy LEAPS on the next dip.

Precious metals and commodities should be at the top of any “buy” list to cash in on an economic recovery.

Housing is starting a comeback, 20% of the U.S. economy.

Oil is getting ready for an upside breakout to $100/barrel.

Patience is a virtue – let the market come to you.

Global Economy

Powell says it’s “higher for longer.”

August Non-Farm Payroll is expected to come in at a weak 175,000.

September 10 – Inflation Read – if we get a rise in inflation, we could get a sell-off. May be a good entry point.

Industrial production rises – 1.0% in July, the second best read since January.

Chinese profits continue to slump – down 6.7% YOY in July. Youth unemployment exceeds 20%.

Strikes threatening Detroit, as the United Auto Workers call for a vote, demanding a 40% wage increase over four years.

Market Timing Index – chopping around 50. Do nothing territory.

Possibility of black swan in September/October.

Stocks

Weekly Jobless Claims down 10K - strong economy.

On John’s travels, he noted that a large proportion of London’s cabs have gone electric.

John is in cash – no trades. Waiting for the next big dip.

Waiting for the Fed to make its move. Will rates be Up, Down, or Paused?

Berkshire Hathaway (BRKB) posts record profit – with profits up 38%.

Microsoft – looks to double in the next three years.

Advised all members to take profits on U.S. Steel.

John’s BRKB LEAPS are up 50%.

S&P – looking for a lower low and then a year-end rally to take us up to 480 or 500.

A drop of 17+% down to 380 is possible if the inflation number is bad.

Time correction on Apple, Meta, and Netflix.

Nvidia (NVDA) hits an all-time high. The target is 1000.

John believes UPS could be fully automated in five years’ time making all staff redundant.

Looks like a good entry point on FCX.

Walt Disney is out of favour.

Health Care is a buy here.

Morgan Stanley – a great buy here.

Japanese stocks are making a killing off a weak yen.

Bonds - Looking for the Double Bottom

10-year Treasury yields hit a new 16-year high at 4.38%.

The U.S. Budget Deficit is climbing once again increasing Treasury Bond Sales.

The whole falling interest rate/rising bond price trade has been delayed for six months which is thanks to the Fitch downgrade and hotter-than-expected economic growth at 2.40% for Q2.

Keep buying 90-day T bills, now pushing a 5.31% risk-free yield.

Still looking like 3.50% 10-year yield by end of 2023.

Junk Bonds ETFs (JNK) and (HYG) are holding up extremely well with a 6.5% yield.

Bonds (TLT) still likely to hit $110 by year-end.

A hot inflation number will be a big negative.

Foreign Currencies

“Higher for Longer” gives an adrenaline shot for the US$ taking it to new 2023 highs.

Yen headed to new multi-year lows at $150.

Investors flee to safe-haven short-term investments.

“Higher for Longer” delays the first rate cut to March or even June.

Collapse of the dollar is now a 2024 story.

Aussie dollar collapse prompted by slowing Chinese economy not buying their energy or commodities.

Buy FXE, FXB, FXA on big dips. Avoid (FXY).

Aussie now at around 64.74 – headed for parity.

Energy and Commodities – on a roll

Natural gas is now trading in new higher range awaiting a breakout.

An Australian strike shut down on LNG export facility still looming.

Russian output down 800,000 b/d since January due to sanctions and sinking tankers.

Unilateral Saudi 1 million b/d cut in June worked.

Oil trading at new higher range at $78-$85.

China expects LNG price spike later this year due to coming supply shortages and a recovering economy.

Buy all energy on dips.

FCX – Buy

Precious Metals

“Higher for Longer” knocks the wind out of the precious metals rise.

Interest rate rises in Europe and Australia aren’t helping either.

Gold headed for $3000 by 2025 but will back off from new highs first.

The drivers for the gold rally will be falling interest rates and the demise of crypto.

Silver is the better play with a higher beta.

Russia and China are also stockpiling gold to sidestep international sanctions.

Severe short squeeze in copper is developing, leading to a massive price spike later in 2023 once the Chinese economy comes back online.

John will visit Ukraine in three weeks’ time. He will issue a report and video on Ukraine war.

GOLD stock shows great new LEAPS opportunity.

