Global Market Comments
June 6, 2022
Fiat Lux
Featured Trade:
(THE MAD HEDGE TRADERS & INVESTORS SUMMIT IS ON FOR JUNE 14-16)
(MARKET OUTLOOK FOR THE WEEK AHEAD, or PUTIN’S DEAD END),
(VIX), (HYG), (JNK), (PTON), (W), (MSTR), (RDFN), (BYND), (F), (TSLA), (NVDA)
The current consensus for market strategists is that volatility will remain high.
Please pinch me because I think I died and went to heaven. For every time the Volatility Index (VIX) tops $30, I make another 10%-15% for my followers.
The bulk of market players are now obsessing whether we are entering a recession or not, as if their investment faith depended on it.
Recession, resmession.
As long as I can keep making a 65.40% trailing one-year return, while the Dow Average is off -4.2% during the same time period, I could care less what the economy is actually going to do.
After an impressive 380-point, 10% rally in the S&P 500, it now looks like the stock market is failing once again. Best case, we revisit this year’s low at 3,800. Worst case, we break to new lows at 3,600. The very worst case, we break below 3,500 and wish you had never heard of the stock market.
If you are a trader, there is a fantastic opportunity here to buy low, sell high, and retire early. If you are disciplined, you still have a ton of cash left over from the end of 2021 (I was 100% cash) and will be cherry-picking on the big down days.
It's really very simple. The longer you have been doing this, the easier it gets and the more money you will make. After 52 years of practice, I can do this in my sleep.
As the bear market worsens, we are seeing old asset classes return from the dead like the revived dinosaurs of Jurassic Park. Call convertible bonds are the velociraptors of the bunch.
Take the main junk bond ETF like the iShares iBoxx High Yield Corporate Bond Fund (HYG) and the SPDR Barclays High Yield Bond Fund (JNK), which have seen yields double from 3% to over 6% in only six months.
If you are willing to take on more risk, individual busted convertible bonds yield infinitely more. You know all the names. Peloton (PTON) converts are paying a 10.4% yield to maturity, Wayfair (W) 11.0%, MicroStrategy (MSTR) 13.1%, Redfin (RDFN) 14.5%, and Beyond Meat (BYND) 19.5%. Buy ten of these and even if one goes under, you still earn a decent double-digit return.
Having run a convertible bond trading desk for ten years, I can tell you that the risk/reward balance for many individuals with this investment class is just right.
As my summer military duty approaches, information about the Ukraine War is pouring into me. I will share with you what I can, what has been declassified for the war is still a major factor in your investment outcomes. I have been able to use my “top secret” status for 50 years,= to your benefit.
The amazing thing is that in this modern age, information goes from “top secret” to declassified in only a day. It is a new strategy used by the current administration that is working incredibly well. Information is more valuable shared than locked up.
I have been getting a lot of questions from readers as to why Vladimir Putin committed such a disastrous error by invading Ukraine as he is considered a smart guy. My initial response was that he surrounded himself with “yes” men who only told him what he wanted to hear, leading to terrible outcomes, which I have seen happen many times.
The costs of the war for Putin have so far been enormous; 50,000 casualties, 1,000 tanks, 1,300 armored vehicles, banishment from the western economy, the loss of $1 trillion in foreign held assets, and the decline of the national GDP from $1.5 trillion to $1 trillion.
The costs are about to substantially rise. The US is now sending over its most advanced artillery systems, the MRLS, or Multiple Rocket Launch System, which can hit any target within 300 miles with an accuracy of one meter. All you have to do is dial in the latitude and longitude of the target and it never misses. This one weapon will certainly bring the war to a stalemate and consign it to page three of the newspapers.
But after doing a ton more research, my view has evolved. Putin has in fact launched a Resource War against the entire rest of the world. The result has been to boost the price of practically everything Russia produces, including oil ($123 billion), refined petroleum products ($63 billion), iron & steel ($28 billion), coal ($17 billion), fertilizer ($13 billion), wood ($12 billion), wheat ($9 billion), aluminium ($8 billion), platinum, palladium, uranium.
There is also the inflation angle. While the US benefits from many of these high prices as well, they have raised the US inflation rate from 5% to 8.3%. That damages the election prospects of Biden and the Democrats. High inflation improves the election of prospects of a former president who Putin seems to vastly prefer for whatever reason.
