When I pioneered fracking technology in Texas years ago, skeptics said we were crazy. Today's skeptics are saying the same thing about CRISPR Therapeutics (CRSP), and they're just as wrong.
Here's a company sitting on a $1.9 billion cash fortress, burning through a mere $100 million per quarter – giving them enough runway to circle the Earth 19 times – and yet the stock has drifted down to $40, shedding 15% since my last analysis when it was perched at $48.
Talk about the market missing the forest for the trees.
Remember when everyone thought Amazon (AMZN) was just a bookstore? Well, CRISPR Therapeutics isn't just another biotech company – it's the Tesla (TSLA) of gene editing, with Vertex Pharmaceuticals (VRTX) riding shotgun.
And just like Tesla wasn't just about making electric cars, CRISPR isn't just about Casgevy, their FDA-approved treatment for Sickle Cell Disease (SCD) and Transfusion-Dependent Beta Thalassemia (TDT).
Speaking of Casgevy, let's tackle the elephant in the room. Yes, patient enrollment has been slower than a government committee deciding on lunch options. They've collected cells from over 50 patients by year-end, up from 20 in mid-October.
Not exactly setting speed records, but here's what the market is missing: the Centers for Medicare and Medicaid Services just inked a deal with Vertex/CRISPR that could be a game-changer.
Why? Because 50-60% of SCD patients are on Medicaid.
But wait, there's more happening behind the scenes. The company has been quietly building an empire across 5 clinical programs and 10 preclinical programs.
Let's break down what's cooking in their kitchen.
The Casgevy rollout has expanded from 35 treatment centers in October to over 50 by year-end.
Eight jurisdictions have given them the green light, including Saudi Arabia – a market where SCD is about as common as sand.
The UK just signed on for reimbursement, first for TDT in August 2024, and now for SCD.
Their CAR-T program isn't just targeting blood cancers anymore. They've expanded into autoimmune diseases like Systemic sclerosis (SSc) and Idiopathic inflammatory myopathy (IIM).
We're talking about potential treatments for 2.5 million SSc patients globally (125,000 in the US) and 1 million IIM patients (50,000 in the US).
That's not just a market – it's an ocean.
They're even taking shots at liver cancer and cardiovascular diseases. Their latest trial for Heterozygous familial hypercholesterolemia could be a lifeline for patients with this genetic cholesterol disorder.
And speaking of cash runways, their $1.9 billion war chest means they can keep this scientific symphony playing for 19 quarters without passing around the collection plate.
In biotech terms, that's like having enough food to last through three winters.
Institutions are noticing, too. Cathie Wood just backed up the truck, dropping $10 million more into CRISPR, making it her 9th largest holding at $350 million. Her ARK funds now own over 9% of the company.
When smart money moves like this, I pay attention.
Here's the kicker: While most analysts raise their ratings as speculative stocks climb (a strategy that makes as much sense as buying umbrella futures during a drought), I'm doing the opposite.
After all, the fundamentals are stronger than ever, but the price is lower.
Looking ahead to 2025, we've got more potential catalysts than a chemistry textbook. Phase 1/2 trial data for CTX 112 is coming in Q2/Q3, CTX 131 in Q3/Q4, and updates on their Type 1 Diabetes program in the second half of the year.
Remember, this is the same company that has Vertex Pharmaceuticals – the biotech equivalent of having Warren Buffett as your investment advisor – as a partner.
They're not just getting financial support; they're getting a masterclass in how to commercialize breakthrough treatments.
The verdict? Load up on shares while the market gives us this gift wrapped in fear and uncertainty.
Twenty years ago, they called us crazy for thinking we could extract oil from solid rock. Today, they're just as skeptical about editing genes.
History has a funny way of repeating itself.
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The current government's economic policy reminds me a lot about the Marine Corps boot camp. Through harsh treatment and rigorous training, the Marines seek to destroy incoming recruits. They then spend 13 weeks rebuilding a new soldier from scratch who is obedient,respectful, follows orders, and is in much better physical condition. He is also a pretty good shot.
