Thursday, 10th November 2022

 

Hello everyone,

Hope you are all doing wonderfully well.

First, let’s be thankful on Remembrance Day.

There is a lot to get through today, so let’s get straight to it.

John has updated his Long-Term portfolio.

Here it is in a nutshell:

ASSET CLASS

Energy 0%

Biotech & Pharmaceuticals 20%
Bristol Myers (BMY) 5%
Amgen (AMGN) 5%
Eli Lilly (LLY) 10%

Technology
Google (GOOGL) 5%
Apple (AAPL) 5%
Amazon (AMZN) 5%
Square (SQ) 0%

Banks 20%
JP Morgan Chase (JPM) 5%
Bank of America (BAC) 5%
Morgan Stanley (MS) 5%
Goldman Sachs (GS) 5%

International (Long Countries)
Alibaba (BABA) 0%
iShares MSCI Emerging Market ETF (EEM) 10%

Bonds
(SPDR) Barclays High Yield Bond ETF (JNK) 15%

Foreign Exchange
Aussie$ (FXA) 10%

Commodities
Freeport McMoran (FCX) 5%

Precious Metals
iShares Silver Trust (SLV) 5%

Agriculture 0%

==========================================================

ENERGY 0%
Healthcare 20%
Technology 15%
Banks 20%
International 10%
Bonds 15%
Forex 10%
Commodities 5%
Precious metals 5%
Agriculture 0%
Total 100%

Items in red have either been added or deleted recently.

Print this out and stick it on your fridge or on the wall in your office. It will remind you where to park your funds when we have a good entry point. We have had plenty of them recently.

Market rallies 1200 points today as light inflation data hits the airwaves. Even a sniff of lower inflation will get the market feeling jolly. But we can’t break out the champagne yet, I’m afraid. There are still challenges ahead.

It’s all gloom and doom in the house of FTX. There is a litany of reasons this company fell down the well. No board of directors, very poor management, in fact, no real management. Just a hope-for-the-best attitude thinking there would always be an endless pit of funds for anything and everything. Trading could be halted within days. At the time I am writing these withdrawals are still open. Binance offered to help in the bailout, but then quickly thought better of it. FTX has an $8 billion hole. No one would want to touch that in their right mind! Expect more regulation of crypto companies going forward after this mess. And expect cryptos to continue falling before the dust settles.

Next week, I will summarize John’s newsletter which looks at Ten Trends to Bet the Ranch On.

Have a fabulous weekend.

Cheers,

Jacque

P.S. Don’t forget to subscribe to my Post on John’s site. Complimentary period has ended.

If you set goals ridiculously high and it’s a failure, you will fail above everyone else’s success. - James Cameron

 

Sunday morning
November 6, 2022

Hello everyone,

I trust your weekend was a good one.

John’s heading for the start of the week: The Fed Giveth and the Fed Taketh Away.

In other words, welcome to volatility, which will be with us for quite some time.

Another .75% rate hike is on the cards in December.

After that, John thinks we may start to see lower rate hikes, but there are no guarantees here.

Going into the mid-term elections, John is now in a 100% cash position. We also have the Consumer Price Index on Thursday.

A great buying opportunity is setting up in the months ahead.

Financials and Healthcare have been doing well, but technology has lagged.

Technology is for the long term – it may be under the weather for months or years, but it always comes back, as John reminds us, so don’t wipe it completely from your portfolios.

Apple has gone on a hiring freeze. Other names in this sector will follow suit. The winter season in tech will bite workers as the Fed hits the rate rise button.

The Fed is targeting a 2% inflation rate. Listen to the language around the next hike to see if we are closer to lower rate hikes soon.

What’s happening in Twitter Kingdom.

Staff have left or been sacked.

Advertisers have abandoned the social media site.

Conspiracy theories have been front and center on the platform, which creates traffic.

Twitter will launch a new subscription service – Twitter Blue. You will pay $7.99 per month.

Updates are listed as available for users in the U.S., Canada, Australia, the UK, and New Zealand.

Japan spends $42 billion to support the Yen. It didn’t work. The Yen will remain weak so long as interest rates remain near zero.

The Russian economy is shrinking as sanctions continue to take their toll. Convicted criminals are now being called up to fight in the war against Ukraine.

John’s stories from his personal life are always interesting. Here is another.

In 1971, John worked for an LA County Coroner, Thomas Noguchi. He was known as the “coroner to the stars” having famously done autopsies on Marilyn Monroe and Jane Mansfield. John did the night shift and there was free housing at the coroner’s department. The work was not for the faint of heart. In one job John writes about, he and his co-worker were asked to go and pick up a 300-pound man who had died of a heart attack and had been undiscovered in his home for a month. As John describes, they each grabbed an arm and a leg and went to move the person on the count of three. On doing so, however, all limbs were severed from the deceased body. When John asked for gloves for health and safety reasons, he was fired.

