Global Market Comments
November 6, 2023
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or VINDICATION WEEK)
(SPY), (QQQ), (IWM), (NVDA), (BRK/B), (TLT)
It was truly vindication week for the bulls. All major Indexes clocked their best week of the year
The patience was rewarded. The S&P 500 (SPY) gained an impressive 6.09%, the NASDAQ ETF (QQQ) 7.35%, and the small-cap Russell 2000 (IWM) 8.64%. A recent favorite of mine, mortgage REIT lender Anally Capital Management (NLY) soared by an amazing 21%
Better yet, all of my Mad Hedge forecasts came true. Big tech led the charge, with our long in NVIDIA (NVDA) up a gob-smacking 16.67%. Another long in Berkshire Hathaway (BRK/B) gained 7.5%. And our long in US Treasury bonds (TLT) picked up a welcome $6.00, dropping ten-year yield from 5.0% to 4.52%.
The 60/40 stock and bond/portfolio came back with a vengeance. This time, everything went up.
The harder I work, the luckier I get.
The markets accomplished these feats against a geopolitical background that couldn’t be worse. The Gaza War is lurching from one tragedy to the next. The Ukraine War grinds on (but without me). Saber rattling continues in China.
It just goes to show how far out on a limb the shorts had gotten and the extent of buying demand that was pent up.
It all sets up a nice year-end rally. We may not reach the $4,800 target I expected at the beginning of 2023. But a $4,600 hit is within range. Don’t expect a straight line move there. The world is still a pretty unsettled place. It's definitely going to be a stock pickers market (NVDA), (BRK/B), and (TLT) and not an index one.
Particularly fascinating is how Berkshire Hathaway absolutely Knocked it Out of the Park, with a 41% gain in operating earnings from companies like BNSF Railroad, Geico, and Precision Castparts. But Warren Buffet was noted in his weekend earnings report more from what he didn’t own than what he did.
The Oracle of Omaha unloaded $5 billion worth of global stocks in Q3, taking his cash position up to a record $157 billion. He can now earn a staggering $8.6 billion in interest in the coming year. His explanation is that stocks never really got cheap this year and high rates were just too attractive. Keep buying (BRK/B) on dips. And buy the things he buys.
And with the number of new investment opportunities and sectors to chase that almost can’t be counted, I will prompt you to look at some oldies buy goodies.
PC stocks are back in play, namely Dell Computer (DELL) and Hewlett Packard (HPQ). How about those for a blast from the past? I think it’s been 30 years since I touched these legacy tech companies.
The fact is that AI is rapidly moving downstream as far down as your humble PC, which in the meantime has gotten cheaper and much more powerful. PCs are now the dumb end of a link that can access the AI superheroes of the day, like ChatGPT. It’s a lot like the old Quotron used to be the access point to the New York Stock Exchange mainframes for current price information.
Dell shares have already outperformed, up 57% in just six months, while HP is just getting started. You might take a look.
So far in November, we are up +1.97%. My 2023 year-to-date performance is still at an eye-popping +68.15%. The S&P 500 (SPY) is up +14.21% so far in 2023. My trailing one-year return reached +75.21% versus +25.62% for the S&P 500.
That brings my 15-year total return to +665.34%. My average annualized return has rocketed to +50.85%, another new high, some 2.61 times the S&P 500 over the same period. I am at maximum profit on all positions and am looking to add more on a dip.
Some 47 of my 52 trades this year have been profitable.
Fed Leaves Rates Unchanged. It’s not the end of high rates, nor the end of the beginning, but the beginning of the end. Powell may contemplate actual rate CUTS in six months, driven by the certain slowing of growth and inflation in the current quarter. Markets will start discounting that now as seen by the 30-basis point back off in rates this week. No surprise then that there is a short covering buying panic across the entire fixed income front today.
Palantir Rockets on New AI Demand, up 20% at the opening, even though its substantial government business slowed. The company announced the fourth consecutive quarter of profitability and highest earnings since its founding 20 years ago. The Denver-based data analysis company said Thursday it expects 2023 revenue of about $2.22 billion. Buy (PLTR) on dips.