Since Trump inherited an almost perfect economy, with 3% real GDP growth, 2.8% inflation, and 4% unemployment, he has to break it first. Then he can spend the next four years rebuilding it and take credit for the recovery.
It looks like we are going to get more on the destruction front this week, with the US announcing European tariffs, which tanked stocks on Friday. We could remain in the destruction phase for the rest of the year. It sets up nicely at least a 20% correction sometime in 2025. Oh, and never buy on a Friday. All of the “shock and awe” announcements are occurring on the weekends. Wait for the Monday morning opening and buy the collapse.
It’s pretty clear that markets hate all things tariff-related. Can we please talk more about deregulation, which markets love? The reality is that markets don’t know how to price in Trump, swinging back and forth between euphoria one moment to Armageddon another. Best case, markets flat line. Worst case, they crash.
Here are some additional causes for concern. Big Tech was the only stock market sector that saw net inflows in 2024. It was also the only down sector in January. It just so happens to be the most overweight sector among almost all individuals and institutions, including yours. Big Tech now accounts for 35% of stock market capitalization. It is a concentration on steroids. So when we finally DO get a correction, it will be a big one, easily more than 10%.
Looking at stock market performance around the world since the 2008-09 financial crisis, it’s easy to see where the idea of American exceptionalism comes from. Since 2010, the German stock market (EWG) is up by 142% and the UK (EWU) by 112%. During the same 15-year period, the S&P 500 (SPY) soared by 1,112%, an outperformance of an eye-popping 8:1.
Since the beginning of 2025, the German stock market (EWG) is up by 12.7% and the UK (EWU) by 9%. In the meantime, the S&P 500 has managed a mere 3.5% gain. What has happened? Has something changed? Is American exceptionalism a thing of the past? If so, it would be terrible news for stocks.
In the rest of the world, 26% of corporate cash flow is reinvested in the company. In the US, it’s 42%, and for the Magnificent Seven, it’s 57%. This is American Exceptionalism distilled by a single driver. If this continues, that’s great. If rampant uncertainty drives US companies into hiding, it won’t. 90-day US Treasury bills yielding a risk-free 4.2% look pretty good in this new chaotic world, especially if you are still sitting on the gigantic profits of the past two years.
This is why Foreigners have been pouring money into the US as fast as possible and has been a major factor in our price appreciation until now. Foreign investors now own $23 trillion worth of American debt, equities, and real estate today versus only $8 trillion in 2017.
As I mentioned last week, when I suggest a European investment idea to a European, they tell me I am out of my mind and beg for more US investment ideas. I know this because about one-third of the Mad Hedge subscribers are aboard in 134 countries.
And this is why markets are so jittery. Some 23% of all the completed cars sold in the US are actually made in Mexico and Canada. For auto parts, the figure is more than 50%. The US sold 3.7 million vehicles made in Mexico and Canada. The new 25% tariff will increase prices by $6,300 per vehicle. Average car prices are now at $50,000 and are already at all-time highs. That works out to a $22.7 billion tax on the buyers of new cars who are mostly middle class.
My bet? That the prices of used cars soar, which aren’t subject to any such taxes.
Turn off the TV. Ignore the noise. Buy the down days and sell the up days. It’s no more complicated than that. If you want to play headline ping pong with the president, be my guest. But you’ll lose your shirt.
February has started with a breakeven +0.57% return so far.
That takes us to a year-to-date profit of +6.25%so far in 2025. My trailing one-year return stands at +83.45% as a bad trade a year ago fell off the one-year record. That takes my average annualized return to +5.23%and my performance since inception to +757.12%.
I used the weakness in Tesla to double up my long there. That tops up our portfolio to a long in (TSLA), a short in (TSLA), and longs in (NVDA) and (VST).
Some 63 of my 70 round trips, or 90%, were profitable in 2023. Some 74 of 94 trades have been profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.
Try beating that anywhere.
