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April 3 Biweekly Strategy Webinar Q&A

Below please find subscribers’ Q&A for the April 3 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Key West, Florida.

Q: What’s going on with gold (GLD)?

A: Well it’s simple; gold hasn’t moved in a year and people want to rotate out of big tech into something that hasn’t moved. Gold has a great long-term story if interest rates fall and if central banks continue to accumulate gold. We could go up quite a lot from here; my goal right now is 3,000/oz by the end of next year.

Q: Are ETFs or single stocks a better buy right now?

A: ETFs are baskets, tend to have high fees, and tend to move at half the rate of single stocks. Single stocks can go up a lot faster and have a lot more risk. So if I have a strong feeling about a particular asset class like gold or silver, I'll go ahead and buy single stock names directly like Barrick Gold (GOLD) and Wheaton Precious Metals (WPM) because I know I’ll get a multiple of the performance of a basket of gold companies.

Q: Ford Motor Co. (F) seems like a better play than Tesla (TSLA) this year. What is your opinion?

A: You’re absolutely wrong, Tesla is a fantastic buy down here, once the EV nuclear winter ends. Tesla could rise a multiple from here—Ford probably not so much. Notice also that GM saw sales fall by 1.5% in the first quarter of this year. Tesla just has the technology; Ford and GM don’t. The long-term outlook for the ICE companies is grim. They have millions invested in internal combustion engine factories, which very soon will be worth nothing more than scrap metal.

Q: Do you have a long-term target on the downside for Tesla (TSLA)?

A: Well I’m currently long the April $140-$150 vertical bull call debit spread that expires in 10 days. To get a price lower than $140, you need to get drastically worse news, which I don't think we’ll get. I think we’re bottoming out right around here; Tesla’s already down 62% from an all-time high. During the pandemic, it dropped 80%.

Q: What is the chance that inflation returns, and what happens if it does?

A: Interest rates rise, and the Fed postpones interest rate cuts even further. However, I don’t think that’s going to happen, because technology and artificial intelligence are having such a huge deflationary impact on the economy that any bad news about inflation will be short-term, and we are in a long-term trend going down.

Q: How does falling Fed QT affect interest rates?

A: It causes them to go down because it means the Fed is selling less of its bond holdings into the market. This means they’re taking less money out of the financial system, meaning liquidity is increasing, which is good for all risk assets. I think the stock market has noticed this by going up almost every day so far this year. So, just as quantitative easing was great for the economy and the stock market, the quantitative tightening was terrible, and the fact that they’re ending it is good for all risk assets.

Q: Where do you see the price rising for iShares 20+ Year Treasury Bond ETF (TLT)?

A: 110 by the end of the year, but we might have another $1.00 or $2.00 of downside first. If you get down to $90 or so, I’ll be knocking out the trade alerts to buy call spreads as fast as I can write them. But first let’s let (TLT) find its new level, and interest rates find their new high.

Q: What is a barbell?

A: A barbell is where we have overweight sections in two parts of the market; one is technology and one is domestic recovery plays. We have nothing in most sectors in between. That’s what we’ve been doing for years, and it works pretty well because you always have something that’s going up. That’s why it’s called a barbell.

Q: If you were doing a new LEAP on Wheaton Precious Metals (WPM), what would you do?

A: I would do an at-the-money, which at this point would be June 2025 $50-$53 verticals bull call spread LEAPS, and I would go out at least a year, probably a year and a half because we’ve just had a very big run in Wheaton Precious Metals—about 25%. LEAPS are things you do at market bottoms, not at market tops. A reversal can be very expensive—they can literally go to zero on you.

Q: What do you think will be the next asset class investors will rotate into after commodities?

A: Big technology. We’re going to be going back and forth between the two sectors probably for years. So, I think tech needs a time correction of several months, where commodities and precious metals and energy will run free, and eventually, they’ll get overbought and want to take a rest, and then everyone rotates back into big tech. In the meantime, big tech and AI are moving forward with their technology.

