Global Market Comments
November 27, 2020
Fiat Lux
FEATURED TRADE:
(NOVEMBER 25 BIWEEKLY STRATEGY WEBINAR Q&A),
(TSLA), (CRM), (CRSP), (CVS), (SQ), (CRSP), (LUV), (GLD). (SLV), (SPY), (TMO), (UUP), (TAN), (FXA), (FXE), (FXY), (FXB), (CYB)
Tag Archive for: (TSLA)
Below please find subscribers’ Q&A for the November 25 Mad Hedge Fund Trader Global Strategy Webinar broadcast from Silicon Valley, CA with my guest and co-host Bill Davis.
Q: Is gold (GLD) still a hold?
A: Long term yes; short term no. Short term, cash is being drained out of gold in order to buy Bitcoin, just like silver. And once Bitcoin peaks, which could be today or tomorrow when it hits 20,000, then you could get a round of profit-taking and a nice little pop in gold. So, it's basically moving totally counter-cyclically to Bitcoin and the other cryptocurrencies right now.
(Note: since this webinar, Bitcoin has crashed by $3,000)
Q: A competitor of yours claims that asymptomatic transmission of COVID does not occur.
A: I would bet money that person does not have a medical degree. Asymptomatic transmission occurs in almost all diseases, so why COVID would be an exception is beyond me. I suggest that somebody is trying to sell newsletters at your expense with zero knowledge about the topic. Ask him to kiss a Covid victim. This is common in my industry where 99% of the people are crooks. This is also an example of the vast amounts of information that have been spread during an election year.
Q: Will you take a vaccine when it’s out or will you let others try it first?
A: Actually, by the time the public gets the vaccine, more than a million people will have already tried it, so I think it will be fairly safe. I am probably already the most vaccinated person on the planet; I've had flu shots every year for 40 years, so I will happily try it out. At my age, I have little to lose. And I would like to travel again, and that’s going to be a requirement for international travel. I am worried there could be long term side effects that we’ve seen with other drugs in the past, like all future children being born without arms and legs, which is what happened in the 1950s with Thalidomide.
Q: If the Senate flips to the Democrats, how do you see it affecting the market?
A: It doesn’t really affect the market overall; what it will do is affect sector reallocation. Solar, alternative energy and ESG companies do a lot better in A Democratic Senate, and energy oil companies do a lot worse. All you do is short the losers and buy the winners; it really makes no difference who wins. Most of the big conflicts over issues these days are social ones that don’t affect the market.
Q: Where do you see Tesla (TSLA) by the end of the year?
A: Well, this morning, it’s at an all-time high of $565. It looks like it wants to take a run at $600, and then we will be up 50% from where the news was announced that it was joining the S&P 500. That seems to me like a heck of a move on no real fundamental news. During this news, the market completely ignores a Model X recall and a Model Y pan from Consumer Reports. I would be inclined to take profits there or at least roll the strikes up on my options positions.
Q: What’s a good stock to play a commodity recovery?
A: You can’t do any better than Freeport-McMoRan (FCX), which I’ve been following for almost 50 years since I covered it for the Australian Financial Review newspapers.
Q: Will Salesforce (CRM) hold?
A: Yes, it’s just a matter of time before we break out to substantial new highs, and this is a stock that could double next year.
Q: What brokers do you suggest?
A: I would pick tastytrade. Click here for their site.
Q: Is CVS (CVS) a good buy?
A: I would say yes; a billion Covid-19 vaccine doses will need to be distributed next year. You can't do that without all the drug companies participating big time.
Q: Does Trump have a chance to win in his lawsuits?
A: It’s more likely that I will be elected the next Miss America; so, I wouldn’t place any bets on that. Some 30 consecutive Republican judges ruling against him does not augur well for his future.
Q: Would you buy any LEAPS here (Long Term Equity Participation Securities)?
A: Only in special one-off situations in the domestic stocks that haven’t moved in ten years. There are a lot of those out there now that I have been recommending. Those are all fertile territory for LEAPs, especially going out 2 years where you get the maximum bang for the buck and a 1,000% return. Don’t touch LEAPs in technology stocks here, and don’t touch Tesla in LEAPs.
Q: What’s your outlook on Southwest Air (LUV)?
A: I like it; it’s one of the healthiest domestic airlines most likely to come back.
Q: Are you going to update your long-term portfolio?
A: Yes, but I only update it twice a year and my next turn is on January 22. If you bought the last update on July 22, you made a fortune getting into Freeport McMoRan at $12 (it’s now $23), CRISPER Therapeutics at $80 (CRSP) (it’s now $110), and Square (SQ) at $110 (the current is $212). You can find it by logging into www.madhedgefundtrader.com, going to My Account, clicking on Global Trading Dispatch, on the drop-down menu, click on the Long-Term Portfolio tab and then clicking on the red tab for the Long-Term Portfolio. That lets you download an excel spreadsheet.
Q: Do you have any LEAPS to suggest now?
A: I only put out portfolios of LEAPS at giant market bottoms like we had in March. Then I put out lists and lists of LEAPS. At all-time highs, it’s not good LEAPS territory, except for specific names. So, if you want to get involved in that on a regular basis, I suggest you sign up for our Mad Hedge Concierge Service. There they are making millions of dollars a week right now.
Q: Where does the US dollar (UUP) go from here?
A: Straight down; the outlook for the buck couldn't be worse. I would be selling short the US dollar like crazy right now except that there are much better trades in US equities.
Q: Just to be clear, there’s no voter fraud?
