Page 442 - Mad Hedge Fund Trader

I Have a New Opening for the Mad Hedge Fund Trader Concierge Service

Our latest performance run for the ages has delivered unintended consequences once again.

One of my Concierge clients bought the bottom of the recent banking crisis crash to load the boat with bank stocks.

As a result, he never has to work again, not bad for someone who is only 45. No need for a Mad Hedge Concierge Service here.

I seem to have a recurring problem.

People make so much money from my concierge service that they retire early, and I never hear from them again.

No surprise with my eye-popping 2023 performance now at an eye-popping +46.38%.

That means I have a new opening for the Mad Hedge Concierge Service. I limit the service to only ten clients at any one time and entry is by application only.

The goal is to provide high net worth individuals with the extra degree of assistance they may require in managing diversified portfolios. Tax, political, and economic issues will all be covered.

It is also the ideal service for the small and medium-sized hedge fund that lacks the resources to support their own in-house global strategist full time.

The service includes the following:

1) Emergency access to John Thomas 24/7 through his personal cell phone number so he can act as your investment 911.

2) A risk analysis of your own personal portfolio with the goal of focusing your investment in the highest return sectors for the long term.

3) A monthly phone call from John Thomas to update you on the current state of play in the global financial markets.

4) Personal meetings with John Thomas anywhere in the world once a year to continue our in-depth discussions.

5) Early releases of strategy letters and urgent trading information.

6) More detailed and early recommendations on LEAPS, or two-year call options on the best high-growth names.

7) Access to a dedicated Concierge website listing complete All LEAPS investment portfolios.

The cost for this highly personalized, bespoke service is $12,000 a year.

To best take advantage of my Mad Hedge Fund Trader Concierge Service, you should possess the following:

1) Be an existing subscriber the Mad Hedge Fund Trader who is already well aware of our strengths and limitations.

2) Have a liquid net worth of over $250,000.

3) Possess a degree of knowledge and sophistication of financial markets. This is NOT for beginners.

To subscribe to Mad Hedge Fund Trader Concierge Service, please email Filomena at customer support at support@madhedgefundtrader.com. Please put “Concierge Candidate” in the subject line.

I look forward to hearing from you.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

September 28, 2023

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
September 28, 2023
Fiat Lux

Featured Trade:

(TIPPING THE SCALES)
(NVO), (LLY), (PODD), (TNDM), (DXCM), (RMD), (INSP), (MDGL), (ISRG), (AKRO), (ETNB)

Tipping the Scales

Biotech Letter

The pharmaceutical world is buzzing, and it’s all thanks to the groundbreaking obesity drugs from Novo Nordisk (NVO) and Eli Lilly (LLY). In my previous newsletter, I delved into the massive potential of these new treatments, and it sparked a flurry of discussions. So, this time, I want to peel back the layers and explore how these advancements affect other companies within the same market.

After all, their emergence creates a paradoxical narrative, a dance of shadows and lumens. These drugs, renowned as the modern panacea for the obesity crisis, have catapulted the companies behind them into unprecedented valuations, making them luminaries in a market awash with investors hungry for the next big thing.

The enthusiasm surrounding these drugs is not unfounded; they are pivotal in treating type 2 diabetes and are seen as the desperately needed solution to the widespread obesity crisis. The groundbreaking medications introduced by Novo Nordisk and Lilly are enabling individuals to lose approximately 15% to 20% of their body weight, with Wall Street anticipating the combined annual sales of these revolutionary drugs to surpass $40 billion by the close of this decade.

However, the shadows of GLP-1s cast a contrasting pallor on companies that burgeoned in tandem with America’s expanding waistlines.

Firms like Insulet (PODD) and Tandem Diabetes Care (TNDM) are witnessing a decline of 40% and 50% in their values this year, respectively.

Similarly, DexCom (DXCM), the frontrunner in glucose monitoring, has experienced a 16% dip, and ResMed (RMD), the stalwart in CPAP machines treating sleep apnea, has seen its stock plummet by 30%. Inspire Medical Systems (INSP) and Madrigal Pharmaceuticals (MDGL) have also encountered significant drops in their shares.

These companies, once the darlings of the medical stock market due to their escalating sales growth, are now facing the brunt of a shifting investor focus. This is because the investment community is envisioning a future with a reduced prevalence of diabetes and sleep apnea and is consequently retracting their stakes in these stocks, leaving companies and investors navigating through a sea of uncertainties.