Q: Why has Carnival Corp (CCL) had such a terrible stock performance, even though they’re having record sales and full ships?

A: They have huge amounts of debt leftover from the pandemic, which they got both from the government and the private sector. If they hadn’t done that, they’d have gone bankrupt, and it’s going to take a long time to pay off all that debt, even though it was at interest rates that were quite low. Plus, if they have to refinance any of that, that can get expensive too because the old loans are at zero or 1%, and the new loans are going to be like 6%, 7%, or 8%. So that has been a drag on Carnival Cruise Lines.

Q: What is a time correction?

A: A time correction is when the stock goes sideways for a period of time without going anywhere because nobody wants to sell it, everyone is bullish, and they’re willing to wait for the next leg up in the bull market. In the meantime, money rotates into other stocks that are moving, like commodities, precious metals, and energy.

Q: Should we take profits off of Barrick Gold (GOLD) after the recent runup, or does it have some more room to go into the upside?

A: Only if you’re a short-term trader do you want to take advantage of the recent run-up in Barrick Gold. I, however, think the stock could go up another $10 or $20 by the end of the year. I am quite happy to hold on. In fact, on any dips or weak days, I am adding to my position, not looking to run it down.

Q: What do you expect for oil prices?

A: I think we go to the top of the multi-year $62-$95 range and I’m going to run my longs in (XOM) and (OXY) until then.

Q: What do you think of Ken Griffin’s criticism of the US national debt growing at such a fast pace?

A: I’ve been hearing about the national debt for my entire life, since I was 3 years old and my grandfather would lecture me about the national debt, back when it was a pittance compared to what it is now. The fact is, growing national debt seems to have zero impact on any risk asset whatsoever. Stocks are at all-time highs, real estate is at all-time highs and rising, and the dollar is at all-time highs when rising debt was supposed to crush the dollar. The actual fact is that 80% of all the national debt was run up by Republican presidents, so to see Republicans complain about rising debt, especially our most recent president who increased it by $10 trillion is somewhat ironic. The fact s that the national debt is the result of four big tax cuts for billionaires that took place under Kennedy (1960), Reagan (1984), Bush (2002), and Trump (2017), so it’s also ironic that billionaires like Griffin and Paul Tudor Jones are complaining the loudest. They all sound like Cassandras—warning that the sky is falling, but it never seems to happen. In the meantime, I would buy bonds, because they’re not worried about national debt either.

Q: Can Bitcoin go higher after the halving in April?

A: No, the halving is in the price. All of the Bitcoin marketers have been selling you Bitcoin based on that halving for a year now. So the actual halving is going to be a classic “buy the rumor, sell the news” type move.

Q: What do you consider a dip?

A: It’s different for every stock depending on its volatility. It could be 5% for a boring stock, or 20% for something like Nvidia (NVDA).

Q: Does commercial real estate present a systematic risk to the financial markets?

A: No, commercial real estate is only 5% of the loan portfolios of the big banks, and maybe 1% of that will go under. It’s just a normal year of losses for the banks. As for regional banks, they’re the ones that will get hit; they’ll have to do deals to get bought up by the big banks. This is why I think we’re in the process of going from 4,000 banks in the United States to only 6.

Q: Is $100/barrel for oil back in play?

A: No, but $95 is, which is why I went long ExxonMobil (XOM) and Occidental Petroleum (OXY). So, it’s kind of late to get involved here on this trade, but if you are long oil, I would keep it and squeeze the last bit of juice out of those lemons.

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 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

April 4, 2024

Diary, Newsletter, Summary

Global Market Comments
April 4, 2024
Fiat Lux

Featured Trade:

(A NOTE ON OPTIONS CALLED AWAY),
(FCX), (XOM), (OXY), (WPM), (TSLA)

A Note on Assigned Options, or Options Called Away

Diary, Newsletter

Occasionally, I get a call from Concierge members asking what to do when their short position options are assigned or called away. The answer was very simple: fall down on your knees and thank your lucky stars. You have just made the maximum possible profit for your position instantly.