After covering Russia for 50 years, flying their front-line fighters, springing a wife out of jail in Moscow, I can tell you that everything there is a chess game, and they play a very long game.
Nonfarm Payroll Report comes in at 390,000, better than expected. Leisure & Hospitality led the gains with 84,000, and Professional & Business Services by 75,000. Manufacturing fell to only 18,000, largely because of a shortage of workers. The Headline Unemployment Rate remained the same at 3.6%. Average hourly earnings rose by an inflationary 5.2% YOY. The U6 “discouraged worker” rate rose back to 7.1%.
Weekly Jobless Claims jump 19,000 to 200,000, a two-month high, according to the Department of Labor. Compensation for American workers has hit a 30-year high. New York showed the largest increase followed by Illinois.
OPEC+ raises oil output to meet surging energy demand caused by the Ukraine War. Up 648,000 barrels a month for July and August. They could easily do a lot more. The cartel is aiming for the pre-pandemic 10 million barrels a day. No dent in prices at the pump yet.
Hedge Funds were slaughtered in May, with the flagship Tiger Global Fund down a massive 14%. Gee, Mad Hedge Fund Trader was UP 11% in May and am up 44% on the year. Maybe there’s something in the water here at Lake Tahoe. Or, maybe it’s the “Mad” that is giving me my edge?
S&P Case Shiller National Home Price Index tops 20.6%, a new all-time high. Tampa (34.8%), Miami (32.4%), and Phoenix (32.0%) lead the gains. Incredible as it may seem, price rises are accelerating. But expect that to cool off once current prices start feeding into the index.
Home Listings soar, with homes for sale up 9% YOY as homeowners fear missing getting out at the top. New listings have doubled in a year, according to Redfin. Outrageous over-market bids have definitely ended in California. So far, no hint of price drops….yet.
A Ford (F) Electric Pickup can power your house for ten days, but only if you live in a tiny house. Ford is the first company to introduce bidirectional charging that lets your home run off the vehicle’s 1,300-pound lithium-ion battery. All you need is a $3,895 hardware upgrade from Sunrun. The range is 320 miles, not as much as the latest Tesla Model X (TSLA). Good luck getting one. Ford isn’t taking any new orders until it fills the 200,000 it already has. Expect Tesla to copy the move.
The Fed may overshoot on raising interest rates if Fed governor Christopher Waller has his way. That’s because going too tight may be necessary to break the back of inflation. That’s what happened in 1980, when Fed Funds hit 17%, and ten-year bond yields hit 15.84%. My first home mortgage interest rate for a coop in Manhattan back then was 17%.
China Covid Cases fade, prompting a big Bitcoin rally. This could be the impetus for a sudden global economic recovery that will deliver a big US stock market rally. Good thing I loaded the boat with tech stocks two weeks ago.
The Fed Minutes were not so horrible, downplaying the risk of a full 1% rate rise, triggering a 1,000-point rally in the Dow. With five up days in a row this is starting to look like THE bottom. Is this the light at the end of the tunnel?
NVIDIA (NVDA) rips, surprising to the upside on almost every front, sending the stock up $30, or 18.75%. Mad Hedge followers bought (NVDA) last week. This is one of the best run companies in the world. I expect the shares to rise from the current $178.51 to $1,000 in five years. Buy (NVDA) on dips.
Q1 GDP dives 1.5%, in its final read. It’s the worst quarter since the pandemic began during Q2 2022. Weekly Jobless Claims dropped 8,000 to 210,000.
My Ten-Year View
When we come out the other side of pandemic, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates still historically cheap, oil peaking out soon, and technology hyperaccelerating, there will be no reason not to. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The American coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 240,000 here we come!
With some of the greatest market volatility seen since 1987, my June month-to-date performance recovered to +2.49%.
My 2022 year-to-date performance exploded to 44.36%, a new all-time high. The Dow Average is down -9.37% so far in 2022. It is the greatest outperformance on an index since Mad Hedge Fund Trader started 14 years ago. My trailing one-year return maintains a sky high 65.40%.
