Page 436 - Mad Hedge Fund Trader

SOLD OUT - Monday, October 30 Sarasota, Florida General James Mattis Strategy Luncheon

SOLD OUT

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Luncheon, which I will be conducting in Sarasota, Florida on Monday, October 30, 2023. The cost of the luncheon will be $329.

My guest will be General James Mattis, a 48-year Marine Corps veteran, one of our country’s most distinguished soldiers, and America’s most recent Secretary of Defense.

This time things will be a little different. General Mattis and I will be fielding questions about the current state of the world. We will be joined by General Mattis’s former Chief of Staff, Lieutenant General Robert Ruark.

We should make quite an interesting threesome. General Mattis will also be providing some fascinating personal insights during his time in the White House.

An excellent meal will be followed by a wide-ranging discussion and an extended question-and-answer period.

This is a rare opportunity for you to have one-on-one contact with the top brass. Making things interesting is that I will have just returned from the front lines of the War in Ukraine, hopefully with all limbs still attached. There should be a lot to talk about.

I’ll be arriving on time and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.

The lunch will be held at an exclusive Sarasota hotel. The precise location will be emailed with your purchase confirmation. Mad Hedge guests will be assigned their own dedicated table in a ballroom with 200 other participants.

I have been allocated only ten tickets for this event so if you have the slightest interest in attending, please purchase your ticket immediately. They are likely to sell out fast.

I look forward to meeting you, and thank you for supporting my research.

~~To purchase tickets for this luncheon, please click on the BUY NOW! button above or click here.~~

October 11, 2023

Jacque's Post

(PLANT EXTINCTIONS COULD THREATEN THE CREATION OF MEDICINES)

October 11, 2023

Hello everyone,

Welcome to a future world with far less plant variety.

Dr Brown is one of the researchers who works at the Royal Botanic Gardens, Kew, who, along with others, has recently published a new report called State of the World’s Plants and Fungi.

The report has warned that we could potentially lose up to half of future medicines because of plant extinctions.

Nearly half of all plants that flower are at risk, amounting to more than 100,000 while it is believed around 77% of all those as yet undescribed by science are at risk.

Some are going extinct between the time of their discovery and when they are catalogued – which takes around 16 years on average.

The main cause of the extinctions is habitat loss, such as deforestation or the construction of dams which flood areas upstream.

We must remember that nine out of ten of our medicines come from plants, so we are potentially losing up to half of our future medicines.

Professor Alexandre Antonelli, director of science at Kew, said: “We know more about the surface of Mars than we know about fungi on this planet.”

Scientists state that at the current rate of scientific description it would take 750-1000 years to catalogue all fungal species.

Scientists have described 10,200 new fungal species and more than 8,600 species of plants since the pandemic in 2020, as lockdowns gave them more time to work through the backlog of found but unclassified samples.

Plants and fungi provide the cornerstone of all ecosystems of human life, supporting our livelihoods and providing us with food, medicine, clothing, and raw materials. So, protection of areas with important plant diversity should be of utmost significance.

With only around 10% of the world’s fungal biodiversity so far described, we could be missing out on species with game changing functions – like ones with enzymes that can break down plastic or cure diseases.

Scientists hope the research will encourage policy makers to take plants and fungi into account when choosing areas to protect as part of an international goal to protect 30% of the planet by 2030 and not just focus on animals.

From destruction of habitat to futuristic transport creation.

Imagine this – a 1,200-mile underwater train line in the deep blue sea, with a view of marine life as you travel at high speeds to your destination.

This is exactly what the UAE (United Arab Emirates) have planned. It was first discussed in 2018 as a hypothetical idea, but now it’s quickly becoming a reality, and it will cost a lot of cash.

The UAE is widely known for their technology, construction, and infrastructure in the Middle East.