We have the good fortune to have SIX spreads that are deep in the money going into the APRIL 19 option expiration in 11 days. They include:

(FCX) 4/$37-$40 call spread

(XOM) 4/$100-$105 call spread

(OXY) 4/$59-$62 call spread

(WPM) 4/$39-$42 call spread

(TSLA) 4/$140-$150 call spread

(GLD) 4/$194-$197 call spread

In the run-up to every options expiration, which is the third Friday of every month, there is a possibility that any short options position you have may get assigned or called away.

Most of you have short-option positions, although you may not realize it. For when you buy an in-the-money vertical option spread, it contains two elements: a long option and a short option.

The short options can get “assigned,” or “called away” at any time, as it is owned by a third party, the one you initially sold the put option to when you initiated the position.

You have to be careful here because the inexperienced can blow their newfound windfall if they take the wrong action, so here’s how to handle it correctly.

Let’s say you get an email from your broker telling you that your call options have been assigned away. I’ll use the example of the Freeport McMoRan (FCX) April 2024 $37-$40 in-the-money vertical BULL CALL debit spread.

For what the broker had done in effect is allow you to get out of your call spread position at the maximum profit point 10 trading days before the April 19 expiration date. In other words, what you bought for $2.60 on March 4 is now $3.00!

All you have to do is call your broker and instruct them to exercise your long position in your (FCX) April 37 calls to close out your short position in the (FCX) April $40 calls.

This is a perfectly hedged position, with both options having the same expiration date, and the same amount of contracts in the same stock, so there is no risk. The name, number of shares, and number of contracts are all identical, so you have no exposure at all.

Calls are a right to buy shares at a fixed price before a fixed date, and one option contract is exercisable into 100 shares.

To say it another way, you bought the (FCX) at $37 and sold it at $40, paid $2.60 for the right to do so, so your profit is $0.40 cents, or ($0.40 X 100 shares X 40 contracts) = $1,600. Not bad for a 30-day defined limited-risk play.

Sounds like a good trade to me.

Weird stuff like this happens in the run-up to options expirations like we have coming.

A call owner may need to buy a long (FCX) position after the close, and exercising his long April $40 call is the only way to execute it.

Adequate shares may not be available in the market, or maybe a limit order didn’t get done by the market close.

There are thousands of algorithms out there that may arrive at some twisted logic that the calls need to be exercised.

Many require a rebalancing of hedges at the close every day which can be achieved through option exercises.

And yes, options even get exercised by accident. There are still a few humans left in this market to make mistakes.

And here’s another possible outcome in this process.

Your broker will call you to notify you of an option called away, and then give you the wrong advice on what to do about it. They’ll tell you to take delivery of your long stock and then most additional margin to cover the risk.

Either that, or you can just sell your shares the following Monday and take on a ton of risk over the weekend. This generates a oodles of commission for the brokers but impoverishes you.

There may not even be an evil motive behind the bad advice. Brokers are not investing a lot in training staff these days. It doesn’t pay. In fact, I think I’m the last one they really did train 50 years ago.

Avarice could have been an explanation here but I think stupidity, poor training, and low wages are much more likely.

Brokers have so many legal ways to steal money that they don’t need to resort to the illegal kind.

This exercise process is now fully automated at most brokers but it never hurts to follow up with a phone call if you get an exercise notice. Mistakes do happen.

Some may also send you a link to a video of what to do about all this.

If any of you are the slightest bit worried or confused by all of this, come out of your position RIGHT NOW at a small profit! You should never be worried or confused about any position tying up YOUR money.

Professionals do these things all day long and exercises become second nature, just another cost of doing business.

If you do this long enough, eventually you get hit. I bet you don’t.

Calling All Options!

April 3, 2024

Tech Letter

Mad Hedge Technology Letter
April 3, 2024
Fiat Lux

Featured Trade:

(TESLA ON THE BACK FOOT)
(TSLA)

Tesla On The Back Foot

Tech Letter

Peak Tesla?

It sure seems like it.

I don’t want to jinx the company, but it is highly likely that it is passed its best.