That brings my 14-year total return to 556.92%, some 2.37 times the S&P 500 (SPX) over the same period and a new all-time high. My average annualized return has ratcheted up to 43.97%, easily the highest in the industry.
We need to keep an eye on the number of US Coronavirus cases at 84.7 million, up 300,000 in a week and deaths topping 1,000,000 and have only increased by 2,000 in the past week. You can find the data here.
On Monday, June 6 is the 78th anniversary of the D-Day invasion of Normandy. All of the veterans I knew have long since passed. I’ll miss the memorial this year.
On Tuesday, June 7 at 8:30 AM, the US Balance of Trade for April is released.
On Wednesday, June 8 at 10:30 AM, US Crude Inventories are published.
On Thursday, June 9 at 8:30 AM, Weekly Jobless Claims are out.
On Friday, June 10 at 8:30 AM, the blockbuster US Core Inflation Rate is announced. More importantly, the new dinosaur movie, Jurassic World: Dominion, is released. At 2:00 the Baker Hughes Oil Rig Count are out.
As for me, this is not my first Russian invasion.
Early in the morning of August 20, 1968, I was dead asleep at my budget hotel off of Prague’s Wenceslas Square when I was suddenly awoken by a burst of machine gun fire. I looked out the window and found the square filled with T-54 Russian tanks, trucks, and troops.
The Soviet Union was not happy with the liberal, pro-western leaning of the Alexander Dubcek government so they invaded Czechoslovakia with 500,000 troops and overthrew the government.
I ran downstairs and joined a protest demonstration that was rapidly forming in front of Radio Prague trying to prevent the Russians from seizing the national broadcast radio station. At one point, I was interviewed by a reporter from the BBC carrying this hulking great tape recorder over his shoulder, as I was the only one who spoke English.
It seemed wise to hightail it out of the country, post haste, as it was just a matter of time before I would be arrested. The US ambassador to Czechoslovakia, Shirley Temple Black (yes, THE Shirley Temple), organized a train to get all of the Americans out of the country.
I heard about it too late and missed the train.
All borders with the west were closed and domestic trains shut down, so the only way to get out of the country was to hitch hike to Hungary where the border was still open.
This proved amazingly easy as I placed a small American flag on my backpack. I was in Bratislava just across the Danube from Austria in no time. I figured worst case, I could always swim it, as I had earned both, the Boy Scout Swimming, and Lifesaving merit badges.
Then I was picked up by a guy driving a 1949 Plymouth who loved Americans because he had a brother living in New York City. He insisted on taking me out to dinner. As we dined, he introduced me to an old Czech custom, drinking an entire bottle of vodka before an important event, like crossing an international border.
Being 16 years old, I was not used to this amount of high-octane 40 proof rocket fuel and I was shortly drunk out of my mind. After that, my memory is somewhat hazy.
My driver, also wildly drunk, raced up to the border and screeched to a halt. I staggered through Czech passport control which duly stamped my passport. I then lurched another 50 yards to Hungary, which amazingly let me in. Apparently, there is no restriction on entering the country drunk out of your mind. Such is Eastern Europe.
I walked another 100 yards into Hungary and started to feel woozy. So, I stumbled into a wheat field and passed out.
Sometime in the middle of the night, I felt someone kicking me. Two Hungarian border guards had discovered me. They demanded my documents. I said I had no idea what they were talking about. Finally, after their third demand, they loaded their machine guns, pointed them at my forehead, and demanded my documents for the third time.
I said, “Oh, you want my documents!”
I produced my passport, When they got to the page that showed my age they both started laughing.
They picked me and my backpack up and dragged me back to the road. While crossing some railroad tracks, they dropped me, and my knee hit a rail. But since I was numb, I didn’t feel a thing.
When we got to the road, I saw an endless stream of Russian army trucks pouring into Czechoslovakia. They flagged down one of them. I was grabbed by two Russian soldiers and hauled into the truck with my pack thrown on top of me. The truck made a U-turn and drove back into Hungary.
I contemplated my surroundings. There were 16 Russian Army soldiers in full battle dress holding AK-47s between their legs and two German Shepherds all looking at me quizzically. Then I suddenly felt the urge to throw up. As I assessed that this was a life and death situation, I made every effort to restrain myself.
