Jacque's Post Archives - Mad Hedge Fund Trader

August 4, 2023

(WHERE THE 10-YEAR TREASURY YIELD COULD BE HEADING AND WHY WE SHOULD CARE?)

August 4, 2023

Hello everyone,

Treasury yields rose on Thursday as investors digested fresh economic data and weighed Fitch’s U.S. downgrade from AAA to AA+ citing “fiscal deterioration” and concerns about growing general debt. The 10-year Treasury was up 11 basis points at 4.187%. The yield on the 2-year Treasury was flat at 4.887%.

What is a Treasury yield?

The Treasury yield is the annual interest rate that the U.S. government pays on one of its debt obligations, expressed as a percentage. In other words, Treasury yield is the annual return investors can expect from holding a U.S. government security with a given maturity.

Why is the 10-year Treasury yield important?

The 10-year Treasury yield indicates the overall state of the stock market and the general economy. Higher yields can indicate higher inflation expectations. It also influences many other interest rates, including mortgage interest rates, auto loans and business loans. Yields have a see-saw effect on these rates.

When the 10-year yield goes up, so do mortgage rates, and other borrowing rates. When the 10-year yield declines and mortgage rates fall, the housing market strengthens, which in turn has a positive impact on economic growth and the economy.

The 10-year Treasury yield also impacts the rate at which companies can borrow money. When the 10-year yield is high, companies will face more expensive borrowing costs that may reduce their ability to engage in the types of projects that lead to growth and innovation.

The 10-year Treasury yield can also impact the stock market, with movements in yield creating volatility. Rising yields may signal that investors are looking for higher-return investments but could also spook investors who fear that rising rates could draw capital away from the stock market.

The chart below shows possible targets on the U.S. 10-year benchmark yield.
In the short term, the latest advance in yields commenced on their 3.7268% low of July 19th. We can see that support now lies at 4.00/3.92%, with an opportunity for rally toward potential targets around the 4.36% and 4.80% levels, before exhaustion. Then we may see a medium-term pullback before another possible rally in yields.

Wishing you all a wonderful weekend.

Cheers,

Jacquie

August 2, 2023

Jacque's Post

(INVESTING IN SILVER IS A SMART MOVE FOR THE LONG TERM)

August 2, 2023

Hello everyone,

Let’s look at Silver today.

Silver is one of the many precious metals you can invest in, particularly when you are looking for long-term growth.

Silver isn't just a metal to collect and stow away for the future. It has endless real-life uses, and with those uses — and future, yet undiscovered ones — comes the potential for growth.

Silver is not only a precious metal but also an industrial metal. Silver is used in medical applications, solar panels, batteries, nuclear reactors, semiconductors, touch screens, and more.

It's also a large component in electric vehicles, which have jumped in production and popularity in recent years. By 2025, The Silver Institute estimates that 90 million ounces of silver will be needed for vehicle production.

It's smart to invest in silver if you have the patience to hold it for the long term. With a growing commitment to green infrastructure, clean alternative energy sources, and anticipated growth of EVs, we should only expect the demand for silver to grow from here.

How to invest in silver

There are many ways to invest in silver. You can purchase silver coins and bullion (just remember you need somewhere to store it). You can also buy stocks in silver mining companies or invest in silver ETFs. Examples of silver stocks and ETFs include WPM (Wheaton Precious Metals), SLV (iShares Silver Trust ETF), SIL (Global X Silver Miners), AGQ (ProShares Ultra Silver), NEM (Newmont Corporation), SVM (Silvercorp Metals), AG (First Majestic Silver Corp.)

You can also open a silver IRA, which allows you to use silver to build your wealth for retirement. These are specialized retirement accounts that must be managed by an IRS-approved custodian. You can only purchase certain coins and bouillon, and they must be stored in an official depository. (There are also gold IRAs if you're interested in investing in gold).

Invest in Silver if you are comfortable with some risk and volatility.

