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Douglas Davenport

QUBIT BY QUBIT

Mad Hedge AI

(IBM), (MSFT), (GOOG), (HON), (QBTS), (IONQ)

There's something oddly domestic about the scene at ETH Zürich's quantum lab, where a cluster of physicists are hovering over what looks like an elaborate microwave dinner plate. 

Except this particular plate costs roughly the same as a small yacht and might just revolutionize artificial intelligence as we know it.

These physicists just managed to create something called a “mechanical qubit” – the quantum computing equivalent of finally teaching a cat to fetch. 

And while most of us were busy arguing about whether our chatbots have feelings, these scientists might have just altered the future of AI.

Naturally, this required a pilgrimage to the holy grail of quantum computing: IBM's facility, where the air is colder than a penguin's lunch box and the machinery hums with the sort of expectant energy usually reserved for rocket launches.

A researcher – let's call him Dave, because that's his name – is trying to explain to me why this new mechanical qubit is such a big deal. 

"Traditional qubits are like temperamental opera singers," he says, adjusting his safety goggles. "They need perfect conditions, or everything falls apart. But these mechanical ones? They're more like street musicians – they can perform in less than ideal conditions."

The technical term for what makes these new qubits special is "piezoelectric material," which I've now attempted to pronounce correctly 17 times. The key idea here is that they're more stable than their predecessors. 

And here's where things get interesting for anyone with a stock portfolio and a passion for technological gambling (I mean, investing). 

The global quantum computing market, currently lounging at a modest $1.3 billion in 2024, is expected to bulk up to $5.3 billion by 2029. 

That's a 32.7% compound annual growth rate – the kind of numbers that make venture capitalists wake up in the middle of the night in a cold sweat of excitement.

Speaking of venture capitalists, they've been throwing money at quantum technology startups like sailors on shore leave – $2.35 billion in 2022 alone. 

In fact, global public investment has reached $42 billion, which is roughly the GDP of Brunei. And as expected, the usual tech suspects are all over this like ants at a picnic. 

IBM (IBM), which has more quantum computers than most people have coffee mugs, has developed something called Qiskit, which sounds like a Scandinavian breakfast cereal but is actually a quantum software development kit. 

Microsoft's (MSFT) Azure Quantum platform is bringing quantum computing to the clouds (not those clouds – the digital ones).

Meanwhile, Google's (GOOG) been strutting around since 2019 claiming "quantum supremacy," which sounds like a rejected Marvel movie title but actually means they did something really impressive with quantum computers that I'm told changed everything.

Then there's Honeywell (HON), which spun off its quantum division into something called Quantinuum, presumably because all the good quantum company names were taken. 

They're sharing the quantum playground with pure-play companies like IonQ (IONQ) and D-Wave Quantum Inc. (QBTS), the latter of which specializes in quantum annealing, which, contrary to what it sounds like, has nothing to do with heat therapy.

And here's where the quantum story gets interesting for anyone clutching their investment portfolio: these companies aren't just pushing scientific boundaries – they're pushing market valuations into what Dave calls “the twilight zone of growth.” 

We're talking about a jump from $239.4 million in 2023 to $3.9 billion by 2033. To put that in perspective, that's like turning a nice Honda Civic into a fleet of Lamborghinis in 10 years.

But before you sell your house to invest in quantum computing stocks, there's a catch. (Isn't there always?) 

The technology is still unpredictable. Technical barriers persist, commercialization timelines are fuzzy, and the ethical implications of super-powered AI remain debatable. 

Still, the academic paper mill churns on with impressive determination.

In 2022 alone, there were 1,589 quantum technology-related patents granted and 44,155 publications, which is either a sign of incredible progress or proof that a lot of physicists need to justify their research grants.

But while academics race to publish, investors face a more practical question: where to put their money? The safest bet might be the tech giants – your IBMs, Microsofts, and Alphabets.

They're like the aircraft carriers of the tech world: slow to turn, but hard to sink. 

The more adventurous might consider pure-play quantum companies like IonQ and D-Wave, though investing in these is a bit like betting on which butterfly's wingbeat will cause the next tornado. 

The potential payoff by 2040? A cool $850 billion. But remember, that's the same year we're supposed to have flying cars and robot butlers, so maybe keep some money in your savings account.