Buying Panic Hits All Fixed Income Markets, with falling Fed interest rates appearing on the distant horizon. (TLT) is up $1.60, (JNK) $0.80, and (NLY) REITS up $0.45. This could be the trade of the decade, with (TLT) targeting $110 by early 2024.
Homebuyers are Pouring into ARMs, or adjustable-rate mortgages, shunning 30-year fixed rates at a mind-numbing 8.0%. ARMs could be had at 6.77% last week. Overall, mortgage applications are down 22% YOY.
Panasonic Says EV Demand is Sluggish, taking Tesla Shares down 5%, and off 35% from the recent high. Elon Musk says the Cybertruck will take a year to 18 months before it is a significant positive cash flow contributor. Full disclosure: I am on the waiting list. The Street expects Tesla to hit 2.3 million vehicle deliveries next year, an increase of about 500,000 year over year. Buy (TSLA) on dips.
Bank of Japan Eases Grip on Bond Yields, ending its unlimited buying operation to keep interest rates down. Japan is the last country to allow rates to rise. Expect the Japanese yen to take off like a rocket.
Hedge Fund Pour into Uranium, as the nuclear renaissance gains steam. Prices have gained 125% in three years. The International Energy Agency says demand will double by 2050. There are 440 nuclear power plants in the world that represent a non-carbon source of energy and China plans another 100 coming on line. Buy (CCJ) on dips.
My Ten-Year View
When we come out the other side of the recession, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. The economy decarbonizing and technology hyper-accelerating, creating enormous investment opportunities. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old.
Dow 240,000 here we come!
On Monday, November 6 at 8:30 PM EST, the US Loan Officer Survey is out.
On Tuesday, November 7 at 2:30 PM, the US Imports and Exports are released.
On Wednesday, November 8 at 3:15 PM, the Fed Chair Jay Powell Speaks.
On Thursday, November 9 at 8:30 AM, the Weekly Jobless Claims are announced.
On Friday, November 10 at 2:30 PM, the University of Michigan Consumer Sentiment is published. At 2:00 PM the Baker Hughes Rig Count is printed.
As for me, I have been doing a lot of high-altitude winter mountain climbing lately, and with the warm spring weather, the risk of avalanches is ever-present. It takes me back to the American Bicentennial Everest Expedition, which I joined in 1976.
It was led by my old friend, instructor, and climbing mentor Jim Whitaker, who pulled an ice ax out of my nose on Mt. Rainer in 1967 (you can still see the scar). Jim was the first American to summit the world’s highest mountain. I tried to break a high-speed fall and an ice ax kicked back and hit me square in the face. If I hadn’t been wearing goggles I would have been blinded.
I made it up to 22,000 feet on Everest, to Base Camp II without oxygen because there were only a limited number of canisters reserved for those planning to summit. At that altitude, you take two steps and then break to catch your breath.
There is a surreal thing about that trip that I remember. One day, a block of ice the size of a skyscraper shifted on the Khumbu Ice Fall, and out of the bottom popped a body. It was a man who went missing on the 1962 American expedition. Everyone recognized him as he hadn’t aged a day in 15 years, since he was frozen solid.
I boiled my drinking water but at that altitude, water can’t get hot enough to purify it. So I walked 100 miles back to Katmandu with amoebic dysentery. By the time I got there, I’d lost 50 pounds, taking my weight to 120 pounds.
Jim was an Eagle Scout, the first full-time employee of Recreational Equipment Inc. (REI), and last climbed Everest when he was 61. Today, he is 92 and lives in Seattle, WA.
Jim reaffirms my belief that daily mountain climbing is a great life extension strategy, if not an aphrodisiac.
