Tuesday morning
February 7, 2023

Good morning/afternoon

Chairman Powell has just spoken, and the market liked what he had to say.

He said, “The disinflationary process, the process of getting inflation down, has begun…”

This was enough to rally the market, tank the dollar, rally Gold and Oil and crypto.

The forecast is that it will take well into 2024 to get inflation down to 2% - the target eyed by the Fed.

Zoom has become the next tech company to lay off thousands of employees. 15% of its workforce or 1,300 people will be laid off soon. But don’t expect these people to be found in the unemployment lines. Tech hiring is still on fire in the U.S. and most of these employees will be swallowed up by new start-ups and other burgeoning ventures, else these employees will work from home on their own businesses.

A tech stock that should be in everyone’s portfolio is Tesla. Ron Baron, who runs one of the best performing funds, says Tesla could hit $1,500 a share by 2030. But we don’t need Baron to tell us that when John echoes those targets all the time. Bull-call spreads, buy the stock, buy the LEAP – John has been begging you for years to take the step and pull the trigger on this stock or trade. Just buy small parcels of the stock on dips, and put it in your bottom drawer and leave it.

Baron’s fund includes a 30% portfolio weighting in Tesla, the biggest holding in his portfolio. The fund has notched up a five-year total return of 26.5% on an annualized basis and 10-year return of 20.9% making it the top performing U.S. equity fund over the long term, according to Morningstar.

Baron started investing in Tesla in 2014, when the company was rolling out 31,000 cars a year …but Barron thinks 20 million cars could be reached by 2030.

Baron called Tesla “the safest car ever built in the world”; he believes that producing a lower cost model will make the company worth seven to 10 times more in the future.

Barron also speaks highly of Musk’s SpaceX company. He explains that “it used to cost you $100 million to get to space, $200 million more for a satellite. For us to get to space now, it costs…we can use a rocket over and over and over again …$20 million, its’ about to cost $6 million. The cost to get to space is going to be nothing.”

He goes on to say that the satellite as the backbone for the internet is an investing opportunity worth a trillion and a half dollars.

Mimic Baron - don’t worry about the volatility. Let your view be long term.
And mimic John too – dance via trades with the volatility – use it to your advantage. That way you won’t see yourself a victim of it.

You won’t get it right all the time, but that’s the price you pay of doing this business.

Another asset to hold is cash. If it is burning a hole in your wallet, put it into 90-day Treasury bills or 6-month Treasury bills. Last I looked they were earning 4.5%.

Wow! What a spike that was.
The Nasdaq spiked up to 12710 and has cratered back down 12460 in a 30-minute period.
The Fed speak will do it every time.

Book Recommendation: Thinking, Fast and Slow by Daniel Kahneman. An eye-opening insight into why we make the choices we make. It will change the way you think and the way you see yourself.

Happy mid-week. Celebrate life – Cheers Jacque

Tuesday morning
January 31, 2023

Good morning/afternoon,

It’s the day before the Fed meeting. What does John think will happen?

A 0.25% rate move.

But the press conference after the numbers hit will be the real mover of markets. The Fed will probably indicate in its special way that more hikes are on the way and will be for quite some time. In other words, the rate hikes will stretch out longer than most were expecting.

How will the market react?

A big gulp during/after the Fed commentary and then maybe take the lift down instead of the stairs.

To prepare for that scenario, John has doubled up on his Tesla short position.

He has just sent out this trade this morning:

TSLA February 2023 $210-$220 in the money vertical bear put spread at $9.10 or best.

Weighting: 10%

No of Contracts: 12

Here are the specific trades you need to execute this position:

Buy 12 February 2023 (TSLA) $220 puts at……..........….…$48.00
Sell short 12 February 2023 (TSLA) $210 puts at….......….$38.90
Net cost:………………………….……….…........................…………$9.10

Potential Profit: $10.00 - $9.10 = $0.90
(12 X 100 X $1.10) = $1,080, or 9.89% in 13 trading days.

John also sent out a bear put spread on TSLA on Monday. A February 2023 $220-$230 in the money bear put spread. So, if you already have this trade and you add the most recent then you have a bear put spread twice the size.

Of course, please only use a suitable number of contracts relative to your capital base in your brokerage account.

Worth a read:
The San Francisco Fallacy: The Ten Fallacies that make Founders Fail by Jonathon Siegal.

Many books on entrepreneurship talk about what to look for and what to look out for. But they don’t focus on failures and how those failures can ultimately lead to success. This is a great book, story well told – a real page turner. The San Francisco Fallacy refers to the herd mentality in thinking that the enormously expensive Silicon Valley area is necessarily the place to go for tech start-ups.