Silver is generally seen as a safe investment, but its value ebbs and flows more than gold does.

In the last year, silver prices have gone as low as $17 an ounce to nearly $26 an ounce. Over the last decade, silver has vacillated even more. Its lowest price was just under $14 per ounce, while it cost almost $28 per ounce at its peak. That's a peak-to-trough difference of 101%.

Still, the volatility can be worth it — at least for investors with patience and good timing.

Invest in Silver if you want to diversify your portfolio.

Silver is also a smart way to diversify your portfolio and offset your exposure to other, riskier assets, such as stocks.

"It can be smart to invest in silver when you're seeking diversification or when you expect inflation or economic turmoil," says Nick Ganesh, manager at Endeavor Metals. "Silver often holds value well under these conditions."

When silver investing isn't wise

Silver can often be a smart investment, but it's not right for everyone.

Don’t invest in Silver if you want a risk-free investment.

One of the biggest silver investment disadvantages is its volatility. While that can often mean big growth, it can mean significant loss if you need to sell at the wrong time.

If you're not prepared to ride out the waves of this volatility, you may want to explore other investment options. If you can ride out the volatility waves, you will do well with Silver in the long term.

Don’t invest in Silver if you're looking for quick returns or dividends.

If quick profits or a regular income stream are what you're looking for, silver won't be of much help.

Silver doesn't provide interest or dividends. So, if you're seeking a steady income stream, other investments might be more suitable. Assets like stocks or bonds may provide better returns.

Don’t invest in Silver if you need easy liquidity.

Silver isn't completely illiquid, but if being able to sell your assets fast and turn them into cash is a priority, it's not the best choice.

Warren Buffett has invested almost 1 billion in Silver. So, if you’re looking for confirmation of the value of Silver as a long-term hold, there it is.

In 10 years’ time, Silver could grow to a minimum value of $150/ounce. If the conditions are right, Silver could reach up to $750/ounce.

Have a great Wednesday.

Cheers,

Jacquie

Jacquie's Post Trade Alert - (CVX) July 31, 2023 - BUY LEAPS

Jacque's Post

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

July 31, 2023

Jacque's Post

(FINANCIAL LITERACY - SAVING AND INVESTING)

July 31, 2023

Hello everyone,

After Friday’s newsletter about my financial education, I thought I’d explore more about financial literacy.

Becoming financially literate is a skill we can all acquire. There are several principles we must understand to achieve competence.

We must know how to budget.

We must know how to save and invest our money.

We must be able to manage our debt.

We must be able to plan for our financial future.

We must be able to protect our assets through risk management.

We can achieve all of these by building financial knowledge, skills, and behaviour – and by setting realistic financial goals.

Many people say they know how to do all these things, but our behaviour around money seems to be put to the test when we are under pressure or stress or are trying to reach our goals too quickly. Sometimes we think we are fixing a problem simply by throwing money at it, when in fact, it can sometimes make matters worse. How many of us have invested in haste and regretted it later.

Let’s focus on one aspect of financial literacy today – saving and investing our money. In particular, I want to highlight the difference between saving and investing.

When we want to save money, we put it in a bank account where it is readily available and at low risk. so, we can reach our goals. When we invest our money, we are putting it into something specific, maybe an asset, which comes with risk, but it has the potential for higher returns over a longer-term horizon providing us the opportunity to grow our wealth. We are meant to leave this invested money alone, so it will grow.

Let’s see. Do you have a spouse or partner? Do you have a shared bank account? Or do you have separate bank accounts? Can you explain why you have one or the other?

It is important to identify each person’s spending behaviours. What works for one couple may not work for another couple. Using a joint bank account for utility bills is often a good idea as everything is transparent. Having a separate bank account for your own personal spending puts the responsibility back on you regarding how you budget your finances. If you really want to test yourself and know what you are spending your money on, write down in a book where you are spending your money. So put the date, the name of the retailer/business, and the amount. And I mean everything. Cappuccinos included. Do this for a month or more and you will soon get an idea where you can make cuts to your spending.