As I leave IBM's quantum facility, Dave tells me something that sticks: “Quantum computing isn't just about making computers faster – it's about solving problems we didn't even know we could solve.” 

I nod sagely, pretending I completely understand, while mentally calculating whether I should move my retirement fund into quantum computing stocks. 

The mechanical qubit might be microscopic, but like Max Planck discovering that the smallest units of energy could reshape physics, it's showing us that the tiniest technological advances might just revolutionize our financial futures. 

Just remember: even Einstein called quantum mechanics “spooky” – and that goes double for quantum investing.

https://www.madhedgefundtrader.com/wp-content/uploads/2024/11/Screenshot-2024-11-20-164005.png 422 742 Douglas Davenport https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Douglas Davenport2024-11-20 16:41:162024-11-20 16:41:44QUBIT BY QUBIT
april@madhedgefundtrader.com

November 20, 2024

Tech Letter

Mad Hedge Technology Letter
November 20, 2024
Fiat Lux

 

Featured Trade:

(THE FUTURE IS HERE)
(NO CODE)

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april@madhedgefundtrader.com

The Future Is Here

Tech Letter

The future is here.

No code or low code will bring a raft of new innovative tech companies to market, and we are in the early innings of this transformative development.

What is no code?

No-code is an approach to designing and using applications that requires zero coding or knowledge of programming languages.

This type of software hits us at a perfect time when the home office is beginning to become ubiquitous.  

The self-service movement that empowers business users will support the creation, manipulation, and employment of data-driven applications.

If we turn back the pages of history, companies needed an army of software programmers to develop even the measliest application.

That was then, and this is now.

Fast forward to today, and automated technology doesn’t only include cutting-edge industries like automotive cars but also software on laptops that can be rejigged by individual entrepreneurs.

That’s right, one person with no coding experience will be able to design, develop, and offer a real-life application with meaningful business value without the help of expert programmers.

The research data backs up my thesis with research firms projecting a 23% increase in the global market for this type of technology.

During the pandemic, low-code/no-code tools saw steady growth due to their effectiveness in addressing some of tech’s most complicated challenges.

The essential need to digitize workflows and enhance customer and employee experiences will be a boost to the efficiency of commercial and operational teams.

No-code platforms have evolved from just facilitating mundane tasks to making it possible for a broader range of business employees to truly own their automation and build new software applications with no coding while increasing organizational capacity.

A few risks that larger companies might consider is that even for remote developers building new applications, governance is paramount.

IT staff will need to install guardrails in place and have those built into low-code/no-code platforms to maintain consistent levels of security across the organization.

Cybersecurity solutions need to be integrated into this workflow by training every employee at the organization on security behavior and using compartmentalization and limited access to prevent opportunities for mistakes.

Hard landings are hard to recover from, and some can be crippling to the business model.

For no-code companies, harmonizing workflows is a key requirement for success.

In a low-code/no-code organization, departments should be able to work without silos and communicate freely across functions.

Elevated performance enabled by low-code/no-code tools will mean that the number of useful apps hurling toward the marketplace will be more and merrier than ever before.

Higher performance will no doubt usher in a new renaissance of efficiency and even better performance.

This also puts a 3 or even 4-day workweek squarely in play.

Many of the best tech minds in the world have supported the concept of working smarter instead of working harder.

A low code/no-code standard will allow for these achievements to take place.

The cratering of costs to start and run a tech firm is affected, too.

Deploying startup capital to pay for other expenses will make it easier for successful incubation.

This will ultimately mean that this new type of tech company will need to embrace the fusion of IT and business staff, empowering them with composable applications to speed up the time to market for new solutions.

Low-code/no-code APIs and other tools are enabling companies to integrate new applications into their existing tech stack in a more seamless manner with a lift-and-shift approach vs a rip-and-replace.

At the entrepreneur level, individuals will be able to harness the technology to build $100 million companies with a snap of the fingers when it wasn’t possible to do it before.

This is finally a chance for the little guy to recapture their moxie in the vast and sometimes overwhelming business world.