Mount Everest 1976
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
In the era of the digital age, the explosion of data has created a unique challenge and opportunity. The sheer volume of information generated by individuals, organizations, and interconnected devices is overwhelming, making it increasingly difficult to extract meaningful insights. This is where Artificial Intelligence (AI) is emerging as a game-changer, particularly in the realm of advanced pattern recognition. With the ability to analyze, identify, and interpret intricate patterns in data, AI is ushering in a new era of innovation across various industries.
The Unseen Patterns in Data
In almost every sector, data is the lifeblood that flows through the veins of an organization. The challenge lies in deciphering this data to gain actionable insights and make informed decisions. Traditional analytics and human-driven approaches fall short when dealing with colossal datasets.
This is where AI steps in. Machine learning and deep learning algorithms enable computers to process vast datasets and uncover hidden patterns. It's like having an extra set of eyes capable of seeing connections and trends that might go unnoticed by humans. From financial markets to healthcare, advanced pattern recognition is transforming the landscape.
Financial Markets: Predicting Trends and Anomalies
In the fast-paced world of financial markets, milliseconds can make a difference. AI-driven algorithms are now used to identify trends, anomalies, and trading opportunities with unprecedented speed and accuracy. High-frequency trading firms, for example, rely on AI to process massive datasets, analyze trading patterns, and execute trades in real time. This technology can detect subtle market signals and make split-second decisions, minimizing risks and maximizing profits.
Healthcare: Early Disease Detection and Personalized Medicine
In healthcare, AI is revolutionizing diagnosis and treatment. Advanced pattern recognition can analyze medical imaging data such as X-rays, MRIs, and CT scans to detect diseases at earlier stages. Moreover, it can tailor treatments by analyzing genetic data to match patients with the most effective therapies. This not only saves lives but also reduces healthcare costs.
Retail: Customer Insights and Inventory Management
Retailers are utilizing AI to gain a competitive edge. AI can recognize consumer buying patterns and preferences by analyzing vast datasets of purchasing history and online behavior. This data helps businesses provide personalized recommendations, optimize inventory management, and predict sales trends.
Manufacturing: Predictive Maintenance and Quality Control
AI is transforming manufacturing through predictive maintenance and quality control. Machines can analyze sensor data to detect patterns indicative of impending equipment failures, allowing for maintenance before breakdowns occur. In quality control, AI can inspect products and identify defects more accurately than human workers.
Security: Threat Detection and Fraud Prevention
Pattern recognition plays a pivotal role in security. AI-powered systems can identify patterns of suspicious behavior in real-time, making them essential for cybersecurity. For example, they can recognize signs of a cyberattack, fraudulent transactions, or unusual access to a network, thus protecting organizations from threats.
Challenges and Ethical Considerations
While AI has immense potential for pattern recognition, it's not without challenges. Ensuring data privacy, transparency, and avoiding bias are essential. In some cases, the AI models may overfit, meaning they perform exceptionally well on the training data but fail to generalize to new, unseen data.
Moreover, the ethical use of AI in advanced pattern recognition is of paramount importance. AI should be harnessed for the betterment of society and not for intrusive surveillance or harmful purposes.
In conclusion, AI's ability to perform advanced pattern recognition is a technological leap that is redefining industries. From finance to healthcare, retail, manufacturing, and security, the applications are far-reaching. As AI continues to evolve, we can expect even more profound changes, shaping a future where data is not just collected but truly understood. This transformation is not only enhancing productivity and decision-making but also promising to improve the quality of life for individuals and societies worldwide.
Mad Hedge Technology Letter
November 3, 2023
Fiat Lux
Featured Trade:
(THE CATCH UP PLAN)
(GOOGL), (MSFT), (CHATGPT)
The tech industry is quickly morphing into a generative artificial intelligence success story or bust outcome for many involved.
This came pretty much out of nowhere.
December 2022 was the big announcement that ChatGPT went live and everybody in tech has basically been freaking out since then.
Big ideas like the internet and software also had the same type of effect on tech stocks back in the heyday.
What would have Microsoft (MSFT) been without the computer or Windows?
Even more urgent, once perceived growth tech companies like Tesla are starting to cut prices of products because the consumer is tapped out these days.