By early spring, the potential impact of widespread GLP-1 usage became the focal point of strategic discussions at numerous hedge funds. That led to a shift as some started withdrawing from stocks like DexCom and Madrigal, subsequently opting to short-sell these shares. The broader market tuned in this summer.

A case in point is Intuitive Surgical (ISRG), a leader in surgical robotics, which noted during its earnings call that a preference for trying GLP-1s was leading to a deferment in weight-loss surgeries. Although these procedures constitute a minor segment of robotic surgeries, they have been instrumental in driving Intuitive’s growth.

GLP-1s have also affected the demand for insulin injections. Recently, endocrinologists have suggested that GLP-1s could potentially delay the transition to insulin for a significant portion of Type 2 patients. This revelation triggered a recalibration of sales forecasts and stock price targets, with Insulet experiencing a downgrade in both target price and rating.

Meanwhile, the growth prospects of glucose monitor manufacturer DexCom in the Type 2 market remain positive. The integration of glucose monitors with GLP-1s is anticipated to become a prevalent trend among diabetic patients. Despite a temporary rally in DexCom stock, the lingering question remains whether the expanding use of GLP-1s will eventually reduce the demand for glucose monitoring.

Vendors of sleep apnea devices, such as ResMed and Inspire Medical, are also conveying to investors the minimal impact of GLP-1s on their markets. However, the debate continues on the intrinsic link between obesity and sleep apnea and the potential repercussions of GLP-1s on the entire sleep apnea spectrum. As market dynamics continue to shift and the ripple effects of GLP-1s become the focal point of discussions, more and more questions about the future landscape of obesity-associated medtechs arise.

The positive developments in GLP-1s have also cast a shadow over another sector: liver medications.

In June, revelations about Lilly's investigational drug, retatrutide, sent ripples through the sector. The drug not only facilitated a 24% weight reduction in subjects but also significantly diminished fat levels in their livers. This development impacted the stock values of companies like Madrigal Pharmaceuticals, Akero Therapeutics (AKRO), and 89bio (ETNB), pioneers in crafting remedies for the fatty liver condition known as NASH. While it remains to be seen how much these stocks will fall, it’s evident that their decline has already started.

The market is a tumultuous sea of uncertainties, with companies and investors meticulously navigating the evolving dynamics. For the astute investor, the key is to learn how to strike a balance between the old and the new.

The allure of GLP-1s might lead to a reevaluation of the medtech sector’s prospects, but companies like Insulet, ResMed, and Inspire still hold resilience in a GLP-1-dominated landscape.

Ultimately, it’s about understanding the intricate push and pull of shadows and light. The wise investor doesn’t just follow the light; they also understand the shadows, learning to see the opportunities lurking within.

So, delve deep, recalibrate your strategies, and remember, the paradox is not a roadblock; it’s a guidepost to new horizons in pharmaceutical innovation.

September 28, 2023

Diary, Newsletter, Summary

Global Market Comments
September 28, 2023
Fiat Lux

Featured Trade:

(THE MAD HEDGE TRADERS & INVESTORS SUMMIT VIDEOS ARE UP!)
(THE MAD HEDGE DICTIONARY OF TRADING SLANG),
(TESTIMONIAL)

The Mad Hedge Summit Videos are Up

Diary, Newsletter

Video replays from the September 12-13 confab are up. Listen to 15 speakers opine on the best strategies, tactics, and instruments to use in these volatile markets. It is a true smorgasbord of investment strategies. Find the best one that suits your own goals.

The product discounts offered last week are still valid. Start, stop, and pause the videos at your leisure. Best of all, access to the videos is FREE. Access them all by going to www.madhedge.com, clicking September 2023 Summit Replays!, and selecting the speaker of your choice

STACKING SUCCESS

Mad Hedge AI

(SYM), (NVDA), (WMT), (TGT), (ACI)

Nvidia (NVDA) has stood out as a symbol of triumph in the technology industry, with a staggering 200% increase in 2023 alone. Despite a minor pullback, the GPU giant still has fuel in the tank, with projections showing a potential upside of around 27%.

However, the investment landscape is brimming with opportunities, and another contender in the AI sector is showing promise: Symbotic (SYM).

Having rallied almost 428% at its peak this year, Symbotic is at the forefront of revolutionizing logistics through AI, addressing the escalating complexities in supply chains.