The data is looking increasingly gloomy and could set the stage for an even larger drop into irrelevance.

In short, it’s definitely not looking too bright for the company that Elon Musk built.

Tesla only delivered 386,810 vehicles from January through March 2024, almost 9% below the 423,000 it sold in the same quarter of last year.

The drop in sales makes Apple's diminishing demand look like a drop in an ocean.

EV competition is catching up and demand has wavered as consumers’ cash is tangled up in other parts of the economy namely necessities.

Then there is the realization that the giant first wave of EV adoptees is a barren second wave.

The second wave might not even come at all and if it does, it could be years down the road when Tesla is forced to pour billions into developing a new “killer” EV.

Even someone like my oldest son is not interested in EVs and rather drive combustion-engine-based Ferraris or Lamborghinis.

EVs aren’t for everyone and the industry didn’t budget or scale for that scenario.

The EV industry always thought there would be a horse drinking from the bucket.

Are its EVs going stale or is the style just outdated at this point?

I know tech moves on quickly, but this would set new records.

High interest rates have also put a dent into demand as financing a Tesla isn’t what it used to be.

Just a few months ago, CEO Elon Musk posted that “most people don’t love to buy cars in the middle of winter” as he offered a $1,000 incentive. Tesla has also begun experimenting with advertising and has gone to greater lengths to educate consumers about its lineup.

Tesla never used to reach out to consumers.

Their cars used to sell themselves.

Remember when Tesla refused to sell their cars in dealerships and thought just put them online and they would fly off the shelves.

The Model Y sport utility vehicle and Model 3 sedan accounted for 96% of deliveries in the fourth quarter.

Tesla expanded its offerings late last year with the introduction of the stainless steel-clad Cybertruck in the US.

Despite the challenges, Tesla still managed to reclaim its title as the world’s largest EV seller after being surpassed by China’s BYD Co. at the end of last year.

Tesla encountered bottlenecks in its operation last quarter such as Houthi militia attacks that disrupted its component supply in the Red Sea, leading to a temporary halt in production at its German factory.

Management and service staff are keen to demonstrate the latest version of the company's premium driver assistance system, marketed as Full Self-Driving, which still requires driver supervision.

Tesla's stock has been nose-diving while the rest of big tech has pulled away from the laggards.

The EV maker has lost around a third of its value and it seems like there is no end in sight.

If any readers are interested in investing in big tech now, then I would avoid Tesla and go into something more aligned with AI.

Tesla will need to pour billions into revamping its competitive advantage and the stock should suffer in the short-term.

March 29, 2024

Diary, Newsletter, Summary

Global Market Comments
March 29, 2024
Fiat Lux

Featured Trade:

(A NOTE ON OPTIONS CALLED AWAY),
(TLT), (FCX), (XOM), (OXY), (WPM), (TSLA) (FCX)

A Note on Assigned Options, or Options Called Away

Diary, Newsletter

Occasionally I get a call from Concierge members asking what to do when their short positions options were assigned or called away. The answer was very simple: fall on your knees and thank your lucky stars. You have just made the maximum possible profit for your position instantly.

We have the good fortune to have SEVEN spreads that are deep in the money going into the APRIL 19 option expiration. They include:

(TLT) 4/$87-$90 call spread

(FCX) 4/$37-$40 call spread

(XOM) 4/$100-$105 call spread

(OXY) 4/$59-$62 call spread

(WPM) 4/$39-$42 call spread

(TSLA) 4/$140-$150 calls spread

(FCX) 4/48-$51 put spread

In the run-up to every options expiration, which is the third Friday of every month, there is a possibility that any short options positions you have may get assigned or called away.

Most of you have short-option positions, although you may not realize it. For when you buy an in-the-money vertical option spread, it contains two elements: a long option and a short option.

The short options can get “assigned,” or “called away” at any time, as it is owned by a third party, the one you initially sold the put option to when you initiated the position.

You have to be careful here because the inexperienced can blow their newfound windfall if they take the wrong action, so here’s how to handle it correctly.