We drove five miles into the country and then stopped at a small church. They carried me out of the truck and dumped me and my pack behind the building. Then they drove off.
The next morning, I woke up with the worst headache of my life. My knee bled throughout the night and hurt like hell. I still have the scar. Even so, in my enfeebled condition, I realized that I had just had one close call.
I hitch-hiked on to Budapest, then to Romania, where I heard that the beaches were filled with beautiful women. My Italian let me get by passably in the local language.
It all turned out to be true.
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
One More Off to College
If You Don’t Like the Price, Don’t Use it
Mad Hedge Technology Letter
March 9, 2022
Fiat Lux
Featured Trade:
(NICKEL MARKET BECOMES HELLISH)
(JJN), (TSLA), (GM), (F)
Nickel (JJN) is essential for EV batteries, and that spells trouble for certain industries as the price of nickel explodes to the upside.
Projections between 2020 and 2037 reveal that global manufacturing of batteries for EVs and other new energy applications will rise tenfold.
That’s not a typo!
Recently, volatility was so high on nickel that London Metal Exchange, prompted a trading halt.
The price of nickel increased by 250% which many traders blamed directly on the war between Russia and Ukraine.
Unintended consequences have put shivers through the global economic system and higher prices of various types of metals will mean consumers will have less discretionary incomes.
Russia is one of the largest producers of nickel in the world, with miner Norilsk Nickel the number one producer of top-grade nickel globally.
If the metal were added to the sanctions list, it could severely shrink volume to Western suppliers and manufacturers.
EV batteries are one of the highest costs in producing an EV.
The price rise in nickel means that it will cost car manufacturers an extra $3,000 to produce the same car.
Costs are going up around the entire process of making an EV and the pain will be felt with a final sticker price substantially higher than today.
It is plausible that in 2 years we could experience a massive shortage which could exacerbate an already dire supply situation as demand continues to rise.
EVs are getting more popular as the quality of EVs produces gets better with each iteration.
No doubt Tesla helped popularize this type of car.
With the next biggest source of nickel being lower-grade Indonesian supply, and new nickel mines years away from getting online, the only logical conclusion is to bake in lower productivity from Western auto companies.
Ford (F) is planning to make 2 million EVs annually by 2026, GM (GM) hopes to sell 1 million EVs by mid-decade and launch 30 new EV models, and Stellantis plans to sell 5 million EVs by the end of the decade, with 25 new EV models on the way.
These companies are all catching up to Tesla (TSLA).
This will poo poo the momentum of the EV car movement temporarily which many believed would go into overdrive this year.
Once the business model supporting the case to make EVs becomes untenable, large car companies could pull back from these models until supply chains moderate.
Car companies aren’t in the business of building cars that lose money and now the unit economics have been thrown into chaos.
Uncontrollable costs to source raw materials for industrial battery makers such as LG Energy Solution, Panasonic, and Contemporary Amperex Technology Co will be passed to the end-user.
It will also make negotiations tougher with EV makers such as Tesla and Volkswagen. And it isn’t just nickel: Prices of cobalt and aluminum, two other key battery metals are grouped into this price surge as well.
U.S. President Joe Biden's solution for lower oil prices was to go out and buy an EV instead of buying gas at the pump. Well, that solution just became more costly and is rising by the day.
This effectively pushes the green movement further back and the high price of oil taking center stage is ruffling a lot of feathers for the American consumer that will have severe implications at the polls this November.
These costs headaches will also be a drag on EV stocks like Tesla in the short term because they simply won’t be able to deliver the volume of cars they planned to produce.
Mad Hedge Technology Letter
January 3, 2022
Fiat Lux
Featured Trade:
(TESLA SETS THE TONE)
(TSLA), (F)
The 87% year-over-year increase in Tesla deliveries this past quarter really sets the tone for Tesla for rest of 2022.
They are picking up where they left off last year and Tesla’s stock price at the end of the year could be substantially higher than it is now.
It’s been a while since I’ve heard from the Tesla haters — and if you remember correctly, there were angry flocks of them up until just recently.