Real Estate

Existing home sales drop again demolished by record high mortgage rate.

July saw sales decline by 2.2% to a six-month low on sales of 4.15 million units.

Home resales, which account for a big chunk of U.S. housing sales fell 16.6% on year-on-year basis in July.

China’s largest real estate developer goes bankrupt, crushing Asian stock markets along with it.

July Housing starts come in steady at up to 4.0% at 1.45 million.

Building permits were unchanged. June numbers were revised down big.

Home builders’ sentiment dives on record mortgage highs, down 6 points to 50 in August.

Trade Sheet

Stocks – buy big dips at the bottom of the range.
Sell big rallies to hedge holdings.
Bonds – buy dips.
Commodities – buy dips.
Currencies – sell dollar rallies, buy currencies.
Precious metals – buy dips.
Energy – buy dips.
Volatility – sell short over $30.
Real Estate – buy dips.

Wishing you all a great weekend.

Cheers,

Jacquie

September 1, 2023/by Mad Hedge Fund Trader

August 30, 2023

Jacque's Post

(THE COST OF CANCELLING OUT THE NOISE OF THE WORLD)

August 30, 2023

Hello everyone.

They are everywhere you look. People are wearing them. I’m not talking about the latest sneakers or the ubiquitous wristbands, I’m talking about headphones or earbuds. On public transport – trains, buses, planes, and even on scooters and bicycles, this piece of equipment is attached to the human ear. And even people just going about their daily lives in shopping centres, at the grocer, at the gym, or on a jog in the park, you can see these devices firmly nestled in the ear or over the ear, so the noise of the world is stopped, like it has become an offensive intrusion in our lives.

Where once the sounds of the world were considered benign and/or an unavoidable distraction, big business has now wrapped up noise and marketed it as a hazard to our health. I know excessive and prolonged noise is not healthy. What I am saying is that silence is now big business. Globally, the noise-canceling headphones market generated $13.1bn in 2021, a figure that is expected to more than triple to $45.4 bn by 2031, according to Allied Market Research data.

In Australia, Google searches for “noise-cancelling” and "earplugs” have steadily risen in Australia in the last five years. Earplug brands are now targeting parents by suggesting that their device will help prevent “burnout” while caring for children.

Are they helpful, and what are the costs of long-term use?

The technology that cancels out noise was first developed in the 1950s to reduce cockpit noise for pilots. Bose released the first commercially available headset in 1989, and this was also marketed for aviation. The headphones use a technology known as active noise control: a microphone picks up ambient sounds and an amplifier produces sound waves that are exactly out of phase. The result, when the opposite sound waves collide, is a canceling out of noise. They appear to work best for low-frequency sounds less than 1kHz, such as the roar of an airplane engine, the drone of road traffic, or the hum of an air conditioning unit.

We all know that too much noise is harmful to hearing, but it is also harmful to our broader physical health. Long-term pollution has been linked to increased risk of cardiovascular disease, including heart attack deaths and depressive symptoms. Strict guidelines stipulate that workers should not be exposed to more than the average of 85dB of noise – think of the noise of a blender – over eight hours.

Of course, there are certain settings where earplugs are necessary to prevent hearing loss, such as on building sites, in the military, at concerts, or in very loud work environments.

But in a recreational use setting, headphones can contribute to hearing loss when listening volumes are too high. As yet, we don’t have any regulations about the use of headphones or earbuds around recreational noise. Without us even realizing it, we may be damaging the neurons that attach to the sensory cells in the ear. These nerves that transmit information about listening in noise are the first to be damaged …. And research shows that a clinical audiogram may not detect this.

Many studies have shown that constant earplug wearing can result in new-onset tinnitus. It was found in one experiment that the tinnitus people developed was felt as “high-pitched”, which corresponded to the range the earplugs were blocking. Professor David McAlpine, academic director of Macquarie University Hearing in Australia argues that if you “stop putting sound into your ears… your brain overcompensates by turning up its internal gain.” Furthermore, McAlpine comments that “it completely alters your neural pathways.” So McAlpine sets us straight by saying that “monkeying around with the sound energy going into your ears is monkeying around with what your brain evolved to be doing.”