So, now we know how to save, but how do we invest or what do we invest in?

I’m going to list here the best ways to invest so you can build wealth that lasts.

# Stock ETFs and mutual funds.

# Low-cost index funds.

# Stocks on NYSE & NASDAQ.

# Real estate (or REITS)

# Treasury bills.

# Online savings accounts- they give a higher yield because they don’t have the overhead of a physical bank location.

Always be mindful of “get rich quick” schemes. They are everywhere in the investment world today. It’s vital to conduct your due diligence before you invest your hard-earned money. Do you know of a “get rich quick” scheme or “Ponzi scheme” that you heard about or became aware of?

Wishing you all a wonderful week.

Cheers,

Jacquie

“Formal education will make you a living, self-education will make you a fortune.” - Jim Rohn

July 28, 2023

Jacque's Post

(2008, AN INVESTMENT BANK AND MY FINANCIAL EDUCATIONAL JOURNEY)

July 28, 2023

Hello everyone,

Today, I want to tell you a story about how I came to manage my own funds.

It’s something everybody should learn to do, as it’s your money at stake. I learned the hard way to realize the importance of this, and by sharing my experience, I am hoping to save some of you a lot of money and emotional turmoil.

Before I joined John’s product and began working for his company, a lot of my funds were managed by an investment bank. (I did have and still do have a private personal portfolio I managed myself). I paid this bank $30,000 per year to manage my funds. This was pre-2008. I paid this for a couple of years but became quite suspicious of their tactics and processes when it became clear to me that they weren’t really investing the funds so I would make money in the long term, but rather were buying and selling the shares I owned several times a year, so they made brokerage commission from the entries and exits. So, as well as paying the bank for managing my funds they were also making money from me on the brokerage side. (My personal portfolio was unaffected by this as it was kept separate).

Just prior to the 2008 crash, I received a letter from the investment bank saying they planned to have me fully invested in the market by mid 2008. Call it intuition, but that made me feel very uncomfortable and unsettled, so I decided to visit the Sydney office of the investment bank and told them that I would no longer need their service. I was promptly given a few documents to sign and I then left their office very happily free of their clutches. From that day onwards, I have been the manager of my own funds.

I carefully went through all the stocks and bonds the investment bank had me invested in and made some immediate adjustments to the portfolio. I sold all the high-risk investments and made sure I had a balanced portfolio of good quality stocks in the financial, commodity, and property sectors. Though most of these stocks fell heavily in the 2008 crash. I was able to invest more into these stocks at a very cheap price as the companies sent share offers to customers to purchase more shares in early 2009 free of brokerage costs. I took up the opportunity on many of these share offers.

This investment bank had no clue that the 2008 crash was coming. They had all their clients fully invested at the time of the crash.

Investment bank marketing makes managing your own money look overwhelming and very difficult. Originally, I was presented with several glossy graphs and long-term growth projections and other written data that were neatly presented in ring binders with lots of colour photos and fancy financial language. At the time, it made me feel out of my depth, and I was convinced that I would need to take a financial degree to develop the knowledge needed to manage my funds. How could I be made to feel like this? I already had my MBA by then and yet this is how the “salesman” or so-called financial analyst of this investment bank made me feel at this time – completely bereft of any financial savvy at all. I fell for it at the beginning of my financial journey, but very quickly became wise to what was happening.

With my funds safely invested and regular consistent investments made, and my bank accounts in place, I began searching online for a quality financial advisor who would not charge an arm and a leg. I came across John Thomas, who originally worked under the umbrella of Macro Millionaire. I joined his product and watched him for a year or more before I did anything. He then ventured out as Mad Hedge Fund Trader creating his own product leaving the Macro Millionaire company behind. He was consistent with his profits, and he provided helpful education to the average investor or to those who wanted to get started. He was also accessible and eager to help. Furthermore, his background as a trader at Morgan Stanley gave me more confidence in his abilities and longevity. Many other investment letters at the time fell by the wayside as they couldn’t compete with John’s results.