But that’s what overperformance will do to the naysayers, ironically. They’ve never been this quiet, and rightly so, after crushing delivery expectations by 12%
In the same quarter last year, they registered 180,000 deliveries, and the math is stunning with the company adding an extra nominal 128,000 this past quarter to 308,000 units at a time where supply chain shocks and semiconductor shortages are rocking the EV industry.
This leads me to believe that if Tesla can carve out stellar performance at the height of snarled supply chains, imagine what they can do when the world isn’t clogged up.
We must take it seriously when management predicts 50% gains in deliveries year over year for the foreseeable future and what I mean by that is — multiyear.
Ultimately, there is a strong correlation between accelerating Tesla deliveries and an appreciating Tesla stock price and readers shouldn’t overcomplicate things.
The rest is just fluff and readers need to zone it out.
Readers also get the added bonus that Tesla easily outperforms the S&P benched against any standard metric and they are in online brokerage Robinhood’s top stocks to buy based on the data from their own traders.
The delivery beats against consensus are also widening for Tesla who just in 2020 was only able to overdeliver unit deliveries by 3%, which is no small feat, but the under-promising and over-delivering is getting more impressive by the quarter which is the hallmark of a great company with over 10% beats versus consensus the norm today.
The average consensus for gross 2022 deliveries of about 1.4 million looks highly attainable if Tesla can keep up at this clip, which I have faith they can.
Fortifying their already enviable position is the success of the Shanghai Gigafactory, and the potential to sell 60,000 Tesla’s to Chinese customers this year.
Gazing into our 2022 crystal ball, the EV story and the narrative underpinning it look healthy and, more importantly, sustainable.
Over the past decade, the EV market has gone from a drip of EV choices to a full-out avalanche of options on the US market these days.
Recent surveys back up the concept of insatiable thirst for new EV buyers, and higher oil prices have added an extra turbocharger to EV demand.
A private survey showed that the percentage of U.S. adults who say they would consider purchasing an EV in the next 10 years has seen active growth over the course of 2021, as announcements of new models and new charging infrastructure add gloss to the already emerging industry.
One might surmise that this could be the year of an EV inflection point when it comes to getting bums in EV seats.
This could be the year where the numbers gap up and put gas-powered engines in the rear-view mirror.
The number of options in 2022 starts from roughly 62 models currently available to at least 100 later this year.
But U.S. consumers love to buy pickup trucks, crossovers, and SUVs, and their dramatic arrival on the EV market is one of the main reasons 2022 could be unprecedented for adoption.
The next big blockbuster launch — Ford (F) is beginning production on its F-150 Lightning pickup truck in Spring 2022, giving consumers the option of purchasing an electric version of the best-selling car in the country.
58% of Gen Z and 60% of Millennials have shown a willingness to dip into the future EV market, and by that purchase time, options will be everywhere.
The one true knock against Tesla is the lack of developing a Tesla pick-up truck. Their much-hyped “Cybertruck” has been delayed now over a year to the end of 2022 because of continuous bumps in the supply chain.
This could turn out to be another cash cow for Tesla, with potential Cybertruck revenues topping $400 million in 2023, potentially rising to about $7 billion by 2026.
The takeaway from the Cybertruck project is that Tesla is still in the early stages of its growth cycle, and will be expanding at a 50% rate while ingratiating its diehard audience with more products than they can handle.
Tesla products are backlogged to the hills, try inputting a new Tesla X for online purchase, and their official website spits out an estimated delivery date of January 2023.
That’s how great this product is, so don’t diminish it or its ever-higher stock price.
It’s high for a reason and will be higher in the future.
Global Market Comments
October 4, 2021
Fiat Lux
Featured Trade:
(THE MAD HEDGE SUMMIT VIDEOS ARE UP),
(MARKET OUTLOOK FOR THE WEEK AHEAD, or IT’S SHOPPING TIME),
(MS), (GS), (JPM), (BLK), (BRKB), (C), (TLT), (F), (CRPT)
All indications are that we have a total nightmare of a Christmas coming up this year. Santa Claus and his elves can’t get any parts, and the reindeer are short of hay.
There are now a record 70 large container ships from China parked off the coast of Long Beach, CA and nobody to unload them. If they could be unloaded, there are no trucks to move the cargo or drivers to drive them. It turns out that stores don’t have enough staff to sell the products either.