Let’s say you get an email from your broker telling you that your call options have been assigned away. I’ll use the example of the Freeport McMoRan (FCX) April 2024 $37-$40 in-the-money vertical BULL CALL debit spread.

What the broker had done in effect is allow you to get out of your call spread position at the maximum profit point 10 trading days before the April 19 expiration date. In other words, what you bought for $2.60 on March 4 is now $3.00!

All you have to do is call your broker and instruct them to exercise your long position in your (FCX) April 37 calls to close out your short position in the (FCX) April $40 calls.

This is a perfectly hedged position, with both options having the same expiration date, and the same amount of contracts in the same stock, so there is no risk. The name, number of shares, and number of contracts are all identical, so you have no exposure at all.

Calls are a right to buy shares at a fixed price before a fixed date, and one option contract is exercisable into 100 shares.

To say it another way, you bought the (FCX) at $37 and sold it at $40, paid $2.60 for the right to do so, so your profit is $0.40 cents, or ($0.40 X 100 shares X 40 contracts) = $1,600. Not bad for a 30-day defined limited-risk play.

Sounds like a good trade to me.

Weird stuff like this happens in the run-up to options expirations like we have coming.

A call owner may need to buy a long (FCX) position after the close, and exercising his long April $40 call is the only way to execute it.

Adequate shares may not be available in the market, or maybe a limit order didn’t get done by the market close.

There are thousands of algorithms out there that may arrive at some twisted logic that the calls need to be exercised.

Many require a rebalancing of hedges at the close every day which can be achieved through option exercises.

And yes, options even get exercised by accident. There are still a few humans left in this market to make mistakes.

And here’s another possible outcome in this process.

Your broker will call you to notify you of an option called away, and then give you the wrong advice on what to do about it. They’ll tell you to take delivery of your long stock and then most additional margin to cover the risk.

Either that, or you can just sell your shares on the following Monday and take on a ton of risk over the weekend. This generates oodles of commission for the brokers but impoverishes you.

There may not even be an evil motive behind the bad advice. Brokers are not investing a lot in training staff these days. It doesn’t pay. In fact, I think I’m the last one they did train 50 years ago.

Avarice could have been an explanation here but I think stupidity and poor training and low wages are much more likely.

Brokers have so many legal ways to steal money that they don’t need to resort to the illegal kind.

This exercise process is now fully automated at most brokers but it never hurts to follow up with a phone call if you get an exercise notice. Mistakes do happen.

Some may also send you a link to a video of what to do about all this.

If any of you are the slightest bit worried or confused by all of this, come out of your position RIGHT NOW at a small profit! You should never be worried or confused about any position tying up YOUR money.

Professionals do these things all day long and exercises become second nature, just another cost of doing business.

If you do this long enough, eventually you get hit. I bet you don’t.

Calling All Options!

March 22, 2024

Diary, Newsletter, Summary

Global Market Comments
March 22, 2024
Fiat Lux

Featured Trade:

(MARCH 20 BIWEEKLY STRATEGY WEBINAR Q&A),
(DIS), (GLD), (BITB), (UUP), (FXY), (F), (TSLA), (NVDA), (FCX), (UNG), (TLT), (MCD)

March 20 Biweekly Strategy Webinar Q&A

Diary, Newsletter

Below please find subscribers’ Q&A for the March 20 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Silicon Valley.

Q: Do you recommend a form of dollar-cost averaging, and what is it?

A: Absolutely, yes. It is impossible for anybody to get an absolute bottom when you're buying, so the best thing to do is time average. If you have a position you like, go in there every day and buy a little piece. I bought Nvidia (NVDA) practically every day for months and boy did that work! (NVDA) had already gone up a lot, but I just kept buying it and buying it, averaging up and up. So that is the way I dollar-cost average. It's really more of a time averaging than a price averaging. No one knows where tops and bottoms are, even if they promise you that they do.

Q: Are you still long the Yen (FXY) and shorting the Dollar (UUP) given current conditions?