That means tech corporations can’t sell the current product by adding incremental iterations and passing it off as something “groundbreaking.”
Consumers need something more.
Consumers will spend on the next big thing and generative artificial intelligence still has a long way to go, but stocks participating in generative AI are starting to get those premium multiples that were only reserved for tech royalty.
Everyone is hoping to get in on the action as well as Alphabet.
They are racing to build a new search engine and add artificial intelligence features to its existing products in the face of rapid growth in the field by rivals such as Microsoft Bing.
Google is testing new features called "Magi," with more than 160 people working full-time on the project.
Google's new products will try to predict users' needs, with features such as helping users write software code and display ads in search results, and Google is also exploring mapping technology that allows users to use Google Earth with the help of AI and search music through conversations with chatbots.
Samsung Electronics is reportedly considering replacing Google with Bing, the main search engine on its phones, because of Bing's artificial intelligence capabilities. The Samsung contract is expected to generate $3 billion in annual revenue for Google, a revenue stream that is now in jeopardy. In addition, Google has a $20 billion contract with Apple for a similar default search engine, which is up for renewal this year.
Google’s search engine could be swept into the dustbin of history if they don’t get a move on it pronto.
The ecosystems like Apple and Samsung can easily opt for a better engine if Google falls behind and that is exactly what we are seeing from Samsung.
I would probably say that Google got a little too cocky when they decided to stop developing itself.
They thought that nobody could topple them.
The panoramic views from the ivory tower can look nice from the terrace for a while until somebody builds a bigger ivory tower that obstructs the view.
It’s been quite fascinating to see Google’s sense of urgency lately because it was always assumed they were part of a stable duopoly with Facebook.
Google’s panic indicates that Microsoft’s Bing is a real threat to their revenue stream and at the very minimum, bits and pieces of the new technology will be incorporated into a new version of a search engine that will behave as a supercharged version of the likes we have never seen before.
If Google can catch up then its stock price will go a lot higher from here.
"Life is not fair; get used to it," said the Founder of Microsoft Bill Gates.
(SUMMARY OF JOHN’S NOVEMBER 1, 2023 WEBINAR)
November 3, 2023
Hello everyone,
Webinar Title: The Seasonals are Kicking In
Markets are starting to pick up.
Performance:
2023 year to date: +66.17%
Average Annualized Return: +47.82%
Since inception for 15 years: 663.36%
Trailing one-year return: 74.44%
Positions:
Risk On
NVDA 11/370-380 call spread 10%
TLT 11/76-79 call spread 10%
BRK/B 11/300-310 call spread 10%
Method to My Madness
The seasonals are kicking in, putting a floor under all asset classes.
Year-end rally is a natural tendency, but this keeps getting knocked down by events such as government shutdown and Middle Eastern War.
Bonds appear to be bottoming and are attracting long-term money.
Oil prices are selling off, losing the boost from the Gaza war.
AI stocks still attracting investors.
Wait to buy on pullbacks.
Global Economy – Red Hot U.S.
The Fed kept rates steady on Wednesday.
ADP rises by 113,000 for private sector payrolls.
U.S. Core PCE jumps 0.3%, in September, the most in four months.
Red Hot U.S. economy at 4.9% growth rate – highest in two years.
Car payment delinquencies hit record rate, with repossessions rising.
Retail sales rise 0.7% in September, much more than expected. Consumers are still paying up for the price increases.
Stocks – Bottom Fishing
All the elements of a year-end rally are setting up. Hedge Fund shorts at all-time highs.
Earnings coming in better than expected in big tech and financials.
Caterpillar dives on shrinking demand.
Amazon profits jump on the strength of its overwhelming cloud business.
JP Morgan CEO sells $1.38 million worth of stock or 1 million shares in the company.
Government shutdown on November 17 will continue to cap prices and risk-taking.
Ukraine War has become a big generator of U.S. Defence Companies, such as Lockheed Martin (LMT) and General Dynamics (GD).
Meta blows out Earnings with earnings at a breathtaking $34 billion, up 23% YOY.