Workplaces are often noisy environments and pose a distraction to many employees. The pandemic forced many of us to work from home, and we came to realize how much noise we had been putting up with. But simply wearing noise-cancelling headphones at work should not be the broad solution to work noise. The design of the workplace needs to be addressed to incorporate areas where focused work can be done in quiet zones, while collaborative work can be done in other zones. We do have the “quiet carriage” on trains, so why not in offices and workplaces?

Much more research needs to be done in this area, but it seems to me that when we start to interfere with nature and how the human body is meant to work, negative consequences can manifest. Whether or not these devices do us harm, big business will still market them as a way to deal with the noise in our modern world and profit from it.

Cheers,

Jacquie

August 30, 2023/by Mad Hedge Fund Trader

August 28, 2023

Jacque's Post

(THE MARKET APPEARS TO BE IN A CONSOLIDATION PHASE AS INTEREST RATES CONTINUE TO BITE)

August 28, 2023

Hello everyone,

Welcome to a new week. A Non-Farm Payroll week. And the week after the Fed informed us that interest rates would keep rising. The hype about Nvidia's (NVDA) earnings was well and truly put in its place once Powell at Jackson Hole started his speech. Many are now scratching their heads – is this a bull or bear market?

It’s complicated. This year through July, the S& P has risen 19.5% for a total return, including dividends, of 20.7%. When the market hit its bottom on Oct. 11, 2022, and then rose into June 2023 to gain 20%, many thought that a new bull market had begun. But alas, the markets had other ideas. This pause in August has been a healthy lull – which may continue into September. Only in a fantasmagorical land would the market continue up without a pause. Let me remind you, we are part of the real world and markets will take a breath when they have run too hard. They are also responding to interest rate movements and other fundamental data. So, let’s interpret the market movement as a non-trending market, which is in a period of consolidation.

Are you anxious about the market movements? Then step back from your micro analysis of the markets and take the macro view. I often rant about taking the big picture view of the market because investors sometimes sell their stocks when markets are drifting or correcting off their highs. And when the market has fallen quite substantially, many investors are often too nervous to buy. There are times when we would all like to grab the market and shake it out of its annoying directionless movements, but the market always knows the way. We just must be patient enough to follow and understand there is a time to have a break and a time to buy. The time to sell is an individual thing because it depends on whether you are short-term focused or investing for the long term.

I am bullish on the markets in the long term.

If you are looking for somewhere to put some funds now, 90-day T-bills are a good idea. Make sure you hold some cash, so you can make great stock buys/option trades as we near the end of this consolidation phase of the market.

Since interest rates started rising many people worldwide have been struggling with the cost-of-living pressures. People in the U.S. and elsewhere are tossing up whether to pay the utility bill or buy food, students are doing without many things, so they can buy textbooks and retirees are canceling overseas travel in favour of shorter breaks in their own country. Yet, many businesses are short of staff. And they will probably stay that way. Who is going to work for $7.25 an hour when you may be able to drum up some business working in an online platform like Fivver or Superprof for triple that amount? Furthermore, Gen Z, and other generations increasingly see the financial markets as a way to invest and earn some cash flow. The pandemic was a jolt to the world economy, and people are now deciding what they are worth and sending that sentiment out to the community.

Housing is another area that shows a picture of extremes. I have just read about a 71-year-old woman who has rented a house for 25 years, and at the beginning of August, she received an eviction notice. The rate of homelessness in Australia has become extreme. And the statistics are startling. About 19,300 Australians aged 55 or over are currently homeless, and 440,000 older households will be unable to find or afford suitable housing by 2031 as shown by research from the Australian Housing and Urban Research Institute. The research goes on to show that the total number of people aged 55 or over with a mortgage debt is 1,504,793, a 63% increase in 10 years. The Australian retirement system is built on the assumption or the expectation that older people will own a home by the time they retire. This is increasingly not the case.

Some housekeeping:

As per your request on the survey, I connected many of you with your peer last week. I hope you have made contact and find the connection helpful. If you would like to be set up with a buddy to learn more about the markets and trading, please drop me an email to request it. My email is munroj1461@gmail.com

I will be holding a Zoom on Thursday this week. Although I will send out a blanket invitation to everyone, you are welcome to drop me a note and let me know if you can attend.