My Ten-Year View – A Reassessment
We have to substantially downsize our expectations of equity returns in view of the election outcome. My new American Golden Age, or the next Roaring Twenties, is now looking at multiple gale force headwinds. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old.
My Dow 240,000 target has been pushed back to 2035.
On Monday, February 10, nothing of note takes place.
On Tuesday, February 11, at 8:30 AM EST, the NFIB Business Optimism Index is released.
On Wednesday, February 12 at 8:30 AM, the Core Inflation Rate is printed.
On Thursday, February 13 at 8:30 AM, the Weekly Jobless Claims are disclosed.
On Friday, February 14 at 8:30 AM, the Producer Price Index is announced. At 2:00 PM the Baker Hughes Rig Count is printed.
As for me, it was with a heavy heart that I boarded a plane for Los Angeles to attend a funeral for Bob, the former scoutmaster of Boy Scout Troop 108.
The event brought a convocation of ex-scouts from up and down the West coast and said much about our age.
Bob, 85, called me two weeks ago to tell me his CAT scan had just revealed advanced metastatic lung cancer. I said, “Congratulations Bob, you just made your life span.”
It was our last conversation.
He spent only a week in bed and then was gone. As a samurai warrior might have said, it was a good death. Some thought it was the smoking he quit 20 years ago.
Others speculated that it was his close work with uranium during WWII. I chalked it up to a half-century of breathing the air in Los Angeles.
Bob originally hailed from Bloomfield, New Jersey. After WWII, every East Coast college was jammed with returning vets on the GI bill. So he enrolled in a small, well-regarded engineering school in New Mexico in a remote place called Alamogordo.
His first job after graduation was testing V2 rockets newly captured from the Germans at the White Sands Missile Test Range. He graduated to design ignition systems for atomic bombs. A boom in defense spending during the fifties swept him up to the Greater Los Angeles area.
Scouts I last saw at age 13 or 14 were now 60, while the surviving dads were well into their 80s. Everyone was in great shape, those endless miles lugging heavy packs over High Sierra passes obviously yielding lifetime benefits.
Hybrid cars lined both sides of the street. A tag-along guest called out for a cigarette, and a hush came over a crowd numbering over 100.
Apparently, some things stuck. It was a real cycle of life weekend. While the elders spoke about blood pressure and golf handicaps, the next generation of scouts played in the backyard or picked lemons off a ripening tree.
Bob was the guy who taught me how to ski, cast rainbow trout in mountain lakes, transmit Morse code, and survive in the wilderness. He used to scrawl schematic diagrams for simple radios and binary computers on a piece of paper, usually built around a single tube or transistor.
I would run off to Radio Shack to buy WWII surplus parts for pennies on the pound and spend long nights attempting to decode impossibly fast Navy ship-to-ship transmissions. He was also the man who pinned an Eagle Scout badge on my uniform in front of beaming parents when I turned 15.
While in the neighborhood, I thought I would drive by the house in which I grew up, once a modest 1,800 square foot ranch-style home to a happy family of nine. I was horrified to find that it had been torn down, and the majestic maple tree that I planted 40 years ago had been removed.
In its place was a giant, 6,000-square-foot marble and granite monstrosity under construction for a wealthy family from China.
Profits from the enormous China-America trade have been pouring into my hometown from the Middle Kingdom for the last decade, and mine was one of the last houses to go.
When I was class president of the high school here, there were 3,000 white kids and one Chinese. Today, those numbers are reversed. Such is the price of globalization.
I guess you really can’t go home again.
At the request of the family, I assisted in the liquidation of his investment portfolio. Bob had been an avid reader of the Diary of a Mad Hedge Fund Trader since its inception, and he had attended my Los Angeles lunches.
It seems he listened well. There was Apple (AAPL) in all its glory at a cost of $21. I laughed to myself. The master had become the student, and the student had become the master.
Like I said, it was a real circle of life weekend.
Scoutmaster Bob
1965 Scout John Thomas
The Mad Hedge Fund Trader at Age 11 in 1963
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
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Tesla stock has been falling since the mid of last December, and I expect the short-term trajectory of the stock to be a real slippery slope.