If you are a long-term investor scale into Tesla. It is close to LEAPS buying territory.
Snowflake – buy on dips.
Google – buy on dips.
AMD - buy on dips.
BA – close to major buy.
CAT – a lifetime stock – multiple exposures to a recovery in the global economy.
BAC, JPM, IB, BRK/B – buy at these levels.
Netflix – two-year LEAPS possible even going 6 months out.
Bonds – Turning Hot
U.S. debt is turning hot, with institutions scaling in at present prices – perceived to be a long-term bottom.
10-year Bonds have repeatedly tried but failed to break the 5.00% yield.
U.S. Treasury to borrow $776 billion by yearend. It follows this up with an $816 billion draw on the markets from January to June. If bonds (TLT) can hold up against this onslaught of borrowing they are a “BUY”.
U.S. Government ends 2023 with a $1.7 trillion deficit, up 23%.
Fear of excessive government borrowing is given as the reason, but real borrowing is actually declining.
The whole falling interest rate and rising bond price trade have been delayed for six months on hotter than expected economic growth at 2.40% for Q2 and more Fed rate rises.
Junk bond ETFs (JNK) and (HYG) are holding up extremely well with an 8.74% yield.
Start scaling into long bond positions. On a six-month view, we could hit 110 TLT.
Worst case scenario in yields – we hit 5.20% and then fall.
Foreign Currencies – The Dollar is trying to top out
Bank of Japan eases grip on bond yields, ending its unlimited buying operation to keep interest rates down. Japan is the last country to allow rates to rise. Looking for a final capitulation in the yen and then we enter a decade-long buy. Expect the Japanese yen to take off like a rocket.
U.K. Interest rates hit 25-year high, at 5.16% for 30-year gilts. Inflation at 6.7% is the driver with no end in sight.
“Higher for Longer” gives an adrenaline shot for the U.S. dollar taking it to new 2023 highs.
The dollar is also catching a flight to safety bid from the imminent government shutdown. It should be topping soon.
Collapse of the dollar is now a 2024 story.
Buy (FXE), (FXB), (FXA), (FXY)
Energy & Commodities – End of the Party
Middle East crisis sees oil rally despite no supply disruptions whatsoever.
Saudi Arabia continues the Oil supply squeeze into Q4.
The U.S. eases Venezuela sanctions to boost American oil supplies and cap prices.
$100 a barrel and much higher possible if we get a cold winter, which may start to kick in shortly.
Duke Energy goes all in on Hydrogen in Florida, devoting 74.5 MwH solar plant in Debarry towards the electrolysis of water.
Hedge Funds buy into Uranium as the nuclear renaissance gains steam. If you are in CCJ hold it and add to it on dips.
FCX – strong LEAPS candidate.
Precious Metals – Flight to Safety
Middle East delivers a bid for precious metals.
The yellow metal is up 45% over five years.
Gold headed for $3000 by 2025.
Falling interest rates will be the driver.
Russia and China are stockpiling gold to sidestep international sanctions.
Real Estate – Mixed
Supplies are at 40-year lows.
95% of homeowners with mortgages date back to the 3.0% era.
Homebuyers are pouring into ARMs (Adjustable-Rate Mortgages), avoiding 30-year fixed rates at a mind-numbing 8.0%.
ARMs could be had at 6.77% last week. Overall, mortgage applications are down 22% YOY.
Housing starts jump in September, up 3.2% to 963,000 units.
Single family homes are the overwhelming leaders.
Apartment buildings were up an amazing 17.1%.
CCI – buy at these levels.
ITB – home builder – buy.
Cheers,
Jacquie
Global Market Comments
November 3, 2023
Fiat Lux
Featured Trade:
(NOVEMBER 1 BIWEEKLY STRATEGY WEBINAR Q&A),
(BRK/B), (TSLA), (LLY), (SNOW), (BIB), (BIB), (CCJ), (FXA), (FXB), (FXE), (EEM), (GLD), (SLV) (UNG), (LNG)
Below please find subscribers’ Q&A for the November 1 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Boca Raton.