With this futuristic mode of transport, exchange of goods and oil exports are feasible as well as movement of people. By joining the Indian city of Mumbai with Fujairah through ultra-speed floating trains, the projects aim to boost bilateral trade. There will be export of oil to India from Fujairah port and import of excess water from Narmada River, north of Mumbai.

The total length of the rail network will be less than 2,000km but the underwater part of the construction could pose unique challenges. Feasibility studies are still being done.

Happy mid-week.

Cheers

Jacquie

Prayers for all those affected by conflict in The Middle East and Ukraine.

FROM CHATBOTS TO GOD-BOTS

Mad Hedge AI

(GOOGL), (META), (MSFT)

From a subtle hum to a deafening roar, artificial intelligence (AI) conversations have captured the investors' world. And the plot thickens with the announcement that Bletchley Park, the WWII codebreakers' historic hub, will soon play host to the global AI safety summit. This makes the whispers about AI breakthroughs even more difficult to ignore.

Everyone's talking about Artificial General Intelligence (AGI). While some might dramatically refer to it as the "God-like" AI, it's essential to understand its true potential. Strip away the grandeur, and we're talking about a digital intellect mirroring human cognition, maybe even outshining it. And here's the kicker: it could make decisions beyond our immediate grasp or control.

In the current tech landscape, platforms like OpenAI's ChatGPT and Alphabet's (GOOGL) Bard are impressive and appear to be the future of AI. More and more businesses have been investing in this technology. With the AI market getting valued at nearly $100 billion and is projected to grow exponentially, reaching close to two trillion U.S. dollars by 2030, this update no longer comes as a surprise.

Still, it’s critical that we don’t blur the lines; ChatGPT and Bard are sophisticated chatbots, not the omnipotent AGIs.

AGI represents more than just an advancement in AI; it signifies a transformative shift. Imagine a digital entity that learns, adapts, and tackles challenges at a pace and scale beyond our comprehension. Think of a digital entity that evolves, absorbs, and confronts novel challenges as we do, but at an unparalleled speed and magnitude.

When you tune into Silicon Valley's discussions, there's a range of predictions about AGI's arrival. Some experts believe it's just around the corner, while others anticipate a 2035 debut. Either way, the timeline is surprisingly short.

But before you mortgage the house, let me rain on that parade just a smidge: No company has yet delivered a true AGI. If they claim they have, kindly ask them what they're smoking.

You see, while AGI sounds fascinating, it's still a dream, an aspiration. What we're really talking about is a digital intellect that mirrors, perhaps even outdoes, our human cognition. It could potentially make decisions that leave us in the proverbial dust, scratching our heads.

But who's really leading the AGI race? Google (GOOGL), with its golden child, DeepMind, is definitely one to watch. Though they haven't cracked AGI yet, historically, betting against Google has been like betting against the house in Vegas.

On the other hand, Facebook (META), now donning the fancier title of Meta Platforms, Inc., is more than just poking around in your data. Their AI endeavors are formidable, but it seems they're currently more smitten with creating virtual worlds. It might be a while before they're delivering us a robotic Aristotle.

Then, there are Microsoft (MSFT) and OpenAI. With their collaborative might, they’re like the AI sector's dynamic duo – one brings the cash, the other the brains. As for IBM (IBM)? Well, let's say Big Blue’s Watson has been around, and age in the tech world isn’t always an asset.

While AGI might sound like sci-fi's brainchild, and Hollywood’s Terminator and The Matrix do paint some vivid pictures, don't be swayed by overhyped tales. The industry bigwigs, from OpenAI to Google, are carving the AI narrative, and as they inch closer to AGI, stock prices react like they've had one too many espressos.

As AI continues to evolve, and with events like the Bletchley Park summit drawing attention, investors need to stay alert. It's essential to remain informed and be prepared for the twists and turns in the AI narrative. AGI, in whatever form it eventually takes, will play a significant role in shaping our future.

Notably, the AGI market size is estimated to reach $1.53 billion in 2023 and is projected to soar to $28.51 billion by 2033, exhibiting a promising CAGR of 34.0% from 2023 to 2033.