There are a variety of factors causing the stock to struggle.
I won’t ignore the issue that the eccentric and strongly opinionated CEO Elon Musk has aggressively inserted himself into European politics and turning off the political establishment in Europe, which has always been radically left, is just asking for trouble.
It’s my opinion that he has essentially written off doing business in Europe and is throwing his efforts on making political inroads in the old continent.
Long term, I am not sure Musk can compete against the Chinese pricing power, and securing political gains in Western government will help his empire grow.
His sights have shifted away from EVs to rockets, and the stock will likely suffer from this.
Don’t forget that Europeans are facing a stark and grueling cost of living crisis that is degrees of magnitudes worse than what is happening in the United States.
Interesting that Americans complain that rental costs consume half the salary, but in Europe, tenant obligations via leases consume 100% of the average white-color job salary.
The end result is that young Europeans cannot afford to buy cars, whether it be gas powered or electric.
How bad are things for Tesla?
Sales of its EVs dropped 13% in the European Union in 2024.
They are also facing growing pressure as Chinese and Euorpean rivals launch a wave of cheaper electric vehicles.
Tesla saw big drops in sales in major markets dominated by ultra-progressive politics like Germany, France, and Italy.
In Germany, the hub of Europe's auto industry and the home of Tesla's Berlin gigafactory, sales of Tesla vehicles fell by 41% in 2024, outstripping the 27% sales decline in the general battery EV market.
Swedish brand Volvo, which is owned by Chinese conglomerate Geely, saw its sales rise nearly 30% in the EU last year, driven by the popularity of its $40,000 EX30 electric crossover.
Several German companies have announced they will stop buying Tesla vehicles over Musk's political and social comments in recent months.
This trend is likely to grow in 2025.
Musk has also become entangled in UK politics, feuding with British Prime Minister Keir Starmer.
I expect Musk's active political involvements to have a damaging impact on Tesla's European sales for the foreseeable future, and rivals would likely reap the benefit of disgruntled Tesla owners ditching their vehicles.
Tesla makes a great car – I don’t deny that.
Musk has already sold 2 to 3 EVs to every Western progressive that could ever want an EV. Conservatives aren’t interested in EVs. Try selling a Tesla in rural Poland to a Polish milk farmer where it would be almost impossible to find a charging station. EVs are almost entirely reserved for an urban environment where EV infrastructure is beefy and widespread.
Since Musk cannot get that EV sales growth boost in the short-term, he is riding on the coattails of the global populist movement to secure political victories, and it is working to his benefit.
At the end of the day, consumers would ultimately be more concerned about factors such as price and performance, rather than Musk's politics, but with people who can afford buying multiple EVs in Europe, they care about the name on your passport, the university you went to, and especially your political views.
Europe is just like that, and Musk is going ahead and alienating the European market.
In the short-term, I don’t see a lot of individual catalysts that could boost Tesla in the short-term, although after the Deepseek black swan, Tesla could ride a general tech market revision to the mean rally.
Let’s hope the general tech market heals itself from the Deepseek nuclear bomb, but I would stay away from Tesla in the short-term and opt for something more attractive in tech like Meta or Netflix in 2025.
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Last weekend, while organizing my home office, I stumbled across an old COVID vaccination card. Remember those? It got me thinking about Moderna (MRNA), the biotech darling that went from relatively unknown to household name faster than you can say "messenger RNA."
Now, in early 2025, this once up-and-coming company is already facing what my grandmother would call "champagne problems" - too much cash to be broke, but burning through it faster than a Tesla (TSLA) on Ludicrous mode.
First, let's talk about this biotech's cash burn. In just nine months of 2024, Moderna torched through over $4 billion - that's the same amount they burned in all of 2023, suggesting their cash cremation rate is actually accelerating.
This acceleration in spending wouldn't be as worrying if they had endless reserves, but their current position shows $7 billion in cash and $2 billion in non-current investments.