Q: Earlier you said that the bull market should start from here—are you sticking to that argument?
A: Yes, there are all kinds of momentum and cash flow indicators that are flashing “buy right now.” The market timing index got down to 24—couldn’t break below 20. Hedge fund shorts: all-time highs. Quant shorts: all the time highs, creating a huge amount of buying power for the market. And, of course, the seasonals have turned positive. So yes, all of that is positive and if bonds can hold in here, then it’s off to the races.
Q: Do you have a year-end target for Berkshire Hathaway (BRK/B)?
A: Up. They have a lot of exposure to the falling interest rate trade such as its very heavy weighting in banks; and if interest rates go down, Berkshire goes up—it’s really very simple. You can’t come up with specific targets for individual stocks for year-end because of the news, and things can happen anytime. I love Berkshire; it's a very strong buy here.
Q: Tesla (TSLA) is not doing well; what's the update here?
A: It always moves more than you think, both on the upside and the downside. Last year, we thought it would drop 50%, it dropped 80%. Suffice it to say that, with the price war continuing and Tesla determined to wipe out the 200 other new entrants to the EV space, they’ll keep price cutting until they basically own that market. While that’s great for market share, it’s not great for short-term profits. Yes, Tesla could be going down more, but from here on, if you’re a long-term investor in Tesla, as you should be, you should be looking to add positions, not sell what you have and average down. Also, we’re getting close to Tesla LEAPS territory. Those have been huge winners over the years for us and I’ll be watching those closely.
Q: Any trade on the Japanese yen?
A: We broke 150 on the yen—that was like the make-or-break level. I’m looking at a final capitulation selloff on the yen, and then a decade-long BUY. The Bank of Japan is finally ending its “easy money” zero-interest-rate policy, which it’s had for 30 years, and that will give us a stronger yen when it happens, but not until then. So watch the yen carefully, it could double from here over the long term, especially if it’s the same time the US starts cutting its interest rates.
Q: What do you think about Eli Lilly (LLY)?
A: We love Eli Lilly; they’re making an absolute fortune on their weight loss drug, and they have other drugs in the pipeline being created by AI. This is really the golden age for biotech because you have AI finding cures for diseases, and then AI designing molecules to cure the diseases. It’s shortened the pipeline for new drugs from 5-10 years to 5-10 weeks. If you’re old and sick like me, this is all a godsend.
Q: Do you like Snowflake (SNOW)?
A: Absolutely, yes—killer company. Warren Buffet loves it too and has a big position; I’d be looking to buy SNOW on any dip.
Q: Would you do LEAPS on Netflix (NFLX)?
A: I would, but I would go out two years, and I would go at the money, not out of the money, Even then you’ll get a 100-200% return. You’ll get a lot even on just a 6-month call spread. These tech stocks with high volatility have enormous payoff 3-6 months out.
Q: Projection for iShares 20 Plus Year Treasury Bond ETF (TLT) in the next 6 months?
A: It’s up. We could hit $110, that would be my high, or up $25 points or so from here.
Q: Would you buy biotech here through the ProShares Ultra Nasdaq Biotechnology (BIB)?
A: Probably, yes. The long-term story is overwhelming, but it’s not a sector you want to own when the sentiment is terrible like it is now. I guess “buy the bad news” is the answer there.
Q: What did you learn from your dinner with General Mattis?
A: Quite a lot, but much of it is classified. When you get to my age, you can’t remember which parts are classified and which aren't. However, his grasp of the global scene is just incredible. There are very few people in the world I can go one on one with in geopolitics. Of course, I could fill in stuff he didn’t know, and he could fill in stuff for me, like: what is the current condition of our space weaponry? If I told you, you would be amazed, but then I would get arrested the next day, so I’ll say nothing. He really was one of the most aggressive generals in American history, was tremendously underrated by every administration, was fired by both Obama and Trump, and recently is doing the speaker circuit which is a lot of fun because there’s no question he doesn’t know the answer to! We actually agreed to do some joint speaking events sometime in the future.