What I have learned from John Thomas has been priceless.

Brokers exist to make money for themselves and their company.

Learn to trade how the professionals do and you will never have to work again.

Invest in yourself – in your financial education - and never doubt your ability.

Invest small amounts consistently to build a portfolio of stocks for the long term.

Wishing you all a wonderful weekend.

Be healthy, wealthy, and wise.

Cheers,

Jacquie

July 26, 2023

Jacque's Post

(TRADING/INVESTING FROM AUSTRALIA)

July 26, 2023

Hello everyone,

If you are an investor and trader, living in Australia can have some downsides.

The most obvious is the time difference between Australia and the U.S.

Many people attempt to stay up late at night and trade the market when it opens.

My suggestion is always the same. Don’t stay up at night.

You will simply burn out from doing this. Go to bed and get up early, so you can catch the period of time before the markets close. If you get up at 5 am, you will have time to see if there has been a trade alert sent and time to enter the trade on your platform.

And if your first entry order does not get taken straight away, change the price of your next order a little, so you can find where the market is.

If you are still having trouble getting your orders taken you can always change the strike price or the expiration time. This can make things a little easier.

If you are entering a LEAPS trade, you have the luxury of time here. From the time an alert goes out on a LEAPS trade you have a few weeks to enter the trade. This is because the movement on these trades day to day is usually quite small. The only exception to this would be a large movement in the stock market that lifted all sectors.

When building a portfolio of stocks, the rule is simple. Buy small parcels at regular intervals. So, for example, you could put aside $1000 to buy stocks every month. If you have more disposable capital to play with that’s great. Just be consistent and don’t let market movements or the news sway your decision-making. Buy small parcels of your chosen stocks or what I recommend near the close of the market. That’s usually when you get the better price because the high-frequency traders are dumping their stock/trades at the end of the day.

The Fed, Bank of Japan, and ECB run the markets this week. I would not be surprised to see a .25% interest rate rise by the Fed (but that’s just how I see it).

Going forward, we could see the NASDAQ move up another 1000 points or so to make a double top at around 16000 or thereabouts. Please see the chart below.

As I’m traveling this month, I won’t be able to hold my monthly Zoom meeting. However, I will be back on deck in August and look forward to seeing you then.

Wishing you all a great week.

Cheers,

Jacquie

July 24, 2023

Jacque's Post

(THE TRIALS AND TRIBULATIONS OF MIKE CANNON-BROOKES)

July 24, 2023

Hello everyone,

The week beginning Sunday 23rd is a big one for the markets.

It’s earnings season and Fed week all rolled into one.

Right now, investors are happy given the price action, which is based on signs of inflation abating and should lead the Fed to lowering rates down the road. In short, investors are finding it easy to celebrate headlines that talk about earnings beats.

Any signs of a dovish tilt in the Fed announcement will be quite favourable for stocks. Whereas any signs that they are sticking to their hawkish rate hike plans could be the spark for a 5-10% pullback.

Amidst all this financial backdrop, life is marching on.

Right now, it seems to be the season for a lot of high-profile separations in Australia. Andrew “Twiggy” Forrest of Fortescue Metals and his wife have announced their separation and just recently the Aussie tech billionaire Mike Cannon-Brookes has split from his wife of 13 years. The couple married in 2010 and have lived with their four children in a $12 m Fairwater home since 2019. Worth an estimated $19b, the Connecticut-born Cannon-Brookes rose to prominence after co-founding software company Atlassian in 2002.