In the investment world, staying ahead of the curve is crucial. Every announcement or hint about AGI can influence stock market dynamics. So, brace yourself for a volatile journey in the AI market. Trends in this sector change rapidly, and being proactive is the key to success.

Lastly, a piece of advice for investors: Don't throw all your money at the shiniest new AI promise. Diversification is the seasoned investor's best friend. And always, always be wary of the hype.

October 11, 2023

Tech Letter

Mad Hedge Technology Letter
October 11, 2023
Fiat Lux

Featured Trade:

(QUESTIONS POP UP ABOUT GENERATIVE AI)
(GOOGL), (AI)

Questions Pop Up About Generative AI

Tech Letter

Google is worried that generative artificial intelligence isn’t as accurate or as useful as currently advertised.

There have been major disagreements among internal Google engineers about whether this service is additive at all.

Google product managers, designers, and engineers have used a chat forum to openly debate the AI tool's effectiveness and utility, with some questioning whether the enormous resources going into development are worth it.

The problem with a great deal of the data they are using to build the software is they cannot independently verify whether it is true or not.

The AI systems are trained on massive amounts of text that form the building blocks of chatbots, but this text is just idling on the internet and that doesn’t mean it's accurate.

Last month, Google unveiled its most ambitious update yet: connecting Bard to its most popular services, such as Gmail, Maps, Docs, and YouTube.

However, rolling out these new updates has coincided with a drove of new complaints about the tool generating made-up facts and giving potentially dangerous advice.

Google’s thousands of low-paid contractors training Bard use convoluted instructions that they’re asked to complete in minutes.

In my opinion, Google is attempting to roll out this product as fast as possible without really focusing on the quality.

Inside and outside the company, the internet-search giant has been criticized for providing low-quality information in a race to keep up with the competition, while brushing aside ethical concerns.

For Google, ensuring the success of its Bard AI chatbot is of utmost importance. The company is far and away the leader in search, its financial lifeblood generates about 80% of parent company Alphabet’s revenue.

At Bard’s launch, the company was upfront about its limitations, including the possibility for the AI tool to generate convincing-sounding lies.

Google takes advantage of an army of underpaid and overworked contractors in order to refine Bard’s responses and I believe that is an extremely rash strategy.

Executives also must consider the consequences of the enormous costs needed to maintain large language models.

Google has reacted by downplaying fears, lack of usefulness, and the sheer fact that they might not have any idea what they are doing.

We are in unknown territory now with unproven technology and Bard could end of becoming a giant bust.

When is the point where engineers egging each other on start to question the core project? Remember, these engineers have monetary and personal incentive to continue with this because they are getting paid around half a million dollars per year.

If this project ends in humiliation for Google, they just move on, take the next engineering job, and Google writes down the losses.

The beginning of 2023 was beset with AI euphoria only to move into the latter half of 2023 where investors realize that it would take a while for any of this technology to meaningfully boost revenue.

Questioning the idea in itself is also another downgrade to AI momentum, and investors need to be cautious right now instead of throwing money at whatever sticks.

At some point, management will need to look at this project closer and not make this only about catching up with Microsoft’s ChatGPT.

Next year will go a long way to prove whether this technology is legitimate or not and we stay on a knife edge to see how it plays out. My bet is nothing really hits until later in the year.

Even if it doesn’t go exactly to plan, I do believe there are some revenue-boosting applications from this technology in the long term so it’s not exactly all negative for Google.

It could be that Google realizes that using the best data coupled with the best engineers is a better combination than what they are doing with Bard.

October 11, 2023

Diary, Newsletter, Summary

Global Market Comments
October 11, 2023
Fiat Lux

Featured Trade:

(FRIDAY, OCTOBER 20 LONDON, ENGLAND GLOBAL STRATEGY LUNCHEON)
(THE HARD TRUTH BEHIND BUYING IN NOVEMBER),
(NOTICE TO MILITARY SUBSCRIBERS)

SOLD OUT - Friday, October 20 London, England Global Strategy Luncheon

Diary, Lunch, Luncheon, Newsletter

Come join me for lunch for the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in London at 12:30 PM on Friday, October 20, 2023. A three-course lunch is included.