The math isn't complex: at this burn rate, their runway is shorter than many investors realize.
The recent Health and Human Services (HHS) grant of $176 million in July 2024 for bird flu research barely registers on their financial statements.
While we've seen about 70 bird flu cases in the U.S. with one fatality in an elderly patient with underlying conditions, this isn't going to be another COVID-style revenue stream.
I've analyzed enough pharmaceutical companies to know that betting on another pandemic windfall is like expecting lightning to strike twice in the same spot.
What really interests me is Moderna's position in the competitive landscape. I spent last week analyzing patent data and geographic reach metrics across the industry.
First, you've got the old-guard pharma giants like Novartis (NVS), Sanofi (SNY), and Johnson & Johnson (JNJ), who have been at this game since before mRNA was a gleam in a scientist's eye.
Then, there are companies like BioNTech (BNTX) and Roche (RHHBY) with significantly higher geographic reach, while Replimune Group (REPL) and CRISPR Therapeutics (CRSP) demonstrate superior application diversity.
In comparison, Moderna's position in this landscape shows relatively low scores on both metrics - not exactly what you want to see from a company burning cash at this rate.
Stéphane Bancel, Moderna's CEO, recently outlined their pipeline: 2 approved medicines, 7 Phase 3 trials, and 45 candidates in development. They're also targeting $1.1 billion in annual R&D cost reductions by 2027.
But here's what keeps bothering me: their SG&A expenses have ballooned to nearly 10 times their pre-COVID levels, yet management is focusing on R&D cuts instead of addressing this administrative bloat.
The insider trading patterns since early 2024 haven't exactly inspired confidence either.
When I see heavy selling from insiders while a company is promising future breakthroughs, I can't help but remember all the biotech stories I've covered where the promise didn't match the reality.
Speaking of promises, Oracle's (ORCL) Larry Ellison recently made headlines talking about 48-hour personalized cancer vaccines using AI and robots.
While the technology sounds promising, I'm more interested in the practical path to profitability. Moderna isn't alone in this race, and their well-capitalized competitors have the luxury of funding similar development programs while maintaining positive cash flow.
Given Moderna's cash burn trajectory, their next three quarters will be telling.
I'll be watching that $4 billion nine-month burn rate closely, along with their progress on cost reductions - particularly those inflated SG&A expenses that management seems reluctant to address.
I'm keeping my old vaccination card as a reminder of Moderna's impressive COVID-19 achievement, but I'm not ready to bet on lightning striking twice.
Sometimes the hardest part of investing is knowing when to appreciate history without banking on its repeat performance.
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As I write this, tariffs are coming into force and confusion reigns supreme at the borders. The worst-case scenario has arrived.
In the Marine Corp., they say that a missing 50-cent part can ground a $50 million dollar airplane. It turns out that many of the 50-cent parts are made in Canada and Mexico, which are now in trucks stuck in massive traffic jams at the border. The border is in no way set up for any change in the tariff regime.
Think of it as a mini Covid shock to the supply chain. The parts will eventually show up but will be more expensive.
This is not what traders wanted to hear. That great whooshing sound was the stock market giving up hard-fought gains for the day. Nervousness is running rampant.
With mass firing on the way throughout the government, it’s just a matter of time before the passport renewal process extends from weeks to years. I am telling friends and family to renew now before the process clogs up and shuts down. At the very least, fees are about to go up a lot, now at $130.
When I opened up my laptop on Sunday night and saw the NASDAQ ($COMPQ) down 900 points, I thought that a new war had broken out somewhere or another 9/11 event had taken place. That recovered to down only 400 by the New York opening. This is exactly the set up I had been waiting for since mid-December. I started piling in on longs in big tech stocks, turning my January performance from lackluster to robust in a matter of days.
And that’s the way it’s going to be in 2025. Maintain iron discipline and hold out for these rare sweet spots, then pile in. Never chase, that was last year’s game. We could be range trading for quite some time. Index players might be lucky to make anything by year-end, and might be better off parking their money in 90-Treasury bills, now yielding 4.2%.