I am still working on the social get-together date.

Impact of interest rates and inflation on the country.

Wishing you all a great week.

Cheers,

Jacquie

August 28, 2023/by Mad Hedge Fund Trader

August 25, 2023

Jacque's Post

(FOR HIS 18TH BIRTHDAY MY SON WANTS A *%$#&?)

August 25, 2023

Hello everyone,

My son, Alex, turns 18 next month and so is officially classed as an adult. So, I asked him what he wanted for his significant birthday.

I expected the most common requests: money, new iPhone, clothes, etc.

But he responded: a trading account in his name (which I will fund together with his savings)

I said, ok, that’s easy. Did anyone here ask for that from their parents when they turned 18?

But after we open that account, the real education starts. How many parents have tried to advise their adult teenagers how to manage their finances only to be met with offhand remarks, ridicule, rebukes, or sometimes even just plain disinterest? I imagine many parents have been blindsided by this old comment from young adults: “You invested in this stock/investment, and lost money, so why should I listen to you.”

Thankfully, my son and I have come to an understanding, whereby he will liaise with me before he invests/places a trade. This ensures that we, as a family, are moving in the same direction and are not at odds with one another, which can make achieving an end goal very difficult.

There are dozens of books in the world on finance and how to manage your money. But if you wanted one for young adults, I would recommend you look at the following: I Want More Pizza: Real World Money Skills for High School, College, and Beyond by Steve Burkholder.

Primary topics discussed include saving, spending, prioritization, goal setting, compound growth, investing, debt, credit cards, student loans, mental blocks, and taking real-world action.

Teaching young adults about anything, especially financial education, should be done in small chunks of time. Focus for about 20 minutes on a topic and then break. This ensures what is shared is taken in and processed. After all, does an 18-year-old want to hear your well-meaning advice for extended periods? Most young adults are easily distracted by other things going on in their lives.

The important things a teenager turning 18 can do/should know:

1) Open a bank account.
2) Open a credit card.
3) Understand their expenses.
4) Avoid debt at all costs.
5) Understand that there are dozens of ways to make money.
6) Get a job.
7) Be Careful Who You Trust.
8) You Don’t Have to Have It all Figured Out.
9) Take responsibility for Your mistakes.
10) Be kind to others and yourself.

I will also encourage Alex to keep a trading journal so that he can see where his profits and losses occurred. And he can also make notes on each trade he does. It’s a good habit to start and keep.

Beside the Thames in Twickenham, U.K. this past summer

The Fed remarks at the Jackson Hole Symposium on Friday could cause some volatility in the markets. Hang on!

Wishing you all a wonderful weekend.

Cheers,

Jacquie

August 25, 2023/by Mad Hedge Fund Trader

August 23, 2023

Jacque's Post

(SUMMARY OF THE GREAT ROTATION – AUGUST 16, 2023 WEBINAR)

August 23, 2023

Hello everyone,

Webinar Title: The Great Rotation

Thursday, September 6: San Diego luncheon.

Performance: -4.70% MTD
Year to Date: 60.8%
Since inception: +657.99%
Trailing one-year return: +92.45%
Average annualized return: +48.15%

Method to My Madness

Rotation underway from Big Tech to industrials, commodities, and energy.
Tech sell-off should be brief/short-term.

Rising interest rate fears are pushing Bonds down.

The Fall may present an excellent window to buy stocks. Make sure precious metals and commodities are at the top of the “buy” list.

Be patient – wait for the set-up.

If you’re interested in SNOWFLAKE wait for a bigger dip.

John’s suggestion – buy TLT LEAPS at 90.

The Global Economy – Bouncing

Nonfarm Payroll drops to 187,000 in June. One year low.

Headline unemployment rate returned to 3.5% - a 50-year low.

Inflation jumps to 0.2% in July and 3.2% YOY.

Rents, education, and insurance (climate change) were higher while used cars were down 1.3% and air fares plunged by 8.1%.

PPI rose 0.3% in July.

Deflation hits China – economy struggling post-COVID.

Stocks – Correction Time

U.S. seeing big equity outflows. Approx. 15b fleeing the market. They believe the party is over for 2023.