Q: I have some two-year LEAPS now but I’m worried about adding too much. Could we get a final selloff in 2024?
A: The only way we could get another leg down in the market is number one if the Fed raises interest rates (right now, we’re positioned for a flat line and then a cut) or number two, another pandemic. You could also get some election-related chaos next year, but that usually doesn’t affect the market. But for those who are prone to being nervous, there are certainly a lot of reasons to be nervous next year.
Q: What iShares 20 Plus Year Treasury Bond ETF (TLT) level would we see with a 5.2% yield?
A: How about $79? That’s exactly why I picked that strike price. The $76-$79 vertical bill call spread in the (TLT) is a bet that we don’t go above 5.20% yield, and we only have 10 days to do it, so things are looking better and then we’ll see what’s available in the market once our current positions all expire at max profit.
Q: The first new nuclear power plant of 30 years went online in Georgia. Do you see more being built in the future?
A: It’s actually been 40 years since they’ve built a new plant, and it wasn’t a new plant, it was just an addition to an existing plant with another reactor added with an old design. I think there will be a lot more nuclear power plants built in the future, but they will be the new modular design, which is much safer, and doesn’t use uranium, by the way, but other radioactive elements. If you want to know more about this, look up NuScale (SMR). They have a bunch of videos on how their new designs work. That could be an interesting company going forward. The nuclear renaissance continues, and of course, China’s continuing to build 100 of the old-fashioned type nuclear power reactors, and that is driving global uranium demand.
Q: Would you hold Cameco Corp (CCJ) or sell?
A: I would keep it, I think it’s going up.
Q: How to trade the collapse of the dollar?
A: (FXA), (FXB), (FXE), and (EEM). Those are the quick and easy ways to do it. Also, you buy precious metals—gold (GLD) and silver (SLV) do really well on a weak dollar.
Q: Conclusion on the Ukraine war?
A: It will go on for years—it’s a war of attrition. About half of the entire Russian army has been destroyed as they’re working with inferior weapons. However, it’s going to be a matter of gaining yards or miles at best, over a long period of time. So, they will keep fighting as long as we keep supplying them with weapons, and that is overwhelmingly in our national interest. Plus, we’re getting a twofer; if we stop Russia from taking over Ukraine, we also stop China from invading Taiwan because they don’t want to be in for the same medicine.
Q: If more oil is released from the strategic petroleum reserve, what is our effect on security?
A: Zero because the US is a net energy producer. If our supplies were at risk, all we’d have to do is cut off our exports to China and tell them to find their oil elsewhere—and they’re obviously already trying to do that with the invasion of the South China Sea and all the little rocks out there. So, I am not worried. And also remember, every year as the US moves to more EVs and more alternatives, it is less and less reliant on oil. I would advise the administration to get rid of all of it next time we go above $100 a barrel. If you’re going to sell your oil, you might as well get a good price for it. If you look at the US economy over the last 30 years, the reliance of GDP on oil has been steadily falling.
Q: Are US exports of Cheniere Energy (LNG) helping to drive up prices here?
A: I would say yes, it’s got to have an impact on prices. We’re basically supplying Germany with all of its natural gas right now. We did that starting from scratch at the outset of the Ukraine war, and it’s been wildly successful. That avoided a Great Depression in Europe. Europe, by the way, is the largest customer for our exports. That was one of the arguments for us going into the United States Natural Gas (UNG) LEAPS in the first place.
To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, select your subscription (GLOBAL TRADING DISPATCH, TECHNOLOGY LETTER, or Jacquie's Post), then click on WEBINARS, and all the webinars from the last 12 years are there in all their glory.
Good Luck and Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
2023 Krakow Poland
Mad Hedge Biotech and Healthcare Letter
November 2, 2023
Fiat Lux
Featured Trade:
(SLICING THROUGH DOUBT)
(CRSP), (VRTX), (BLUE), (BEAM), (AMGN), (REGN)