Cannon-Brookes and co-founder Scott Farquhar have since been lauded as one of the greatest success stories in the Australian tech industry. In 2022, Cannon-Brookes invested in one of Australia’s largest renewable energy projects Sun Cable alongside billionaire Andrew Forest. The project, which involved a 120km2 solar and battery farm in the Northern Territory, went into voluntary administration in January 2023 after disputes amongst its backers as well as economic and engineering factors. However, in May this year, Cannon-Brookes rescued the company with an injection of funds. More recently, Atlassian has faced setbacks with the company slashing about 5% of its workforce, just months after a hiring blitz. This resulted in a drop in the share price and the wealth of Cannon-Brookes plummeting by about $7b.

Cannon-Brookes also faced criticism late last year due to Atlassian’s continued business ties with Russia following the invasion of Ukraine. In September, Cannon-Brookes and Farquhar wrote on the company’s website that “Atlassian stood with Ukraine”.

In addition to their business holdings, Cannon-Brookes and wife Annie also amassed a wide property portfolio. In June, the couple paid $14.25 million to buy a home in Newport on Sydney’s northern beaches. The property neighbours the $24.5 million estate they purchased in 2020.

It comes after the Cannon-Brookes joined several investors in buying Dunk Island on Queensland’s Great Barrier Reef in 2022.

Cannon-Brookes attended Cranbrook School before graduating from UNSW. He is the son of banking executive Mike Cannon-Brookes.

Cannon-Brookes and his wife Annie

Cannon-Brookes and Andrew “Twiggy” Forrest

July 21, 2023

Jacque's Post

(HOW TO INVEST IN RENEWABLE ENERGY)

July 21, 2023

Hello everyone,

Thank goodness the European heatwave did not also hit London. Temperatures were a balmy 23-24 degrees Celsius while I was there.

Many electric taxis now grace the roads in London. You must make a mental effort to watch for cars instead of listening for them, as with electric cars, you cannot hear them approaching.

And how will a lot of electricity (Including these electric cars) be fuelled in the future?

Renewable energies.

Solar and wind power generation is set to triple by 2030, according to a report from the Rocky Mountain Institute leading to a disruption in the global electricity sector. And with this disruption comes a promising renewable energy trade for investors.

According to Rocky Mountain Institute (RMI), solar and wind power will fuel 33% of electricity generation in 2030, up from 12% in 2022. Furthermore, the Institute predicts that solar energy, which is already the cheapest energy source in history, will halve in price by 2030, continuing the dramatic downward trajectory of solar and wind energy costs. The levelized cost of energy (LCOE) for solar and wind was around $40 per megawatt hour in the first half of 2023, as noted by (RMI), which is approximately half the cost of coal and gas.

Companies that are well-positioned to outperform from the rise of solar and wind energy production are shown below. Each of these companies secured a buy rating from 60% of analysts, and each has at least 30% upside to the average price target. In addition, they have been covered by at least seven analysts, and are listed on the NYSE or the NASDAQ.

Shares of Sunrun could surge more than 77%, according to the average price target on shares. Andrew Percoco, a Morgan Stanley analyst revealed that 64% of analysts covering the stock have issued a buy rating.

Maxeon shares have risen 68% in 2023 and could jump another 50%, per the average price target on shares. Percoco noted that the decline in solar panel market prices due to oversupply could pressure the company’s margins in 2024. However, it is worth noting that MAXN has largely locked in pricing for the remainder of 2023 and carved a niche with its premium DG (Distributed Generation) storage & energy. According to FactSet data, 71.4% of analysts covering the stock have issued it a buy rating.

Enjoy your weekend.

Cheers,

Jacquie

July 19, 2023

Jacque's Post

(MY TIME IN LONDON)

July 19, 2023

Hello everyone,

Alex and I made it to the U.K. He is busy catching up with friends and cousins while I get to continue working. Not much downtime when you work for John.

London is packed with tourists – it’s exhausting just walking down the sidewalks because the tourists and the English don’t seem to have any concept of walking on the right or the left, so you spend the time walking diagonally and trying not to run into people.

As I write this on Sunday, July 16, we are an hour away from the start of the Wimbledon men’s final. Djokovic vs Alcaraz. Personally, I would love to see a new name on the Wimbledon Cup.