You see this in share prices that are traditionally strong going into the holidays which have lately taken a pasting, like UPS (UPS) and FedEx (FDX).
Perhaps the US economy is losing up to a third of its total output due to parts and labor shortages. This will take at least a year to sort out.
Then there is the issue of 10 million missing workers. Are they afraid of dying of Covid? Or have they decided it’s time for a career change and that working for a minimum wage of $7.25 an hour is no longer worth it? This may take a decade to sort out.
Covid could be masking fundamental changes to the American economy and society which won’t become obvious until well into the 2030s.
Those of us who analyze these things can’t wait for the outcome. The global economy has just undergone more change than at any time since WWII. But what exactly happened we may not know for years.
Better to complete your Christmas shopping early this year or you may end up with a piece of coal in your stocking (where do I find coal in California?). And don’t forget to do some shopping for your retirement portfolio as well. Valuations are the best they have been in a year and this bull market in stocks has another nine years to run.
In the meantime, after dumping all of my technology stocks, I’ll be betting my entire persona net worth buying financial ones. These should lead the markets for the next six months, or until bond yields hit 2.0%, whichever comes first. Bonds now yield 1.46%.
With interest rates rising sharply, economic growth continuing at record levels, and default rates plunging, we are just entering a new golden age of banking.
Powell sees Inflation lasting higher for longer. It was enough to kill off a nascent rally in the bond market. The Dollar Store is about to become the $2 Store. Shortages from China are the reason.
Treasury Yields hit a three-month high. You can blame the coming taper, deal on a deficit-financed infrastructure bill, and drained Fed accounts against a coming massive supply of bonds. I’m already running a massive bond short. Keep selling rallies in the (TLT), or buy (TBT).
China bans Crypto, triggering a 7% plunge in Bitcoin. Financial systems the government can’t control are forbidden in the Forbidden City. It’s all part of a flight out of a restricted Yuan into unrestricted crypto by wealthy Chinese. China used to account for 99% of all Bitcoin mining and now it is at zero. The business will flock to the US, Canada, and any other country with cheap electricity. It’s a short-term negative for crypto but a long-term positive. Buy Bitcoin and Ethereum on the dip.
Case Shiller shatters all records, rising an astronomical 18.7% in June, a new record. Home prices are now 41% higher than the last peak in 2006. Phoenix was up an eye-popping 29.3%, San Diego by 27.1%, and Seattle by 25.0%. What are they putting in the water in these cities? My belief is that the structural shortfall of housing continues for another decade.
New Home Sales jump by 1.5% in August to a seasonally adjusted 740,000 units. The south saw the biggest gains at 6.0%. Median New Home Prices jumped an amazing 20.1% to 390,000 YOY. The exodus from the city to the burbs continues unabated. Inventory is at 6.1 months.
Pending Home Sales rocket, in August by 8.1% on a signed contract basis compared to only 1.2% expected. That’s a seven-month high. The Midwest led the charge with a 10.4% gain. Rising inventories and continued low interest rates were a big help. The bidding wars are abating.
China Energy Shortage causes Apple and Tesla cutback and they are buying 70% of America’s coal production to meet the shortfall. Several key chip packaging and testing service providers supplying Intel, Nvidia, and Qualcomm also received notices to suspend production at their facilities in Jiangsu for several days. It’s Another Black Swan from the Middle Kingdom.
The First Trust Skybridge Crypto Industry & Digital Economy ETF (CRPT) launched on September 23. It will be kicked off by my longtime friend and Mad Hedge Summit speaker Anthony Scaramucci. Get on the crypto train before it leaves the station.
Ford (F) announced massive $11.4 Billion in US EV factories in Kentucky and Tennessee in partnership with South Korea’s SK Innovations, creating 11,000 jobs. It is one of the largest US industrial investments in recent memory. It is all part of a plan to completely reposition the company and invest $30 billion in EVs by 2025. A smart move, (F) finally read the writing on the wall.
My Ten-Year View
When we come out the other side of pandemic, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates still at zero, oil cheap, there will be no reason not to. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The American coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 240,000 here we come!
My Mad Hedge Global Trading Dispatch saw a modest +1.03% gain in September. That’s against a Dow Average that was down -5.65% for the month. My 2021 year-to-date performance soared to 80.30%. The Dow Average was up 12.18% so far in 2021.