By the end of the week, most of the losses were recovered, except for the big AI providers like (NVDA) and (AMD), which have had their own problems for the last seven months. The net is that it is potentially bad news for AI providers and great news for AI users, which is almost everybody.
I have heard from several clients that they spent the week trying to trip up the DeepSeek program and have come up with hilariously inaccurate answers. For example, DeepSeek didn’t know that my former USC classmate OJ Simpson died last year and thought he was a current NFL football player. And don’t ask who Winston was in 1984. Other examples about.
In the meantime, the big tech companies are all tinkering with DeepSeek, making changes and improvements. It is definitely a clever programming improvement, but it’s not going to destroy the world.
Whatever happened to Cold Fusion?
Remember that 1990’s meme that set stocks on fire? It was supposed to give us free electricity forever. Except that here I am 35 years later, and cold fusion is still 20-40 years into the future. It’s always 40 years in the future. The same thing happened with the 3D printing craze and the fax mania before that.
That’s what came to mind last December when I first heard that the Chinese app DeepSeek had delivered a revolutionary new AI program that was supposed to cut the need for high-end chips by 99%. I ignored it just like all of the other Chinese apps that come out on a daily basis.
Which leads me to the quandary of the day. Why the heck is Europe suddenly doing so well? The German stock market has outperformed the S&P 500 (SPY) by a large margin in recent months. Whenever I mention putting a dollar into any European country, my continental friends say I’m out of my mind and that they only want more American investment ideas. Is there something going on here?
My only thought is that themarkets may be discounting an end to the Ukraine War this year. If so, some 10 million barrels a day of oil would be unleashed on the market, taking prices down to $30 a barrel. Ukraine would reclaim its position as the world’s largest agriculture exporter, collapsing prices for wheat and sunflower oil. And Europe will be able to pare back its recently increased defense spending.
You heard it here first.
By the way, the 9/11 reference brings to mind one of the most notorious short sales of all time. The day before the attack, a Swiss bank acting on behalf of an anonymous client bought several thousand short-dated put options on American Airlines (AA). After two American planes were deliberately crashed in a suicide attack, the trade made $200 million. The FBI set a trap to arrest those who came to collect. But they never showed. Eventually, the trades were unwound by the exchange. It’s all true.
We managed to attain a respectable +5.80% return in January. That is close to my average monthly return for all of 2024. The magic is still there.
That takes us to a year-to-date profit of +5.80%so far in 2025. My trailing one-year return stands at +85.34% as a bad trade a year ago fell off the one-year record. That takes my average annualized return to +49.96%and my performance since inception to +757.69%.
I used the Monday meltdown to start filing in positions in Nvidia (NVDA) and Vistra (VST). That is on top of my existing short strangle in Tesla (TSLA). The Mad Hedge Technology added a slew of long on Microsoft (MSFT), Adobe (ADBE), Dell (DELL), and (NVDA).
Some 63 of my 70 round trips, or 90%, were profitable in 2023. Some 74 of 94 trades have been profitable in 2024, and several of those losses were really break-even. That is a success rate of +78.72%.
Try beating that anywhere.
Technology Stocks Destroyed on News of China’s DeepSeek, an AI program that takes them a great leap forward. U.S. technology firms like Nvidia plunged, as Chinese startup DeepSeek sparked concerns over competitiveness in AI and America’s lead in the sector, triggering a global sell-off. DeepSeek launched a free, open-source large language model in late December, claiming it was developed in just two months at a cost of under $6 million. These developments have bolstered questions about the large amounts of money big tech companies have been investing in artificial intelligence models and data centers.
US Home Sales Hit 30-Year Low in 2024, the second year in a row of weak sales. High costs related to homeownership sapped sales again. The average rate for a 30-year fixed mortgage has hovered between 6% and 8% since late 2022. Avoid interest rate plays.