 

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april@madhedgefundtrader.com

Trade Alert - (BLK) November 20, 2024 - BUY

Trade Alert

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

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april@madhedgefundtrader.com

November 20, 2024 - Quote of the Day

Tech Letter

“Be a Unicorn in a Sea of Donkeys.” – Said Elon Musk

 

https://www.madhedgefundtrader.com/wp-content/uploads/2024/05/Elon.png 306 226 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-11-20 14:00:412024-11-20 14:20:39November 20, 2024 - Quote of the Day
april@madhedgefundtrader.com

November 20, 2024

Jacque's Post

 

(TRUMP’S GAME OF CHESS WITH RUSSIA)

 

November 20, 2024

 

Hello everyone

 

Trump, the dealmaker, will have to use all his “box of tricks” and then some to secure an end to the conflict between Ukraine & Russia.

 

 

Let’s remember it was Trump’s boast that he would end the war in a day.  We’re not there yet.

One thing is certain, and that is that President Zelensky will come under heavy pressure from the newly elected Trump administration to reach a settlement with Moscow. 

But what if Zelensky feels backed into a corner?  What will be his reaction? 

For those of us who live far away from the conflict zone, we may think that the impact of this war will be minimal on our life.  But, the outcome of the Ukraine conflict will have global consequences.  Even Australia won’t be immune. 

Let’s sit with this idea for a moment.  A Putin win will encourage his expansionist impulses in Asia, as well as Europe, strengthen the axis of autocrats, devitalize the democracies, and promote a deals-based order where the strong do what they will, and the rest of us roll with the fall-out as best we can.

How Trump, the dealmaker, behaves and acts regarding this conflict will be telling, as his actions will illustrate America’s international policy in a Trump-revived world.

It is probable that Trump’s actions will be more robust than Biden’s.  Biden provided enough weaponry to continue the war but not enough for the Ukrainians to fully exploit Russia’s weaknesses and gain the upper hand. 

Biden’s 11th-hour concession allowing Ukraine to strike Russia with long-range US missiles may be too little, too late.

So, what does Trump’s peace plan look like?

Kyiv will likely have to give up territory in exchange for US security assurances and European financial support for post-war reconstruction.  The current battle lines could become a border – a heavily fortified 1200km long demilitarised zone patrolled by a multinational peacekeeping force.

So, now Putin would be in control of 20 percent of Ukraine. 

What a heavy price to pay for that territory!

600,000 Russian soldiers were killed.

And economically, the war has been a debacle.

Russia’s strategic position has been weakened by the self-inflicted enlargement of NATO to include Sweden and Finland along its northwestern border.

Without US military support, it is hard to see Ukraine winning this war with Russia. Zelensky may find himself in a position where he must accept Trump’s plan since Europe is not willing or even able to fill the gap.    The EU couldn’t even provide the million 155mm artillery shells promised to Ukraine by March.

Getting Putin to agree might prove tricky for Trump.

Complicating the negotiations is the fact that North Korea’s “Storm Corps” are fighting on Russia’s side.  Now, we can see how this conflict seems to be gradually changing into a Eurasia-wide struggle for geopolitical ascendancy.

In this war, North Koreans serve a good tactical and political purpose for Putin.  They won’t change the course of the war.  But their involvement may deepen a sense of isolation Ukrainians feel as the axis forces work together to crush their resistance.  Europe’s support is softening, and under Trump, Americans are poised to bail out.

A bilateral defence pact signed in June between Russia and North Korea will see the hermit kingdom benefitting nicely. 

$200m for its troops and the provision of missile and satellite technology, as well as

700,000 tonnes of rice to feed the half-starved population.

Should South Korea begin arming Ukraine, this could destabilize the relationship with North Korea and easily ignite an Asia-wide conflict.  This would draw Australia into the war, as we have a historical commitment to the defense of South Korea.

How this plays out – nobody really knows. 

It has become a game of chess.

But one thing has become clear – democracies will need to grow a backbone, show some brawn, and match the defense spending and singlemindedness of the autocrats.  They play to win at all costs.  We need to up the ante and check them before they check mate us.

 

 

 

PORTFOLIO REVIEW

I would think about taking some profits from your gold stocks.  Most of you will be sitting on healthy profits – take some off the table.