Moody’s threatened downgrade of regional banks.

Albermark (ALB) to boost Lithium Production with a new filtering technology at an Arkansas plant to meet exploding demand from EV makers.

Berkshire Hathaway (BRKB) posts record profits up 38%.

Rivian (RIVN) beats, losing only $1.08 a share versus an expected $1.41.

Biden cracks down on tech.

Buy Adobe on dips.

Freeport McMoran (FCX) – looking like a great LEAPS trade at this level.

Keep buying Berkshire (BRKB) on dips.

Emerging Markets (EEM) strong buy here.

BONDS – Probing for a Bottom

The falling interest rates/rising bond prices are delayed after Fitch downgrade and hotter than expected economic growth at 2.40% for Q2.

U.S. Debt downgrade from AAA to AA+ by Fitch rating agency for only the second time in history.

Bonds (TLT) took a hit – but they are still the safest and most liquid investment in the world when held to expiration. Keep buying 90-day T-bills = 5.2% risk-free yield.

Still looking like 3.50% yield by the end of 2023.

Junk Bond ETFs (JNK) and (HYG) still holding up extremely well with a 6.5% yield.

According to John Bonds are still likely to hit $110 by year-end.

Foreign Currencies

Japanese Yen is headed for multi-year lows at 150.

Investors flee to safe-haven short-term investments.

Any strength in U.S.$ will be temporary.

Look for new dollar lows by the end of 2023.

Buy FXE, FXB, and FXA on dips. Avoid FXY.

Energy and Commodities – Reborn Again

Natural Gas soars to a new 2023 high and accomplished an upside breakout on all charts. European gas prices have just jumped 40%. An Australian strike shut down an LNG export facility.
Oil may break out to $100.
China expects LNG Price Spike later this year due to coming supply shortages and a recovering economy.

Exxon Mobile Corp. (XOM) –LEAPS territory.

Precious Metals – Take a Hit.

No Fed Action to lower rates undercuts precious metals. Interest rate rises in Europe and Australia aren’t helping either.

Gold is headed for $3000 by 2025.

New drivers are soon to be falling interest rates and the demise of crypto. Silver is the better play with a higher beta.

Russia and China are also stockpiling gold to sidestep international sanctions. A severe short squeeze in copper is developing, leading to a massive price spike later in 2023.

Real Estate – Coming Back

Home Mortgage rates hit a 22-year high at 7.24%. The existing home market and new home market is on fire in anticipation of the coming rate fall.

Rising rents still the big input into the Fed’s inflation calculation.

Case Shiller rose by 0.7% in May.

We are at the beginning of a decade-long demographic-driven bull market in residential real estate.

Economic growth and market performance should improve in 2023, but things may get worse before they get better. So, there may be some strong cross currents ahead.

Cheers,

Jacquie

August 23, 2023/by Mad Hedge Fund Trader

August 21, 2023

Jacque's Post

(AUSTRALIA WEIGHED DOWN BY A FALTERING CHINESE ECONOMY)

August 21, 2023

Hello everyone,

The Australian Dollar has been tumbling recently –down from 68.8 U.S. on June 15 to 64 U.S. last week - and this is a direct reflection of growing anxiety about the global economy and the financial markets.

These concerns are primarily centered around the health of the world’s largest economy, China. New construction starts (or new buildings) fell 24.5% in the first seven months of the year.
Property prices in some areas have “crashed”, down by 25% from their October 2021 highs.
Prices are falling as demand slides, and that’s weighed against enormous levels of debt held by property developers and asset managers.

Asset manager Zhongzi and property developers Country Garden and Evergrande are all showing signs of financial stress. Evergrande filed for Chapter 15 Bankruptcy in New York on Friday, - this move protects its U.S. assets while it seeks to negotiate with its creditors.

On Friday, last week, China’s central bank intervened to support the local currency, the Yuan – a move to stabilise its economy. According to Westpac senior currency strategist, Sean Callow, China’s central bank allows the yuan to trade +/- 2% each day either side of its fixing rate.

The Chinese economy is looking the weakest it’s been since COVID, including slipping into deflation. The Australian dollar is out of favour as global investors buy up the U.S. dollar.