Nvidia Drops $600 Billion in Market Capitalization, the largest in stock market history. CEO Jensen Huang’s net worth dropped below $100 billion, while CEOs of the Mangiest Seven plunged by $67 Billion. I told you it was coming. Buy when the washout finishes. The bubble didn’t burst.
The Cruise Business is Rocketing, with Royal Caribbean (RCL) just running up its best five-week sales period in history. There is a two-year wait to order the enormous new ships, the biggest, 264,000-tonne Icon of the Seas, carries a mind-blowing 7,400 passengers. Buy (RCL) and (CCL)on dips.
US Consumer Confidence Divesamid renewed concerns about the labor market and inflation. The Conference Board said on Tuesday its consumer confidence index fell to 104.1 this month from an upwardly revised 109.5 in December. Economists polled by Reuters had forecast the index rising to 105.6 from the previously reported 104.7.
Fed Leaves Interest Rates Unchanged at 4.25%, tanking stocks. All interest rate plays will remain dead in the water. Will the pause be for six months or a year, or will the next Fed be a rate rise? Jay Powell is waiting for the impact of new government policies like all the rest of us. Buy financials on dips. The Fed's balance sheet continues to shrink and is down to $6.8 trillion, withdrawing liquidity from the system. All references to “progress” on inflation were dropped.
Coffee Prices Hit a New All-Time High at $3.60/pound for Arabica. Brazil, by far the world's largest producer, has few beans left to sell, and worries over its upcoming harvest persist. Dealers said 70%-80% of Brazil's current arabica harvest has been sold and new trades are slow. Brazil produces nearly half the world's arabica beans, a high-end variety typically used in roast and ground blends. This is yet another climate change play.
Waymo Self-Driving Taxis Expanding to Ten New Cities.After testing the Waymo Driver in multiple cities, the company says the technology is adapting successfully to new environments, leading to the expansion. In addition to ongoing trips to Truckee, Michigan's Upper Peninsula, Upstate New York, and Tokyo, the expansion includes testing in San Diego and Las Vegas, with more cities yet to be announced.
Tesla Bombs in 2024, with earnings at $25.5 billion last year versus $27.2 billion, or down 5.5%. Even a presidential friendship can’t boost earnings. Despite missing on every metric, the shares were only down $3 today. Tesla is more about belief in the future and today’s facts. But full self-driving will launch in the US in June after being stalled by the previous administration.No guidance for sales in 2025. Energy storage was the big grower last year and will do well this year. Not the rose bed I was promised. My short position is looking good, but I’m maintaining my long-term target of $1,000. US GDP Finishes 2024 at 2.3%, less than expected but still the strongest in the world. Household spending grew at a 4.2% pace, most since early 2023. Equipment spending fell at a 7.8% rate on the Boeing strike impact. What happens next is anyone’s guess.
Microsoft Blows Up on Cloud Guidance, on huge earnings disappointment, taking the stock down 6%. The company beat estimates on the top and bottom lines but fell short on estimates for its Intelligent Cloud business. Microsoft’s Commercial Cloud segment revenue, which includes cloud services sales, saw revenue of $40 billion, a 21% year-over-year increase but shy of Wall Street expectations of $41.1 billion. Microsoft's intelligent cloud business, which includes its Azure platform, saw revenue of $25.5 billion. Wall Street was expecting $25.8 billion. I’m buying the dip.
Weekly Jobless Claims Fall 16,000to a seasonally adjusted 207,000 for the week ended Jan. 25, the Labor Department said on Thursday. Economists polled by Reuters had forecast 220,000 claims for the latest week.
Consumer Inflation Expectations Comes in Soft. The personal consumption expenditures price index increased 2.6% on a year-over-year basis in December, while core PCE was at 2.8%, both in line with expectations but well ahead of the Fed’s 2% target. Personal income climbed 0.4% as forecast, while spending rose 0.7%. Markets liked the number.
Apple is Catching a Bid on the assumption that diplomat Tim Cook can somehow avoid import duties from China. Even at a 100% tariff, it would probably add only $100 to the cost of an iPhone, which is made in China.