(GDX), (AGQ), (WPM), (GOLD), (SLV)

QI CORNER

 

 

SOMETHING TO THINK ABOUT

 

 

 

 

Cheers

Jacquie

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april@madhedgefundtrader.com

November 20, 2024

Diary, Newsletter, Summary

Global Market Comments
November 20, 2024
Fiat Lux

 

Featured Trade:

(THE JOHN THOMAS BIOGRAPHY IS OUT)
(THE EIGHT WORST TRADES IN HISTORY)

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april@madhedgefundtrader.com

November 19, 2024

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 19, 2024
Fiat Lux

 

Featured Trade:

(HONEY, I SHRUNK THE MARKET CAP)

(ABBV), (BMY), (AVNX)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-11-19 12:02:072024-11-19 12:22:39November 19, 2024
april@madhedgefundtrader.com

Honey, I Shrunk The Market Cap

Biotech Letter

If you've ever wondered what $9 billion in disappointment looks like, ask the folks at AbbVie (ABBV). They've just learned the hard way that even the most promising psychiatric drugs can pull a vanishing act worthy of Houdini when it comes to clinical trials.

Their great hope, emraclidine – a name that sounds like it could either cure schizophrenia or clean your bathtub – recently face-planted in not one, but two Phase 2 trials.

Dr. Roopal Thakkar, AbbVie's Chief Scientific Officer, probably wishes this particular day came with a reset button, as the company's experimental once-daily pill performed with all the therapeutic punch of a sugar tablet in treating schizophrenia.

Somewhere, in a parallel universe, there's probably a version of Dr. Thakkar who didn't just watch $40 billion in market value evaporate faster than a teenager's allowance at a gaming convention.

Unfortunately, in our universe, AbbVie's stock took a 12.6% nosedive to $174.43.

But here's where it gets interesting, in that peculiar way that only Wall Street can manage. While AbbVie was having its very bad, no-good day, Bristol Myers Squibb (BMY) was practically dancing in the streets.

Their shares shot up 11% faster than you can say "competitive advantage." Why? Because their own schizophrenia drug, Cobenfy (another name that sounds like it came from the same random pharmaceutical name generator), just got the FDA's blessing.

Talk about impeccable timing.

Let's put this in perspective: We're talking about a global market worth $7.90 billion in 2023, projected to balloon to $11.35 billion by 2030. And it's not just about money.

The World Health Organization tells us there are 24 million people worldwide living with schizophrenia.

In the U.S. alone, it affects between 0.25% and 0.64% of adults, according to the National Institute of Mental Health. That's roughly the population of a small city, all waiting for better treatment options.

Meanwhile, other players in this high-stakes game are making moves that would impress a chess grandmaster.

Take Teva Pharmaceutical Industries (TEVA), busy cooking up a long-acting injectable version of olanzapine.

Or Alkermes plc (ALKS), sitting pretty with their $1.17 billion in revenue for 2022, thanks partly to their own injectable antipsychotic, Aristada.

Then there's H. Lundbeck A/S (HLBBF), the Danish company that spends 18% of its $2.7 billion revenue on R&D, like a scientist with an unlimited coffee budget.

And let's not forget the plucky underdog, Anavex Life Sciences Corp. (AVXL), burning through cash like a marathon runner through calories ($31.6 million in losses for 2022) while chasing their own psychiatric breakthrough.

Their compound, ANAVEX 3-71, sounds like a droid from Star Wars but might just be the next big thing in schizophrenia treatment. Or not.

That's the beauty and terror of biotech investing – you never quite know if you're backing the next breakthrough or the next spectacular failure.

AbbVie, thankfully, isn't exactly heading for the poorhouse. Their blockbuster drug Humira raked in $21 billion in 2022 alone – enough to buy everyone in New Zealand a really nice dinner.

The truth is, navigating the biotech market is less like following a recipe and more like trying to predict where lightning will strike while riding a unicycle.

So here's your biotech shopping list, served with a side of market reality.

AbbVie's spectacular face-plant has created a buying opportunity for the patient investor (that $21 billion Humira cushion makes for a soft landing).

Bristol Myers Squibb is strutting around with their fresh FDA approval like they own the place (and right now, they kind of do).

And if you're feeling particularly adventurous, Anavex Life Sciences offers a lottery ticket that might just pay off.

Whatever you choose, just remember to keep your antacids handy.

 

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april@madhedgefundtrader.com

Trade Alert - (VST) November 19, 2024 - BUY

Trade Alert

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

https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-11-19 11:11:592024-11-19 11:11:59Trade Alert - (VST) November 19, 2024 - BUY
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