U.S. interest rates, China’s fragile property market and the RBA’s comments on inflation are weighing on the Australian dollar. We could see 0.62 in the Australian dollar before this slide is over.

An uncontained financial crisis in China has the potential to sideswipe the capacity of both the government and asset-rich Australians to spend. It would also obliterate Australia’s export sector. If this happens, a deep local recession is a possibility.

The next few months see shares at high risk of a correction given high recession and earnings risk, as well as the risk of still more hikes from central banks and poor seasonality out to September/October.

The health of China’s economy could determine whether a recession is on the cards.

Have a good week.

Cheers,
Jacquie

August 21, 2023/by Mad Hedge Fund Trader

August 18, 2023

Jacque's Post

(AN UPDATE ON MR MARKET AND OXY)

August 18, 2023

Hello everyone,

We are now into the middle of August. It’s looking like August and September will be bearish months for the markets and yields on the 2- and 10-year Bonds will continue to make a final push to the upside. Yields on the 10-year could get up to 4.33% or even 4.80%. Then there is likely to be a medium-term retracement. S&P 500 could dip to around 4,300 before rallying into the end of the year. The gold sell-off is persisting. A final bottom may be found around 1880 or 1850, or even into the 1700’s if there is a capitulation sell-off. Then, it is the buy of the century. Look for Oil to be in the low to mid $90s by the end of the year.

There is constant talk about whether the so-called landing will be soft or hard. Whatever it is, volatility is sure to be present. So, if we have some gut-churning down days in the market, and all the numbers turn red on your screen, please don’t sell everything in your portfolio. This only benefits the brokers, who get the commission on your sales, and the institutions who buy everything you sold at great prices.

Update on Occidental Petroleum
Our OXY trade sent out at the beginning of July is doing well. I hope many of you managed to enter the trade or bought the stock or did both. Looks like we got in near the low in the stock.

In a deal worth more than $1 billion, Occidental Petroleum (OXY) will acquire Carbon Engineering. It’s just another sign how focused the oil majors are on carbon mitigation. Such partnerships will help Occidental develop carbon air capture solutions as clean energy grows increasingly important to corporate America. Occidental will also likely be a beneficiary of the Inflation Reduction Act benefits for carbon storage. (I mentioned the latter act in Monday’s Post when I was speaking about Hydrogen). Occidental and a handful of other companies such as Baker Hughes, Weyerhaeuser, and Bloom Energy (see Monday’s Post) are potential winners arising from the growing focus on carbon technology.

Some housekeeping:

I am now starting to pair or group subscribers together according to the Buddy System. So, if you answered B in the survey (and would be happy for some help) you will be likely to get a call or email from your Buddy peer over the next week or so. This will only work if people engage with the idea. It is designed to help everyone.

A social get-together is in the planning. It’s likely to be in the next few months. I will give you a fair warning. A survey will be sent out, so we can gauge interest and numbers. It will be held in the U.S.

August Zoom meeting will be held in the next couple of weeks. A Zoom link will be sent out giving you access. This is an informal meeting allowing you to interact with other subscribers, ask questions and make comments.

Wishing you all a great weekend.

Cheers,

Jacquie

August 18, 2023/by Mad Hedge Fund Trader

August 16, 2023

Jacque's Post

(CRUNCHING THE NUMBERS ON HOUSE RENOVATIONS)

August 16, 2023

Hello everyone,

Has anyone ever bought a fixer-upper house? Did you flip it?

Are you looking to buy your first home?

Are you thinking of buying a fixer-upper house as an investment and a long-term hold?

So, how much do you think you should put into it?

Let’s do some numbers.

If you need a mortgage, then the size of the mortgage should be no larger than three times your annual salary. So, if the household makes $150k per year, then it is probably not a good idea to shop for houses that sell for more than $450k.

The monthly mortgage payments should stay under 28% of your gross monthly income. Let’s say you make $5k per month (before taxes), then your monthly mortgage should not be more than $1400.

You should then be looking for a home that needs renovating for less than the difference to your budget. So, if $400,000 is a hard budget, then you would be looking for a $350,000 house that needs $50,000 in renovations.

How much should I renovate?

