While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Mad Hedge Technology Letter
March 6, 2020
Fiat Lux
Featured Trade:
(HERE’S A BIG TECH CORONA PLAY)
(NUAN), (VEEV)
I love the cloud, and the health cloud is the ultimate coronavirus equalizer.
I am also on record saying that the 2 cloud sub-sectors that will be lights out in 2020 are the health cloud and network security cloud.
I believe Veeva Systems (VEEV) is one example of a cloud play that many long-term investors need to add before it gets too expensive.
I have another health cloud play for you up my sleeve as well.
While many investors were lamenting the coronavirus meltdown in tech shares, the same cannot be said for Nuance Communications, Inc. (NUAN), who seek to transform patient care with AI‑powered solutions for physicians, radiologists, and hospitals.
This company has famed scientist Ray Kurzweil's fingerprints all over it.
In 1974, Raymond Kurzweil founded Kurzweil Computer Products, Inc. to develop the first omni-font optical character-recognition system – a computer program capable of recognizing text written in any normal font.
In 1980, Kurzweil sold this company to Xerox, later becoming known as Xerox Imaging Systems (XIS), and later ScanSoft which merged with Nuance in 2005.
Healthcare is a focus for the company who on their webpage describes their mission as a company that “empowers organizations to unlock value and meaning in the millions of interactions that happen every day.”
They also provide their A.I. services to other industries such as financial, transportation, telecommunications, and government.
Their crown jewel is the Nuance Dragon Medical One cloud-based platform and it just expanded its access to France, Belgium, and the Netherlands.
Integrated within the electronic health record (EHR), Dragon Medical One offers physicians the ability to capture a patient’s complete snapshot at the point of care in their own local language – reducing administrative workloads while improving documentation quality and care.
Nuance delivers intelligent systems that aid a more natural and insightful approach to clinical documentation, freeing clinicians to spend more time caring for patients.
Nuance healthcare solutions enhance and communicate more than 300 million patient stories each year, helping more than 500,000 clinicians in 10,000 global healthcare organizations to drive meaningful clinical and financial outcomes.
Nuance’s award-winning clinical speech recognition, medical transcription, CDI, coding, quality, and medical imaging solutions offer a unique end-product to medical professionals and patients.
Its intelligent voice technology helps physicians produce clinical documentation up to 45% and capture up to 20% more relevant data using personalized A.I. tools.
Clinicians simply open the application, select the section of documentation, and start speaking to update the EHR.
Doctors recognized a dramatic improvement in clinic letter turnaround times since integrating with the Dragon Medical One platform describing the process as efficient and improving overall patient experience.
Nuance has accelerated the adoption of the electronic paper records system maximizing resources by forcing medical records to go entirely digital.
The demand for AI-powered documentation solutions worldwide is agnostic to location - physicians face the same headaches of administrative workloads and have the same dire need for tools that help them focus on providing the best possible care to their patients.
This unique platform addresses care quality while maximizing patient satisfaction and minimizing workload and burnout pressures on providers worldwide.
As an integral healthcare cloud play for the short- and long-term future, the coronavirus should have benign impact on its business.
We could ever say that the outbreak could galvanize healthier long-term demand trends for Nuance.
The pandemic acts as almost a non-stop commercial to the next generation technology needs in healthcare in which Nuance plays into with its top-level health cloud tools.
Investors have agreed with my idea that this is the year of the health cloud and Nuance shares are up 20% since the introduction of the coronavirus.
If readers want to be part of the future, pick up a few shares of Nuance Communications.
“Twitter has been my life's work in many senses. It started with a fascination with cities and how they work, and what's going on in them right now.” – Said Founder and CEO of Twitter Jack Dorsey
Global Market Comments
March 6, 2020
Fiat Lux
Featured Trade:
(THE UNITED STATES OF DEBT),
(TLT), (TBT), ($TNX)
With ten-year US Treasury yields falling below 0.90% today a borrowing rampage of epic proportions is about to ensue. This is not a new thing.
We are, in fact, becoming the United States of Debt.
That Washington is taking the lead in this frenzy of borrowing is undeniable. Since the new administration came into power three years ago, the annual budget deficit has nearly tripled from $450 billion to $1.2 trillion.
Add it all up and the United States government is on track to take the National Debt from $23 trillion to $30 trillion within a decade.
The National Debt exceeded US GDP in 2016, taking the debt to GDP ratio to the highest point since WWII.
Former Fed governor Janet Yellen recently confided to me saying, “It’s the kind of thing that should keep you awake at night.”
It gets worse.
According to the Federal Reserve Bank of New York, total personal debt topped $17 trillion by the end of 2019. An overwhelming share of personal consumption is now funded by credit card borrowing.
Some 33% of Americans now have debts in some form of a collection and that figure reaches an astonishing 50% in many southern states (see map below). Call it the Confederate States of Debt.
Corporations have also been visiting the money trough with increasing frequency taking their debt to $6.1 trillion, up by 39% in five years, and by 85% in a decade.
The debt to capital ratio of the top 1,000 companies has ballooned from 35% to 54% and is now the highest in 20 years.
Another foreboding indicator is that corporate debt is rising faster than sales, with debt rising by a breakneck 8.5% annualized compared to 4.6% for sales over the past decade.
Automobile debt now tops $1 trillion and with lax standards has become the new subprime market.
And remember that other 800-pound gorilla in the room? Student debt now exceeds $1.6 trillion and is rising, as is the default rate. Provisions in the last tax bill eliminate the deductibility of the interest on student debt making lives increasingly miserable for young borrowers. And you wonder why the US birth rate is so low.
Of course, you can blame the low interest rates that have prevailed for the past decade. Who doesn’t want to borrow when the inflation-adjusted long-term cost of money is FREE?
That explains why Apple (AAPL), with $270 billion in cash reserves held overseas, has been borrowing via ultra-low coupon 30-year bond issues even though it doesn’t need the money. Many other major corporations have done the same.
And while everything looks fine on paper now, what happens if interest rates ever rise?
The Feds will be in dire straight very quickly. Raise short term rates to the 6% seen at the peak of the last cycle and the nation’s debt service rockets from 4% to over 10% of the total budget. That’s when the sushi really hits the fan.
You can expect the same kind of vicious math to strike across the entire spectrum of heavily leveraged borrowers going forward, including you and me.
We are also witnessing the withdrawal of the Chinese as major Treasury bond buyers, who along with other sovereign buyers historically took as much as 50% of every issue. Declare a trade war on your largest lender and it plays hell with your cash flow.
Don’t expect them back until the dollar starts to appreciate again, unlikely in the face of ballooning federal deficits.
Rising supply against fewer buyers sounds like a recipe for eventually much higher interest rates to me.
Keep in mind that this is only a decade-long view forward. The next big move in interest rates will be down as we slide into the next recession, possibly all the way to zero. As with everything else in life, timing is everything.
So, like I said, things are about to get a whole lot better for the bond-shorting crowd. Just watch this space for the next Trade Alert regarding when to get back in for the umpteenth time.
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
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
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
March 5, 2020
Fiat Lux
SPECIAL MARKET BOTTOM ISSUE
Featured Trade:
(FRIDAY, APRIL 17 SAN FRANCISCO STRATEGY LUNCHEON),
(A LEAP PORTFOLIO TO BUY AT THE BOTTOM),
(TEN LONG-TERM BIOTECH & HEALTHCARE LEAPS TO BUY AT THE BOTTOM)
(UNH), (HUM), (AMGN), (BIIB), (JNJ), (PFE), (BMY)