What an interesting attitude to workers some companies have!!

Wishing you all a fantastic week.

Cheers,

Jacque

"If you cannot do great things, do small things in a great way, " says Napoleon Hill

 

Hello everyone,

It was .25% points rise in Australia on Tuesday by the RBA.

What will it be on Wednesday by the Fed?  .75% or .50%

The market is treading water today waiting for the announcement and the press conference.   

The job market is still hot with job openings surging in September, despite the Fed’s efforts to cool the market.

So, we just must wait.

Continuing from where I left off on the story about climate change and what our future will look like.

Let’s think about Africa for a moment.

Droughts and heat waves and thriving economically are just not a match anywhere.  According to the African Development Bank, the continent is already losing up to 15% of its economic growth because of climate change.  

At just over one degree of temperature rise, climate change may already have worsened global income inequality by as much as 25%.

It will become increasingly dangerous to work outside in the hottest part of the day.   Many residents will be trapped indoors because of the heat.  Governments may introduce policies related to outdoor labor as the world gets hotter.  

When I worked as a jillaroo in outback Australia, both jackaroos and jillaroos started at around 4am in the morning in peak summer months, rested in shade or inside during the heat of the day, and then worked again from about 3-4pm up until 9:00pm.  It was the only safe way to do the work in the heat. 

 

And what about our reefs?

In the new world, there will probably be zero living coral reefs.

This will have far-reaching effects.

Food harvested directly from corals supplies protein for hundreds of millions of people today.  And maybe a quarter of all global ocean biodiversity depends on reefs, all of which are believed to be imminently endangered.

The world’s oceans will grow more acidic which will affect the marine food chain.

 

How high will sea levels rise?

Greenland contains enough ice to raise sea levels by more than 20 feet.  And the Antarctic would raise them considerably more than that.  But we won’t see a lot of that this century.  Already tens of billions of tons of ice are melting into the oceans every year but given the size of the planet, the rate feels slow.  

There is one thing we do know and that is that the sea levels will continue to rise – forever.

 

Our food

At two degrees of warming, yield declines are expected for most staple crops.  Some are estimating that 40% of today’s cropland is expected to experience severe drought at least three months a year by 2050.

These challenges will bring about new seeds, new fertilizer, and new farming methods.

 

Weather disasters

More intense, more frequent.

…over a third of the world’s population would be hit with severe heat waves once every five years. (NYT)

None of us will ever forget the 2019-2020 Australian bushfires, which killed approximately three billion animals.  Do you remember the effect of the smoke over Sydney?

 

Ferries couldn’t run

Fire alarms in office buildings were continually set off by the smoke

It was a health hazard to walk outside.

The NYT reports that in India, there could be 30 times as many severe heat waves as today lasting five times as long on average.

Solar and wind power will be the energy of the future.  But other forms of energy could also be possible.  Think about green hydrogen, geothermal or next generation nuclear.

Battery technology will be updated and modernized.

The demand for Lithium could possibly grow eightfold by 2030.

There are projects planned for drilling for minerals at the deepest parts of the ocean floor, and China is even thinking about sourcing elements from the moon. 

A quarter of a million people could die annually from climate-related causes.

The climate impacts are only half the story.  The other half will be told by our response to climate change.  We won’t stop the constant climate crises in our world now, but how we manage them and build a future around them will be critically important.

Cheers,

Jacque

 

Learning never exhausts the mind.

Leonardo da Vinci

 

Hello everyone.

Well, he’s finally done it! Musk now owns Twitter and has already set about the cleansing process by firing the CEO and other top executives. Apparently, he also has the intention of cleaning up the content of Twitter. Musk has updated his Twitter description to “Chief Twit.”

Musk tells us the reason he bought Twitter is because it is “important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.  He went on to say in his tweet that “there is currently great danger that social media will splinter into the far right-wing and far left-wing echo chambers that generate more hate and divide our society.”

Musk added that he did not buy Twitter “to make more money. I did it to try to help humanity, whom I love.”

Musk says that Twitter must be “warm and welcoming to all….”

 

In reporting season, Amazon disappoints.

Third quarter results were reported today, and they missed analysts’ estimates.   The forecast is for a disappointing fourth quarter too.  The macroeconomic headwinds - inflation, high interest rates, etc, - have resulted in a slowdown in Amazon’s core retail business as consumers returned to shopping in stores.   This does not bode well for the holiday shopping season coming up.  According to Adobe, online sales are expected to grow just 2.5%.

But Apple was solid and remains a stock to own.  Revenue rose 8% year-over-year to $90.1 billion, exceeding expectations of $88.9 billion and marking a September quarter record.  Earnings of $1.29 per share came in ahead of the consensus $1.27. 