There seems to be a lot of strike action everywhere. And it's typically done in the high tourist season. Southwestern Railways are striking on certain days this coming week and the tube is shutting down from the 23rd to the 29th of July. It will be a nightmare. But I’m sure the English black cabs will do well.

We also have the actors under the Screen Actors Guild (SAG) going on strike as well. Start date for their strike was July 13.

It seems AI is the reason for the strike by the actors. They are seeking some regulation and reassurance about its use in the world of film. I thought technology was supposed to improve things, not be totally disruptive. But it seems that is the effect of new and improved technology, and we must accept that some will fall by the wayside, while others will embrace future technology and adapt.

The Reserve Bank of Australia has a new Governor. We welcome Michele Bullock. Bullock – who has worked at the bank for four decades - will be the ninth governor of the central bank from September after the Labour government decided not to extend Philip Lowe’s tenure.

The Reserve Bank and the Treasury forecasts have inflation moderating in the coming months. Notably, they have a tick-up in unemployment.

In the future, the RBA will be cutting the number of meetings it holds annually to set interest rates, from 11 to eight.

Everything is expensive here in London. Prices have gone up so much since I lived here five years ago. Inflation is running at 8%. I see it moderating over the course of the next few years.

English people can’t afford to live in the city anymore. So, they are now traveling long distances to get to work in the city. Tube and train strikes – which happen on a regular occasion in the UK – further complicate matters for workers. This is why the trend to work from home has been embraced by city workers and those with a side hustle.

Have a wonderful week.

Take care.

Cheers,

Jacquie

July 17, 2023

Jacque's Post

(DINOSAUR SKELETONS ARE NOW CONSIDERED AN INVESTMENT)

July 17, 2023

Hello everyone,

Who would have thought that dinosaur skeletons would become a much-loved asset? We all know there are recent investment favourites like NFTs (non-fungible tokens), cryptocurrencies, cars, sporting cards, etc. And of course, there are the old favourites like art, wine, and stamps.

But collecting dinosaur artifacts is not a new phenomenon. The rich and famous have been dabbling in these investments for some time. Given global inflationary tendencies investors are looking for hard assets to protect their capital – and ideally achieve capital growth, too.

In the late 19th century, wealthy Wall Street financiers like Jean P Morgan and John D Rockefeller funded professional expeditions to unearth dinosaur fossils.

More recently – during the 2010s, Hollywood actors like Nicholas Cage and Leonardo DiCaprio publicly bid on dinosaur bones, which gave the sector a huge boost in visibility.

The go-to collector’s item for rich Asians is now a dinosaur skeleton which they show off in their living room.

The Covid pandemic was another boost to this asset class. Fossil hunting is something that is done out of doors and during the pandemic, this outdoor activity was one of only a handful of the things allowed, so fossil hunting grew in popularity.

In May 2022, a Deinonychus antirrhopus – a species that became one of the world’s most recognizable dinosaurs after the release of the movie “Jurassic Park” – sold for $12.4 million, with fees to an undisclosed buyer.

To show how prices have increased here are two examples. The first is a cave bear skull sold in New York for $4,750 in 2012. A similar skull was sold in 2022 bringing in well over $26,000 in Paris. Another example is a single T. rex tooth that sold for $11,250 in 2013. Nine years later, a similar tooth sold for nearly double the price. Even high-end replica skeletons are gaining popularity for those who cannot afford large original specimens.

Some important investment tips.

As with any investment, when looking into fossils big or small there are some general rules:

Do your homework. The more information you have about what is out there the better. Not all fossils are rare and there are any number of fakes. Sometimes items have been restored, substantially altered, or simply identified incorrectly.

Buy the best you can afford and don’t put all your eggs – especially dinosaur eggs – into one basket. Diversity is always a good investment plan.

Buy things with a proven track record and a clear chain of ownership. Though this won’t guarantee future success, it will give some guidance.

I will Wishing you all a great week.

Cheers,

Jacquie