So, while we’re waiting for the Fed announcement, grab a tea and a book and put your limit orders in. Or go for a walk/bike ride and listen to a book on Audible. Can you digest stock market knowledge while negotiating windy roads and hills?

Enjoy the day.

Cheers,

Jacque

"I may be drunk, Miss, but in the morning, I will be sober, and you will still be ugly." - Winston Churchill

Thursday evening
January 26, 2023

Hello everyone,

This post will be a summary of John’s recent webinar entitled: “Where’s the Bear?”

Luncheons: Honolulu February 17, 2023

Seminar at Sea July 13, 2023
+++++++++++++++++++++++++++++++++++++++

John’s Positions:

20.65% January, 80% cash, 10% long and 10% short

OXY 55-60 call spread
QQQ 305-315 put spread

Expiration Value: 23.79%

107.27% Trailing one-year return

47.22% Average Annualized return

LEAPS on Rivian but be conservative.

The market is pricing in a 25-basis point rate hike on Feb 1.

Energy – new lows on Russian military failures, warm weather, and a supply glut. Only a Chinese post-Covid recovery can save it.

Gold and Silver deliver upside breakouts, which should continue.

2023 could be the year of the commodities.

John says the U.S.$ has topped and will be weak for a decade.

Look for the S&P 500 at $4,800 by end of 2023.

VIX dives to $18 = No Trade

The main focus of John’s service is front-month trading. And holding cash when there are no trades. He teaches us that it is more valuable knowing when not to trade than when to trade.

According to a new model by JP Morgan Bank, there is a 73% chance of a recession.

Tech layoffs top 70,000 or 2% of workforce. But most tech layoffs aren’t being reported. (They go on to another job or work from home or from anywhere in the world doing side hustles).

Inflation to drop 5% in a year, according to a survey taken by the New York Fed.

If you have cash that is not in your brokerage account or invested, buy 90-day T-bills.

TSLA @ 125 is a good option trade and a good LEAP.

TSLA is the most traded stock in the market. And the most traded option in the market.

RIVN – great LEAP candidate 40-50 or 45-50. Go two years out.

NVDA – buy at 160.

Did you know – there are Russian submarines 30-40 miles off the East and West American coasts with nuclear weapons, which could wipe New York out in a second?

(What a comforting thought).

BRKB – $400 target.

Keep buying TLT calls, call spreads, and LEAPS on dips.

Junk Bonds ETF’s (JNK) & (HYG).

Treasury Secretary warns of coming US Bond Default, runs out of money by June capping price for foreseeable future.

OXY – 50-55 spread.

AAPL – sell 160 calls – keep doing every month until you are hit. This is just a suggestion.

Currencies: Buy FXE, FXA, FXB, FXY.

M1 Tank Battalion going to Ukraine. Will stretch out the war. Russia’s tanks are no match for Western tanks.

CEW – Emerging markets should have growth of 40%.

Precious Metals
Australian Precious Exports Soar. Shipments topped $9 billion in November. 20% higher than the most optimistic forecasts.

Buy Copper (FCX), Aluminium (AA), Iron Ore (BHP, Gold (GLD), & Silver (SLV) on dips.

Crypto loses it shine to Gold. Buy GLD, GDX, GOLD on dips.
That’s all for now.

Have a brilliant weekend.

Have fun.

Cheers

Jacque

Always be looking forward. You can never plan the future by the past.

To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment. Ralph Waldo Emerson.

Sunday afternoon
January 22, 2023

Hello everyone,

Hope you all had a terrific weekend and make the most of the final few days of January. Can’t believe it’s already February next week.

A busy earnings week is coming up. Tesla, Microsoft, and Boeing have their numbers out this week. Maybe good news here will kick the market higher. And we also have the Fed policy meeting next week. The consensus seems to be a 0.25 or 0.50% interest rate move. We shall see.

Has anyone seen ‘Avatar: The Way of Water’? It’s become the third James Cameron movie to gross $2 billion. It doesn’t appeal to everyone. Not my cup of tea. All the technology seems to be the big drawcard and the storyline, which paints the U.S. military in a poor light.

Another mass shooting in the U.S. This time in Monterey Park in Los Angeles. 10 people lost their lives, and the gunmen killed himself as well. Before anything is ever done about guns in America, a lot of people will have to die. But mentally ill people having access to guns is extreme, to say the least.