As a person who has done renovations on a home, I can tell you that estimates and actual costs rarely match. That’s why it is vitally important to leave room in your budget for all the surprises that will inevitably appear.

If the house is in a great position, but the problems will be extremely costly to repair, you should probably pass. For example, problems with foundations, an outdated electrical system, a broken plumbing system, or a leaky roof are kinds of repairs that can lead to a more costly and time-consuming situation where you don’t see the yield on that return on the sale as opposed to redoing the kitchen, redoing the bathrooms, and just painting the house and doing aesthetic items. Generally, owners and buyers are willing to pay a premium for the aesthetic items as opposed to those structural items that keep the house running and from falling apart. When I renovated my house, I concentrated on the kitchen(s) and the living area and the bathrooms. I also had the house painted. Before I started renovating, the walls in the kitchen were painted yellow and every bedroom had different coloured walls. The kitchen floor was linoleum with a very bright pattern. So, I had that ripped out and replaced it with board floors.

Is this house going to be your home or is it an investment property?

Be careful how much you put into any home, whether it is your own or an investment property. If it is your home and you intend on staying there for decades, then the pot of funds you spend on the property can be a little larger than average. If it is an investment property, be very mindful of how much you spend and where in the house those funds are directed. It is also important to think about the area where the house is situated. What are the re-sale prices in the neighbourhood? If you put more into a house than the median sales values are, you will have trouble selling the property. It is probably a good rule of thumb not to renovate a fixer-upper above 10-12% of the median sales price in your area. However, if you are patient, some renovations will prove beneficial when it comes time to sell. Kitchens and bathrooms should always be the first areas you renovate as they are the first areas a prospective buyer looks at.

Financing your home renovations

The best home improvement loans (U.S.)

Best overall: LightStream Personal Loans

Best for borrowing smaller amounts: PenFed Personal Loans

Best for lower credit scores: Upstart Personal Loans

Best for long repayment terms: SoFi Personal Loans

Best for fast funding: Discover Personal Loans

Enjoy the home improvement journey. Expect hiccups and take them in your stride. It will all be worth it in the end.

Cheers,

Jacquie

August 16, 2023/by Mad Hedge Fund Trader

August 14, 2023

Jacque's Post

(WHAT’S A POTENTIAL $2 TRILLION GREEN FUEL SOURCE – LET’S TAKE A LOOK AT HYDROGEN)

August 14, 2023

Hello everyone,

Hydrogen equities have been tossed about and beaten down in recent months. However, many analysts, believe that this sector remains central to the energy transition and could become a $1 trillion to $2 trillion -size market by 2050.

What deflated hydrogen stocks?

Higher interest rates.
Lack of profitability and improvements in batteries.

To support the hydrogen sector, countries around the world have brought in policies.

Analyst, Neil Beveridge comments that The U.S.’s Inflation Reduction Act and Programs in the European Union and China support the demand case for hydrogen.

Beveridge goes on to argue that most energy companies believe that hydrogen will play an important part in their business in the future. Importantly, he also points out that there are simply no alternatives in areas such as heavy industry, chemicals, and heavy transport. Green hydrogen, he believes, will be the driver of momentum in the industry. It’s the “cleanest” method of hydrogen production fuelled by renewable energy sources, while blue hydrogen is produced from natural gas mixed with hot steam and a catalyst.

Do we want a fast and cheap solution to decarbonization? – then a mix of green and blue hydrogen could be our answer.

Beveridge notes that over the past year, there has been a 200% increase in blue hydrogen projects announced, amounting to 14 million tons per annum.

Hydrogen demand in the U.S. alone could increase up to 17 million metric tons by 2025 and 63 million metric tons by 2050. The heightened demand will in turn result in rapid growth within the hydrogen generation sector at a compounded annual growth rate (CAGR) of at least 9.2% into 2025, resulting in a forecasted market value of $201 billion.

The hydrogen industry is still in its early stages of development, and growth may not start to show a steady pace until 2025. However, the policies are in place to support this industry and analysts remain optimistic about the future.

TOP HYDROGEN STOCK PICKS

Plug Power stock has fallen more than 27% year to date, but many analysts are arguing that shares could double in value from its present price.