Figuring that we are either at or close to a market bottom, and being a man of my convictions, I am 80% invested in financial stocks. Those include (MS), (GS), (JPM), (BLK), (BRKB), and (C). In for a penny, in for a pound. I am also 10% invested in the (SPY) and 10% long bonds (TLT).
I quick trip by the Volatility Index (VIX) to $29 and a rapid 45 basis point leap in ten-year US Treasury bond yields gave us the entry point for all of these positions.
That brings my 12-year total return to 502.85%, some 2.00 times the S&P 500 (SPX) over the same period. My 12-year average annualized return now stands at an unbelievable 42.49%, easily the highest in the industry.
My trailing one-year return popped back to positively eye-popping 112.44%. I truly have to pinch myself when I see numbers like this. I bet many of you are making the biggest money of your long lives.
We need to keep an eye on the number of US Coronavirus cases at 44 million and rising quickly and deaths topping 701,000, which you can find here.
The coming week will be slow on the data front.
On Monday, October 4 at 10:00 AM, US Factory Orders for August are out.
On Tuesday, October 5 at 8:30 AM, the US Balance of Trade for August is announced.
On Wednesday, October 6 at 8:15 AM, we get the Challenger Private Jobs Report for September.
On Thursday, October 7 at 8:30 AM, Weekly Jobless Claims are announced.
On Friday, October 8 at 8:30 AM, we learn the September Nonfarm Payroll Report. At 2:00 PM, the Baker Hughes Oil Rig Count are disclosed.
As for me, in my many travels around the world, I never hesitate to visit places of historical interest. The London grave of Carl Marx, the Paris grave of Jim Morrison, the bridge of the cruiser of the USS San Francisco, which took a direct hit from an 18-inch Japanese shell, you name it.
After attending one of my global strategy luncheons in Charleston, South Carolina, where the Civil War began with the Confederates firing on Fort Sumter in 1861, I looked for something to do. Fort Sumter was a full day trip and there wasn’t much to see anyway.
So I pulled out my trusty iPhone to get some ideas. It only took me a second to decide. I attended Sunday church services at the Mother Emanuel African Methodist Episcopal Church, where 15 people were gunned down by a deranged white nationalist in 2014.
The church was built in 1891 by freed slaves and their children. The congregation dates back earlier to 1791. It has every bit a handmade touch with fine Victorian stained-glass windows.
The ushers stopped me at the door for 20 minutes where they suspiciously eyed me. Then they invited me in and sat me down next to the only other white person there, a Jewish woman from New York.
It was a working-class congregation and polyester suites and print dresses were the order of the day. Everyone was polite, if not respectful, and I sang the hymns with the air of a book in the pew in front of me.
The gospel singing was incredible, if not angelic. When I left, an usher thanked me for supporting their cause. Very moving. I praised them for their strength and tossed a $100 bill into the basket.
Charleston is a big wedding destination now, with young couples pouring in from all over the South to tie the knot. Saturday night on Market Street saw at least a dozen bachelor and hen parties going bar to bar and getting wasted, the women falling off their platform shoes.
The United States still has a lot of healing to go to recover from the recent years of turmoil. I thought this was one small step.
Mother Emanuel African Methodist Episcopal Church
Punting in Cambridge
Global Market Comments
July 29, 2021
Fiat Lux
Featured Trade:
(TESTIMONIAL),
(HOW TO GAIN AN ADVANTAGE WITH PARALLEL TRADING),
(GM), (F), (TM), (NSANY), (DDAIF), BMW (BMWYY), (VWAPY),
(PALL), (GS), (RSX), (EZA), (CAT), (CMI), (KMTUY),
(KODK), (SLV), (AAPL)
Global Market Comments
April 1, 2021
Fiat Lux
Featured Trade:
(MARCH 31 BIWEEKLY STRATEGY WEBINAR Q&A),
(FB), (ZM), ($INDU), (X), (NUE), (WPM), (GLD), (SLV), (KMI), (TLT), (TBT), (BA), (SQ), (PYPL), (JNP), (CP), (UNP), (TSLA), (GS), (GM), (F)