My Ten-Year View – A Reassessment
When have to substantially downsize our expectations of equity returns in view of the election outcome. My new American Golden Age, or the next Roaring Twenties is now looking at a headwind. The economy will completely stop decarbonizing. Technology innovation will slow. Trade wars will exact a high price. Inflation will return. The Dow Average will rise by 600% to 240,000 or more in the coming decade. The new America will be far more efficient and profitable than the old.
My Dow 240,000 target has been pushed back to 2035.
On Monday, February 3 at 8:30 AM EST, the ISM Manufacturing Index PMI is out.
On Tuesday, February 4 at 8:30 AM, the JOLTS Job Openings is released.
On Wednesday, February 5 at 8:30 AM, the ISM Survives PMI is printed.
On Thursday, February 6 at 8:30 AM, the Weekly Jobless Claims are disclosed.
On Friday, February 7 at 8:30 AM, Nonfarm Payroll Report for January is announced. At 2:00 PM the Baker Hughes Rig Count is printed.
As for me, the University of Southern California has a student jobs board that is positively legendary. It is where the actor John Wayne picked up a gig working as a stagehand for John Ford which eventually made him a movie star.
As a beneficiary of a federal work/study program in 1970, I was entitled to pick any job I wanted for the princely sum of $1.00 an hour, then the minimum wage. I noticed that the Biology Department was looking for a lab assistant to identify and sort Arctic plankton.
I thought, “What the heck is Arctic plankton?” I decided to apply to find out.
I was hired by a Japanese woman professor whose name I long ago forgot. She had figured out that Russians were far ahead of the US in Arctic plankton research, thus creatinga “plankton gap.” “Gaps” were a big deal during the Cold War, so that made her a layup to obtain a generous grant from the Defense Department to close the “plankton gap.”
It turns out that I was the only one who applied for the job, as postwar anti-Japanese sentiment then was still high on the West Coast. I was given my own lab bench and a microscope and told to get to work.
It turns out that there is a vast ecosystem of plankton under 20 feet of ice in the Arctic consisting of thousands of animal and plant varieties. The whole system is powered by sunlight that filters through the ice. The thinner the ice, such as at the edge of the Arctic ice sheet, the more plankton. In no time, I became adept at identifying copepods, euphasia, and calanus hyperboreaus, which all feed on diatoms.
We discovered that there was enough plankton in the Arctic to feed the entire human race if a food shortage ever arose, then a major concern. There was plenty of plant material and protein there. Just add a little flavoring and you have an endless food supply.
The high point of the job came when my professor traveled to the North Pole, the first woman ever to do so. She was a guest of the US Navy, which was overseeing the collection hole in the ice. We were thinking the hole might be a foot wide. When she got there, she discovered it was in fact 50 feet wide. I thought this might be to keep it from freezing over, but thought nothing of it.
My freshman year passed. The following year, the USC jobs board delivered up a far more interesting job, picking up dead bodies for the Los Angeles Counter Coroner, Thomas Noguchi, the “Coroner to the Stars.” This was not long after Charles Manson was locked up, and his bodies were everywhere. The pay was better too, and I got to know the LA freeway system like the back of my hand.
It wasn’t until years later, when I had obtained a high security clearance from the Defense Department that I learned of the true military interest in plankton by both the US and the Soviet Union.
It turns out that the hole was not really for collecting plankton. Plankton was just the cover. It was there so a US submarine could surface, fire nuclear missiles at the Soviet Union, and then submarine again under the protection of the ice.
So, not only have you been reading the work of a stock market wizard these many years, you have also been in touch with one of the world’s leading experts on Artic plankton.
Live and learn.
1981 on Peleliu Island in the South Pacific
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
https://www.madhedgefundtrader.com/wp-content/uploads/2025/02/Young-john.png530658april@madhedgefundtrader.comhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngapril@madhedgefundtrader.com2025-02-03 09:02:162025-02-20 12:38:50The Market Outlook for the Week Ahead, or The Trade War Begins
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