Plug Power is targeting $3 billion in revenue by 2025 and $5 billion by 2026 and has firm plans in place in terms of electrolyser deliveries in the U.S.

Why Plug matters!

PLUG’s key hydrogen product and solution offerings currently include the following:

GenDrive – A hydrogen-fueled polymer electrolyte membrane (“PEM”) fuel cell system used in powering material-handling industrial vehicles, including electric forklifts, Automated Guided Vehicles, and ground support equipment.
GenFuel – A liquid hydrogen fueling delivery, generation, storage, and dispensing system that could be installed on client-site to facility refueling of hydrogen fuel cells.
GenSure – A stationary fuel cell solution that supports the power requirements of the telecommunications and utility sectors; examples of GenSure applications include serving as backup power generators for data centers and power grids.
ProGen – A fuel cell engine technology currently used in mobility and stationary fuel cell systems, as well as engines in electric delivery vans.
GenFuel Electrolyzes – A modular and scalable hydrogen generator that splits water using renewable energy inputs, such as solar or wind power, into green hydrogen and oxygen through a process called “electrolysis.”
GenCare – An internet-of-things-based maintenance and on-site servicing program for the GenDrive, GenSure, GenFuel, and ProGen systems
GenKey – A vertically integrated turnkey solution that bundles PLUG’s product and service offerings based on customer needs.

Bloom Energy is another U.S.-based hydrogen company. The stock has declined 21.3% year to date. Many analysts forecast that the shares could rally 73% over the next 12 months.

Doosan Fuel Cells is a hydrogen company based in South Korea. It trades in the U.S. through over-the-counter securities. It is a leader in developing the technology used for fuel cells in stationary power. Bernstein points out that the stationary power market is forecasted to grow 75% in 2023 on a year-over-year basis.

The next five to ten years will be an opportune time for the hydrogen industry. PLUG has an established reputation in the industry and advanced technology as well as an impressive list of customers (e.g., Amazon, (AMZN) Walmart (WMT), and The Home Depot (HD). The transition to alternative energies should see this industry boom in the decades ahead.

Please note that I am not making any recommendation to buy any of the shares here. I am simply sharing analysts’ views on the top stocks in this industry with an eye on what could happen in the future. The industry looks promising, and prices of these top stocks look attractive. Any purchase of a parcel of shares in this industry would be done with a long-term perspective.

Wishing you all a great week.

Cheers,

Jacquie

August 14, 2023/by Mad Hedge Fund Trader

August 11, 2023

Jacque's Post

(WHAT’S HAPPENING AT ROBLOX AND PAYPAL?)

August 11, 2023

Hello everyone,

Roblox gets punished after the earnings report.
Roblox stock took the lift down yesterday after its latest earnings report, giving up almost all the gains it had made so far this year. The videogame-platform company’s issues with managing costs, and uncertainty over its timeline to increasing profitability are posing problems for the market.

Roblox stock (RBLX) dropped 22% after it reported a bigger quarterly earnings loss than expected. The shares were staging only a small recovery on Thursday, up 2% in premarket trading.

That leaves Roblox stock only marginally up in 2023 so far, and down 26% over the last three months. There is growing apprehension over its ability to cut costs and increase its earnings margin.

Roblox executives are pinning their hopes on the launch of its new advertising platform which they hope will help grow its income ahead of expenses in coming quarters.

Roblox is one of my son’s favourite places to hang out with his friends. He designs environments here and plays competitive games as well. The creative digital worlds are designed with all age groups in mind. No one is ever too old to play here.

PayPal launches U.S.$ stable coin (PYUSD).

PayPal USD is designed to contribute to the opportunity stable coins offer for payments and is 100% backed by U.S. dollar deposits, short-term U.S. Treasuries, and similar cash equivalents. PayPal USD is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company.

From early August onwards, eligible U.S. PayPal customers who purchase PayPal USD will be able to:

Transfer PayPal USD between PayPal and compatible external wallets
Send person-to-person payments using PYUSD.
Fund purchases with PayPal USD by selecting it at checkout.
Convert any of PayPal’s supported cryptocurrencies to and from PayPal USD.

Dan Schulman, president, and CEO of PayPal states that the “shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S.$.” Furthermore, Schulman argues that “our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”