A: I actually don’t have any positions in the currencies, because the volatility is so low compared to stocks. Suffice to say that over time when US interest rates go down, currencies should go up, especially the Yen, which has been depressed for such a long time.

Q: Can gold (GLD) and Bitcoin (BITB) go up at the same time?

A: Absolutely. They almost always go up at the same time, because they are liquidity-driven assets, and when liquidity is as rich as it is now, all liquidity-driven assets go up at the same time which includes gold, silver, and Bitcoin and other cryptos. The only difference this time is that the source of liquidity is not the Federal Reserve—in fact, the Fed is quite restrictive right now with their high-interest rate policy—the new source of liquidity is corporate profits, especially from technology stocks, and that is unlimited and not subject to political whims. It’s always there and it’s always growing; it's a much better form of liquidity than the old form from the US government.

Q: What are your thoughts on the Disney (DIS) and Peltz fight, and how should that affect the stock price?

A: Whenever Nelson Peltz gets involved in a company, it's almost always positive for the stock even if he makes boards uncomfortable. That's why he's going in—to force better management. He usually succeeds and then gets out at a higher price. And if it means forcing some things on management they don't like (and I'm not really sure in the case of Disney what it is he's pressuring them for), he gets his profit and he leaves, and that's what corporate raiders do.

Q: Should I buy the dip in the EV narrative?

A: Not yet. You need a global economic recovery for that to happen, especially in Europe and China. We forget how prosperous we are here, and how weak things are in pretty much the rest of the world—and that is where the EV sales have really collapsed. So let the burden of proof be on the EV companies to report better sales and better technology, and then I'll be back in. Tesla periodically has 80% corrections: we’re right at the tail end of one of those. We may have another 10% to go and that's it. I'm a fair-weather friend, I only like to be long stocks when they're going up. How about that?

Q: I am understanding correctly that you believe the transition from technology and semiconductors to commodities and elsewhere is actually showing long-term strength growth for the tech stocks since they are mostly going sideways from here and not crashing with the rotation.

A: What I see is a time correction in technology where after tremendous moves they go sideways for a period, and new money switches over to other sectors like commodities and energy. And then you'll have a rotation back into technology after they've had a rest, probably before the end of the year. This back-and-forth kind of action could go on for many years—I've seen this happen before. So that's what I'm trying to position for now. And you know, I'm not alone in saying I don't like buying stocks after they tripled in a year. It's almost a no-win trade if you're a professional manager.

Q: Are we heading towards $90 a barrel in oil (USO), and will we pass $100?

A: Yes, we’re definitely headed to $90. But I think the new range is sort of like $65 to $95 because when you get up to the high prices, all of a sudden supply starts coming out of the woodwork, especially from the United States, which is already the world's largest oil producer at 13 million barrels a day. As soon as you get a high price, money just starts pouring in to start new drilling, setting up the next price collapse. The United States is the cap on global oil prices and China is the floor. They come in as the buyer of last resort as the world's largest consumer whenever prices get super cheap, and that actually is a best-case scenario—not only for us but for OPEC. Because their investments do well in the US when oil is in a $65 to $95 range. Any higher than that, the stock market crashes, wiping out the value of their savings. And that is how the modern world has evolved.

Q: Will today's Fed meeting be a non-event?

A: Yes, no interest rate changes until June, maybe even later. And the market is basically telling us that—dead in the water as it is. Dow is nowhere, and there are no big moves. Everyone is just treading water here.

Q: Would you take profits on NVIDIA (NVDA)?

A: Yes, some profits. I structured my own personal portfolio so I have expiring front month short put positions, which are ringing the cash register every month, but my long-term LEAPS I'm keeping. Because I think you could have another 50% move up in a year in (NVDA) stock given their dominant position in the market, and the fact that the new Blackwell chip, the $40,000 Blackwell chip is taking over the world. It's essentially a computer on its own, and it writes its own software. Nobody else is close to that, nor will they be. So keep the long-term positions to LEAPS, and keep taking profits every month. And you have to keep in mind also that (NVDA) is almost every portfolio manager's larger single position through capital appreciation, or they're not in it at all, and they're looking for a job or driving an Uber cab somewhere.