This is a critical development because of the countless challenges involved in the process, such as labor strikes, congested ports, and rising fuel costs. Symbotic’s unique platform architecture has given it a first-mover advantage, leading to tangible benefits and a competitive edge in the market.

Symbotic’s proprietary system, shielded by over 500 patents, enables autonomous robots to navigate through distribution facilities at impressive speeds of over 20 miles per hour, achieving 99.99% accuracy in order fulfillment with minimal human intervention.

Needless to say, this technology is a much-needed solution in managing the increasing number of stock-keeping units (SKUs) and the added complexities involved with in-store pickups and home deliveries.

The high-density system and storage of Symbotic’s platform, coupled with the agility of its autonomous mobile robots, not only reduce movement but also enhance throughput, addressing the challenges of finding and retaining skilled workers.

As a result, this blend of innovation and opportunity translates into substantial customer benefits.

For example, a customer investing $50 million in a module can anticipate an equal value of inventory reduction and $250 million in cost savings over the 25-year useful life of the module, resulting in a lower footprint, higher efficiency, and accuracy.

To date, major corporations like Walmart (WMT), Target (TGT), C&S Wholesale Grocers, and Albertsons (ACI) have already embraced Symbotic’s innovations.

Meanwhile, the company’s financial growth is reflective of its success, with a 77% year-over-year increase in revenue to $312 million in its fiscal third quarter. Although not yet profitable, Symbotic is showing promising signs of improving margins and is progressing toward sustained profitability as it continues to scale its operations.

Symbotic’s market capitalization stands at roughly $17 billion, and its shares are justifiably premium-priced, given its cutting-edge AI technology and extensive expansion potential. Market opportunity is projected at a substantial $350 billion, indicating ample room for growth.

The investment community is also optimistic about Symbotic.

The company’s focus on the expansive U.S. apparel, general merchandise, and food and grocery market, valued at $144 billion, and its collaboration with SoftBank to offer warehouse-as-a-service systems, expand its total addressable market by over $500 billion.

This joint venture has resulted in a contracted backlog of around $23 billion, a significant achievement for a company projected to generate revenue of approximately $1.1 billion in its current fiscal year.

However, potential investors should consider certain aspects before diving in.

For one, Symbotic is still navigating its way to profitability, posting a net loss of around $39 million in its latest quarter. Additionally, there has been a noticeable slowdown in revenue growth, and the company’s reliance on Walmart for a significant portion of its revenue poses risks. Nonetheless, the joint venture with SoftBank is a strategic move to mitigate these concerns and diversify its customer base.

Looking at Symbotic’s trajectory, it’s clear that the company’s innovative approach and comprehensive platform stand out as its strong suits, differentiating it from competitors and adding substantial value to customers.

The impressive $23 billion backlog, blue-chip customer base, and strong value proposition indicate the company’s robust platform and solutions. The backlog’s structure, which allows Symbotic to pass on inflation and price increases to its customers while maintaining its margins and low risk of customer termination, is also noteworthy.

Overall, Symbotic’s fundamentals are solid, pointing towards a company with clear visibility in growth. However, the current stock price seems to have factored in much of the optimism. Still, the prospects for Symbotic are promising.

For those with an eye on the long game, waiting for the right opportunity to invest in this innovative company could be a prudent move.

September 27, 2023

Jacque's Post

(MINATURE AI WILL BE BIG IN THE FUTURE)

September 27, 2023

Hello everyone,

We are living in the era of Artificial Intelligence (AI), and it will change our lives in many ways.

Within AI there is currently a large focus on Tiny AI or Minature AI which aims to improve the sustainability of artificial intelligence, thereby reducing its high carbon footprint. This emerging technology compresses the size of artificial intelligence algorithms - which use far less computing power - especially those that use large quantities of data and computational power. What this means is that this technology – Minature AI, can fit and run within microprocessors on consumer or the Internet of Things (IoT)-enabled devices. For instance, we can point to natural language processing (NLP) models like Google’s BERT. The larger version of BERT has 340 million data parameters and training it just once costs enough electricity to power a U.S. household for 50 days. In another example, we learn that a single training session of GPT-3, a popular language that produces human-like text, has the same carbon footprint as traveling 700,000 kilometers by car.