And something else that is utterly outrageous is the fact that women do not have control over their own bodies. There are some states in the U.S. that ban women from having abortions even though their own life may be in danger. There are other states that ban women from having an abortion if the baby is deformed in any way or if the baby is the result of rape or incest. Women are very much controlled by the political system, which won’t be changing in a hurry in the near future.

Fingers crossed that the earnings this week are good.

Have a great week.

P.S. It is John’s birthday on Thursday, 26th January (Australia Day). 71 years young. Drop him a line and wish him well. He would appreciate it.

Cheers,

Jacque

If you change the way you look at things, the things you look at change. Wayne Dyer.

Sunday
January 15, 2023

Hello everyone,

I trust you had a great weekend.

It’s Martin Luther King Day on Monday, January 16 – a public holiday.

John – up 19.83% in January.

Reason: go long when everyone else is terrified to do it – as in January.

Go short – in December – when everyone was jabbering on about a Christmas rally.

And there you have it – end of narrative.

Looks like stocks will continue to party until around early to mid-February. So, 4,300-4,330 S&P are targets. If these are broken, then look for 4750.

Gold and Silver will continue to rally for the time being. For those chart analysis fanatics – it’s all in the picture – the rally could go up to make a third point on the Daily Gold chart. (GOLD, GLD, SLV).

To keep on the right path, keep picking up those bond positions – (TLT, MUB, JNK, & HYG) – a must-have in a falling interest rate environment.

A weaker US$ is on the cards. Commodities do well here – (FCX) and (BHP). Don’t forget about emerging markets either (EEM). The Euro, Pound, Aussie, and Yen will all do well here.

Real estate - apparently, it’s going to be strong for around the next 10 years. Does anybody have an argument against investing in bricks & mortar – especially your own home – in this environment? You just have to look at the lines of people queueing up to look at a one-room flat in a town in New South Wales to understand which side of the fence is best to be on – owner or renter?

Appalling situation – and I know that Airbnb is contributing to the squeeze in housing availability. As many as 135 properties in a northern New South Wales town are unavailable to rent because they are an Airbnb property. Consequently, there are only two properties available in this town.

Some owners have raised rents as much as $125/week to take advantage of the gravy train. Shame on those owners who see occupants forced to leave – sometimes, long-term renters – because they cannot pay the huge amount of extra dollars. I understand owners may be feeling it too with extra costs, but there must be a happy medium somewhere.

The U.S. will hit the debt limit on Thursday. Yellen has told McCarthy that he needs to either suspend or increase the debt limit. If the House Speaker doesn’t step up, the consequences would be dire for the U.S. economy & the livelihoods of all Americans, and global financial stability. Haven’t we been in this situation before?

Food fraud – do you know what it is?

Olive Oil – switched for cheap ones.
Parmesan Cheese – switched with something else.
Counterfeit, dilutions, substitutions, and mislabelling is the name of the game in the food industry now. It seems anytime a product can be passed off with a cheaper alternative, it will be.
Food fraud not only harms consumers’ wallets, but it also puts our health and safety at risk.

So much of food fraud is hidden from us and has been for centuries. It affects at least 1% of the global food industry at a cost of around $40 billion a year, according to the Food & Drug Administration.

It is estimated that 10% of the commercially available food in the United States is adulterated. That’s 1 in 10. So, expect to have something in your supermarket cart when you leave the checkout.

How does this happen?
It’s Economically Motivated Adulteration (EMB). It’s a monetary impact to the food consumer and to the manufacturer, but it’s also a public safety issue, robs people of nutrients and can kill people.

Recommended Reading
Real Food, Fake Food by Larry Olmsted
(2016)

The Jungle by Upton Sinclair

The worst offenders can include seafood, meat, dairy, alcohol, spices, and honey, to name a few. It happens more often with expensive foods.

40 million people a year in the U.S. get sick from what they eat – which you could say is unintentional, but also fraudulent. The cause usually stays undiscovered.

The coffee you buy will pass through a lot of middlemen before it hits the shelves of your supermarket, etc. One of these middlemen could be adding something to the coffee for economic gain. Who would know?

During the pandemic, 21% of fraud incidents recorded in 2021 were labeled fraud. Anyone for cellulose derived from wood pulp added to their parmesan cheese. It’s happened.

We have plenty on our plate today. Sorry for the pun.

Looks like we will have to be more conscientious at reading labels and info about companies and suppliers.

Wishing you a fabulous week.

Cheers,

Jacque

“Out of the mountain of despair, a stone of hope.” - Martin Luther King, Jr.