Q: Should I buy Ford (F) or Tesla (TSLA) or both?

A: Wait for the market to start discounting the Tesla Model 2 when it comes out next year. Maybe you start buying the stock in 6 months or a year. Probably the better question is not Ford or Tesla, but Tesla or Rivian (RIVN), which seems to be making progress in their mass production. I just don't see any future for the legacy car companies at all. They're just so far behind in technology. I spent most of my life trying to tell them what to do, and if they had followed my advice, they would be much better off than now.

Q: How long can an employment number stay strong? I feel like we have been waiting for a recession for almost 5 years now.

A: Actually the last real recession was the pandemic in 2020, which only lasted a couple of quarters. We may not have another real recession for 5 or 10 years. Why? Because we're in the roaring twenties and we have 6 more years to go. We also are in the new American Golden Age, and who's been predicting that for the last 10 years? I have! It's all about demographics. We happen to have peak spenders, i.e. people in their thirties and forties, at all-time highs, and that is what drives the economy—that is what makes the golden ages predictable as they have been for hundreds of years.

Q: How are the stem cell injections working?

A: Fantastic. After I got shot in the hip last year in Ukraine, I got one and I literally was walking around in weeks and eliminated the pain completely. I went from talking about hip replacement to climbing Kilimanjaro in literally a matter of weeks. So yes, they work for me. I know they don't work for everyone, but I've used them on both my knees, my back, and my hip, and they've been wildly successful. I won't need any more stem cell injections until I go back to Ukraine and get shot again.

Q: Where are you traveling to this time?

A: I’ll be working out of Florida during April, and probably take the quickie trip to Cuba. After that, it's Ecuador and the Galapagos Islands where I want to challenge Darwin’s Theory of Evolution. It turns out that it is in the same time zone as New York, so it'll be easy to work there from a time zone point of view. The Space X Starlink has provided great Internet everywhere, the Galapagos and Ukraine.

Q: Our real estate commission is about to disappear. Will that benefit housing prices?

A: You get what you pay for. If you have commissions drop from 6% to 1%, you'll get 1% worth of the service out of your agent. So if you want your house sold and sold well, you’d better keep paying the commission. Otherwise, your agent will not work for it. You get what you pay for. However, I always thought real estate commissions were too high for too long, and that may be about to change. And if you don't believe me, try selling your house on the internet someday. It doesn't work.

Q: Does the US have the infrastructure for electrification?

A: No, it does not. That means it has to be built out, and that is why we own Freeport McMoRan (FCX) and you should too! Anything involving electrification involves a lot of copper. The grid has to double in size to accommodate the needs of AI.

Q: Should I continue with natural gas (UNG)?

A: If you have a long-term position I would hang on because you're only one cold snap away from a major rally, and at some point, China will come back on stream as a major buyer. So long term I would hold it. Short term positions I would get rid of it before accelerated time decay wipes out your position.

Q: Will the US 10-year Treasury bond (TLT) go below 4% again?

A: Yes, when you get the Fed on an interest rate cutting cycle, 4% is easy; and by the way, home mortgages will be much cheaper in a year, so it's probably not a bad idea if you're buying a home now to take an adjustable-rate mortgage (ARM) then refinance after the Fed finishing cutting rates.

Q: Should I buy the dip in McDonald's (MCD)?

A: Probably not. The concern there is that the weight loss drugs are destroying American appetites and reducing their need for fast food. Eventually, some 100 million Americans could end up taking weight loss drugs. So that's why the stock is sold off. Fundamentally, (MCD) is a low-margin retail play so it's never interested me. The good news is that they're cutting jobs with computers. So that is the only reason to buy it, is the computerization effort. Walk into a new McDonald’s and you can only order by computer. The people there don’t even know how to take a verbal order. This is even more widespread in Europe where labor costs are higher.

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Good Luck and Stay Healthy,

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