Tiny AI is a power saver and addresses the carbon footprint of artificial intelligence. It aims to reduce the amount of power needed by building algorithms into hardware at the periphery of a network, where they can perform data analytics at low power, avoiding the need to send data back to the cloud for processing. This improves latency as well as power consumption and enables Tiny AI to run on devices like our mobile phones, increasing their functionality but also improving our privacy as the data stays on the device.

As AI keeps popping up in our everyday lives, it raises several privacy concerns. Do you ever get the feeling that you are being constantly monitored in some way, or your privacy is being compromised? Smart home devices use AI to personalize the experience for each user. However, they store large amounts of data that is not particularly relevant for their applications, on the cloud – making it vulnerable to hacking. There is a demand now for on-device AI which enhances both privacy and safety for Smart Home Devices. The Tiny AI algorithms would run on consumer phone hardware, eliminating the need to analyse data on the cloud, thus reducing a significant amount of energy. Furthermore, it would also ensure ultra-low latency. Think about Google Assistant, the voice assistant on Google’s phone and smart home devices. After Google trimmed down its code so that it runs on-device rather than sending data to the cloud for processing, it processes requests a lot faster than it did before.

Tiny/miniature AI will impact all industries. This technology will facilitate the running of machine learning (ML) models to the smallest of chips and a diverse range of devices. This allows devices to be smart without connecting to the internet. Think for a moment about an autonomous car that doesn’t need to connect to the cloud or simply use a mobile phone to diagnose diseases in remote areas without the internet. Along with better algorithms, advances in embedded devices are advancing the trend. This allows for the development of devices that consume very little power and run for months or years. Now that’s a win-win for people and the environment.

Happy Wednesday

Cheers Jacquie

Tiny Machine Learning: The Next AI Revolution

September 27, 2023

Tech Letter

Mad Hedge Technology Letter
September 27, 2023
Fiat Lux

Featured Trade:

(REIMAGINING TECH AND THE WORKFORCE)
(AI), (AMZN), (UBER)

Reimagining Tech and the Workforce

Tech Letter

Students hoping to become bankers shouldn’t study finance, they should dive into programming.

This is the big takeaway from how investment banks are run these days.

Gone are the moments when finance degrees were the hottest commodity, now it is all about generative AI.

Artificial intelligence (AI) could replace the equivalent of 300 million full-time jobs, a report by investment bank Goldman Sachs says.

It could replace a quarter of work tasks in the US and Europe but may also mean new jobs and a productivity boom.

And it could eventually increase the total annual value of goods and services produced globally by 7%.

Generative AI, able to create content indistinguishable from human work, is "a major advancement", the report says.

Silicon Valley is keen to promote investment in AI in not only the United States but in a way that will ultimately drive productivity gains across the global economy.

AI will complement the way bankers work, not disrupting it - making finance jobs better, rather than taking them away.

The report notes AI's impact will vary across different sectors - 46% of tasks in administrative and 44% in legal professions could be automated but only 6% in construction and 4% in maintenance, it says.

Journalists will therefore face more competition, which would drive down wages unless we see a very significant increase in the demand for such work.

Consider the introduction of GPS technology and platforms like Uber (UBER). Suddenly, knowing all the streets in London had much less value - and so incumbent drivers experienced large wage cuts in response, of around 10% according to our research.

The result was lower wages, not fewer drivers.

Over the next few years, generative AI is likely to have similar effects on a broader set of creative tasks.

According to research cited by the report, 60% of workers are in occupations that did not exist in 1940.

However, other research suggests technological change since the 1980s has displaced workers faster than it has created jobs.

Nobody understands how the technology will evolve or how firms will integrate it into how they work.

Lower wages and higher output are a perfect recipe for higher technology share prices and that is exactly what we will get.

Currently, we are experiencing a mild pullback from the AI mania, but that is simply because it got too far ahead of its skis.

I am quite disappointed in the price action in a stock like Amazon (AMZN) which announced a major investment in an AI startup, but the stock sold off the next day.

The AI pixie dust has leveled off in the short term, and the broader tech market is being dragged down by spiking interest rates.

I do believe in the AI hype, but these trends don’t go up in a straight line and need time to digest which often results in short-term pullbacks.

September 27, 2023 - Quote of the Day

Diary, Newsletter, Quote of the Day

"When a manager with a reputation for brilliance takes over a business with poor fundamental economics, it is the reputation of the business that remains intact," said Oracle of Omaha, Warren Buffett.