I’ll be giving you my up-to-date view on stocks, bonds, currencies commodities, precious metals, and real estate.

And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $297.

I’ll be arriving early and leaving late in case anyone wants to have a one-on-one discussion, or just sit around and chew the fat about the financial markets.

The lunch will be held at a private club on St. James Street, the details of which will be emailed to you with your purchase confirmation.

I look forward to meeting you and thank you for supporting my research.

To purchase tickets for this luncheon, please click on BUY NOW! button above or click here.

The Hard Truth Behind Buying in November

Diary, Newsletter

Followers of my Trade Alert service have watched me shrink my book down to nothing over the last two months, the smallest ever.

That’s because I am a big fan of buying straw hats in the dead of winter and umbrellas in the sizzling heat of the summer. I even load up on Christmas ornaments every January when they go on sale for ten cents on the dollar.

There is a method to my madness.

If I had a nickel for every time that I heard the term “Sell in May and go away,” I could retire. The flip side of that is just as valuable, “Buy in November and stand pat.”

Oops, I already am retired!

In any case, I thought that I would dig out the hard numbers and see how true this old trading adage is.

It turns out that it is far more powerful than I imagined. According to the data in the Stock Trader’s Almanac, $10,000 invested at the beginning of May and sold at the end of October every year since 1950 would be showing a loss today.

Amazingly, $10,000 invested on every November 1 and sold at the end of April would today be worth $702,000, giving you a compound annual return of 7.10%!

This is despite the fact that the Dow Average rocketed from $409 to $33,000 during the same time period, a gain of 81 times!

My friends at the research house, NASDAQ Dorsey, Wright, who run a pretty powerful technical service of their own, have parsed the data even further.

Since 2000, the Dow has managed a feeble return of only 4%, while the long winter/short summer strategy generated a stunning 64%.

Of the 62 years under study, the market was down in 25 May-October periods, but negative in only 13 of the November-April periods, and down only three times in the last 20 years!

There have been just three times when the "good 6 months" have lost more than 10% (1969, 1973 and 2008), but with the "bad six month" time period there have been 11 losing efforts of 10% or more.

Being a long-time student of the American, and indeed, the global economy, I have long had a theory behind the regularity of this cycle.

It’s enough to base a pagan religion around, like the once practicing Druids at Stonehenge.

Up until the 1920’s, we had an overwhelmingly agricultural economy. Farmers were always at maximum financial distress in the fall, when their outlays for seed, fertilizer, and labor were the greatest, but they had yet to earn any income from the sale of their crops.

So they had to borrow all at once, placing a large cash call on the financial system as a whole. This is why we have seen so many stock market crashes in October. Once the system swallows this lump, it’s nothing but green lights for six months.

After the cycle was set and easily identifiable by low-end computer algorithms, the trend became a self-fulfilling prophecy.

Yes, it may be disturbing to learn that we ardent stock market practitioners might in fact be the high priests of a strange set of beliefs. But hey, some people will do anything to outperform the market. While we have the most advanced and sophisticated economy and financial system in the world, our market cycles are still agricultural.

It is important to remember that this cyclicality is not 100% accurate, and you know the one time you bet the ranch, it won’t work. But you really have to wonder what investors are expecting when they selling stocks at these low levels, under $422 in the S&P 500 (SPY). Nothing like closing the bard door after the horses have bolten!

Will company earnings multiples further expand from 19 to 20 or 21? Will the GDP suddenly reaccelerate from a 2% rate to the 4% expected by share prices when the daily sentiment indicators are pointing the opposite direction?

I can’t wait to see how this one plays out.