 

Could there be a turnaround in Treasury Bonds in 2023?

Two and half centuries of market history tell us that this is a possibility.  

Bonds have been crushed this year.  2022 has been part of a two-year losing streak which hasn’t happened since 1958-59.  The bond ETF, the $24 billion iShares 20+ Year Treasury Bond (TLT) fund is down more than 34% year to date and about 38% from where it started in 2021.  By comparison, the S&P 500 is down just 18%, which is considerably better than the bond market returns.

John has stopped sending bear put spread trade alerts on the TLT.  He thinks the rich uncle has paid his dues.  Clients/subscribers have made a small fortune trading the TLT in the last couple of years just by following John’s trade alerts.

Bank of America explains that the last time Treasuries fell more than 5% and were negative the following year happened in 1861.  And interestingly, the last time government bonds posted negative returns for three straight years?  Never.

As Bank of America points out 250 years of history is something we should all heed.  Keep your eye on bonds in 2023 and wait for those trade alerts from John.

 

Nancy Pelosi’s husband assaulted

The assailant broke into their San Francisco home early Friday morning reportedly looked for the speaker – Nancy Pelosi.  Paul Pelosi was taken to hospital and is expected to make a full recovery.    Police arrested David Depape and he will be charged with attempted homicide, assault with a deadly weapon, elder abuse and burglary.

For my Australian readers, what do you miss about Australia when you go overseas for a holiday or for work?

For those readers, who are not from Australia, I ask you the same question.  What do you miss most about your own country when you travel away from home?

Have a great weekend.

Cheers,

Jacque

 

Believe you can and you’re halfway there.

Theodore Roosevelt

Hello everyone,

A very good day to you all

First, let’s welcome our new members:

Martha Ellis
Kumar Dant
Elizabeth Anthony
Kayode Olagnuju
Wf Mide
Casey Riggs

I hope I haven’t missed anybody out.

This post will summarize John’s bi-weekly webinar, which was done yesterday.

John called the webinar:  Whiplash Market (and hasn’t it been just that)

In 2022 YTD John is up 75.88%.

His trailing one-year return is 78.54%

His average annualized return is 44.23%

John says the Bottom is in. (We will bounce around in ranges from here on until the bull market takes off).

• Midterm election noise is about to depart from the news
• We are 9 months into a 12–18-month bear market
• Oil prices continue to fall
• Inflation is plunging – may not show up until later in the year
• Bear market in bonds may be ending with the 10-year rates topping 4.00%
• VIX pops to $35

The global economy is recessionary.

PPI – comes in hot at 0.4% in September.

Non-Farm Payrolls falls short 263,000 in September

JP Morgan sees recession in 6-9 months’ time according to CEO Jamie Diamond.

Supply chain problems are disappearing as two years of port congestion ease.

Unemployment rate 3.5% = 2022 low. 

IT’S TIME TO INVEST

Capitulation is near
Sweet spot for LEAPs setting up. (Only get this opportunity 2 to 3 times in a decade) GRAB IT!!!
Look for a strong 2^nd half-scenario to continue

Junk Bonds might find a place on John’s list soon.

HYG = 8.2% yield to date

U.S.$ will start to top out around here.  Maybe one last dash to the top before exhaustion.  Then you can buy the Euro, the Aussie, and the Pound as the U.S.$ falls.  (Please don’t do this in the forex market unless you know what you are doing)

LEAP candidates are numerous.

Look at Netflix

ROM

NVDA

TSLA

BRKB

But don’t expect these to go up in a straight line.  Put the expiry in 2025. 

Bull markets start 6-9 months before a recessionary environment ends.

John also mentioned Snowflake as a stock to put on your list.

U.K. Prime Minister, Liz Truss, is out.  She has resigned.  She lasted 45 days – the shortest tenure of a Prime Minister ever.  So, Britain is on the hunt for its next leader.  There is a lot to fix in this county.

Does anyone remember Yes, Minister, the TV series about the minister and how he was controlled by his aides

about what he said and didn’t say,
about what he knew and didn’t know,
about what he could do and not do,
and which areas he should dabble in and not dabble in.

It seems that Liz did not have enough quality aides with the necessary knowledge to direct her properly. And was Liz listening well?  It seems there were failures all round.

Rental stress is still a thing in Australia.  It is now cheaper to buy a house than rent.  People with mortgages are passing on the extra cost to their tenants.  The great shift is still going on.  People are moving to the regional areas to secure cheaper housing.  Small-town neighbourhoods – once thought of as no-go zones are being gentrified.  Businesses are moving in and changing the whole environment.  House prices are starting to come down. 

Wishing you all a wonderful weekend.

Take care.

Cheers,
Jacque

Life’s most persistent and urgent question is, "What are you doing for others?"

  -- Martin Luther King, Jr.