My Sources for Stock Tips is Interstellar

October 10, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
October 10, 2023
Fiat Lux

Featured Trade:

(FROM MEMORY LAPSES TO MARKET LEAPS)

(BIIB), (ESAIY), (SAGE)

From Memory Lapses To Market Leaps

Biotech Letter

In the intricate maze of Alzheimer's disease (AD) research, many pharmaceutical pioneers have found themselves at dead ends. Over the past decades, the quest for groundbreaking AD treatments has seen numerous experimental drugs falter. Yet, against this backdrop, Biogen (BIIB) stands out, having secured approvals for two AD drugs within a span of just a few years.

Given this remarkable achievement, one might expect Biogen's shares to be soaring. Surprisingly, the company's stock performance has been underwhelming.

Biogen's first AD therapy, Aduhelm, received approval in mid-2021. Yet, its introduction to the market was not without challenges. The approval of Aduhelm was mired in controversy due to inconclusive data regarding its effectiveness, leading to hesitancy among many physicians. This raised eyebrows among investors, questioning the drug's potential return on investment.

However, the real game-changer lies in Biogen's second AD drug, Leqembi, which entered the market this year. Developed in partnership with Japan-based Eisai (ESAIY), the two companies will equally share the profits and losses.

For investors, this partnership signifies a shared risk and potential for significant returns. Analysts have varying estimates regarding Leqembi's sales potential, with some projecting revenues of $3 billion by 2028. Such projections can translate to substantial earnings per share, making it a focal point for stock market enthusiasts.

Forecasts suggest that the Alzheimer’s disease (AD) sector will witness a significant expansion, with an anticipated compound annual growth rate of 20.0%, escalating from $2.2 billion in 2020 to a staggering $13.7 billion by 2030 in the primary eight markets, namely, eight major markets the United States, France, Germany, Italy, Spain, the United Kingdom, Japan, and urban China.

Considering the cautious approach after the Aduhelm situation, the market might be hesitant about making bold predictions for Leqembi. However, from an investment standpoint, Leqembi's financial trajectory appears promising. With a set annual list price and a growing patient base, the drug's revenue stream is poised for growth. For investors, this means a potential uptick in stock value and dividends in the coming years.

Diving deeper into Biogen's portfolio, the company's pipeline includes specific assets like BIIB080, an antisense oligonucleotide therapy targeting tau, a protein buildup in Alzheimer's patients' brains. There's also BIIB121 for Parkinson's Disease and BIIB124 for Essential Tremor. These assets, if approved, could open up new revenue streams, making Biogen's stock even more attractive.

Beyond its neuro portfolio, Biogen is diversifying its offerings. In August, the U.S. Food and Drug Administration (FDA) approved Zurzuvae, a medicine developed with Sage Therapeutics (SAGE) for postpartum depression (PPD). However, the FDA declined its use for major depressive disorder (MDD), a much larger market. Needless to say, this decision impacts the company’s potential revenue.

Further solidifying its position in the biotech market, Biogen is in the process of acquiring Reata Pharmaceuticals for $7.3 billion.

This acquisition brings Skyclarys, a treatment for Friedreich's ataxia, under Biogen's umbrella. Reports suggest that the market for drugs treating Friedreich's ataxia could surpass $2 billion annually by 2030.

So, what's the bottom line?

Biogen is proactively addressing its challenges, diversifying its portfolio, and showing potential for growth. While there are uncertainties, the company's strategic moves in the biotech space make it a contender for portfolio inclusion. For those with a keen eye on biotech stocks, the company offers both risks and rewards. Its recent approvals and acquisitions signal potential growth, but as with all investments, due diligence is crucial.

In the ever-evolving world of biotech investments, Biogen evidently stands as a company with potential. Its endeavors in Alzheimer's treatments, strategic partnerships, and acquisitions position it as a stock to watch. While challenges remain, the company's trajectory suggests a promising future, making it a consideration for investors seeking growth in the biotech sector. I suggest you buy the dip.