A: There’s probably never been an election in US history without voter fraud on all sides; it’s just a question of who’s better at it. In the 1948 Texas Democratic Party runoff, back when the party owned Texas, Lyndon Johnson won by 87 votes out of 988,295 cast. It was later found that in five Hispanic-dominated counties that bordered Mexico, everyone had voted 100% for Johnson ….in alphabetical order. Johnson then took the seat with a 66% margin and went on to dominate the US Senate. I remember in the 1960 election, all the military absentee votes were sent flying around in circles over the Atlantic so Kennedy would win; that’s a story that’s been out there for a long time.
Q: You said stay away from other EVs except for Tesla?
A: A few have gone crazy this week, but that doesn’t mean they can actually make a car. So, you might get lucky on a quick trade on some of these, but long term, I don’t think any of the other non-Tesla EV companies are going to make it except for General Motors, which is plowing $27 billion into the sector. Even if (GM) may be able to put out a lot of cars, but they won’t be able to make very much money at it because they’re nowhere near the neighborhood of Tesla with the software where all the money is made.
Q: As the dollar gets weaker, will you expand your international stock picks?
A: Yes, we put out the first one in a long time, Ali Baba (BABA), on Monday, and we’ll be adding to that a bunch. I think the dollar could be weak for 5 or 10 years, a lot like it was in the 1970s.
Q: What’s your outlook for silver (SLV)?
A: Same as for gold (GLD). Quiet for the short term, double for the long term.
Q: Favorite names in biotech?
A: For that, you really need to subscribe to the biotech letter; we’re giving you two names a week there and all of them have done great. But another one might be Thermo Fisher (TMO), which seems to double every time I recommend it. It’s a great takeover target too.
Q: Is there any possibility of a 30% dip in the market (SPY) in 2021?
A: No, I don’t see more than a 10% dip in 2021. The tailwinds now are gale-force, generational, and will run for a decade.
Q: How do you sell the US dollar rally?
A: You buy all the ETFs that we cover in our foreign exchange sections. Those are the Australian dollar (FXA), the Euro (FXE), the Japanese Yen (FXY), the British pound (FXB), and the Chinese Yuan (CYB). Those are five ETFs that will do well on a weak dollar for the next several years.
Q: What about the Invesco Solar ETF TAN?
A: We have been recommending (TAN) for many years and it has done spectacularly well. I still love it long term, but it’s had one heck of a run; it’s up 300% from the March low. I think the entire country is about to have a solar explosion because the costs are now quite simply less than for oil. It’s an economic question. We are going to an all-Electric America.
Q: What do you think about LEAPS on gold?
A: It’s not really LEAPs territory yet, but on a two-year view, you’d have to do well on gold LEAPs.
Q: Is the Invesco DB US Dollar Index Bullish Fund (UUP) good to buy?
A: You should be looking to short the UUP. It’s a long dollar basket which we think will do terribly.
Good Luck and Stay Healthy.
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
Global Market Comments
November 23, 2020
Fiat Lux
FEATURED TRADE:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or THE VACCINE PUT IS IN),
($INDU), (SPY), (TLT), (GLD), (TSLA)
You’ve all heard of the Fed Put which has put a floor under stock markets for the past decade, although it didn’t work so well this year.
Now, we have the Vaccine Put. Traders and investors have been more than willing to look through the pandemic to the other side, when multiple vaccines bring an end to the pandemic next summer.
That explains the ballistic $3,800 point rally in the Dow Average that launched in the run-up to the election. At 200,000 new cases and 2,000 deaths a day, we are losing the battle, but the cavalry is on the way and we can even hear the bugles.
That’s why I have recently been more aggressive in the market than usual, breaking all of my 13-year performance records. I don’t expect a market correction of more than 6% from here, or $1,800 Dow points. All of my current positions are geared to handle such a hit. After that, the market runs to new all-time highs.
We have ample reasons to see that 6% drawdown. While the pandemic rages, the president plays golf. Treasury Secretary Steven Mnuchin has moved to cancel the stimulus program in progress, despite vociferous Fed opposition. It was enough to prompt a $300 point selloff in the Dow and a near $2.00 spike in the bond market (TLT).
It is a scorched earth policy the Russians would be proud of. Trump is attempting to saddle Biden with a deeper depression and worse pandemic that will take longer to get out of. You and I will pay the price. In the meantime, there is a bull market in refrigerator trucks.
But if you believe that the Dow is headed for $120,000 in a decade as I do, why bother selling to avoid a mere $1,800 correction? You’d probably miss the bottom and the next leg up.
American Consumers are loaded with cash, after enduring a spending diet that is approaching a year. No business travel, no vacations, no shopping. Debt service ratios are also at decade lows, thanks to ultra-low interest rates. It all sets up a new American Golden Age starting in 2021.
Moderna announces 94.5% effective vaccine, triggering another monster rally in stocks for the second week in a row. The vaccine seems to block all of the most severe cases. Seniors may be able to get it by April. Mad Hedge Biotech Letter subscribers made a killing, getting into (MRNA) a year ago, pre-pandemic. Keep buying (MRNA) on dips. As for me, I’m running out of longs as they have all worked.
Mass tourism will return this summer after we all get our shots, says the CEO of Expedia, Peter Kern. The discount airline ticket reseller has been hanging on by its fingernails for the past nine months and just announced horrific earnings. Hint: this is not Rome’s first plague. A lot of travel businesses will get under, then resurface under new ownership. Summer booking is already picking up.
Tesla joins the S&P 500 and at a $480 billion market cap is the largest new entrant ever to do so. The stock was up a mind-blowing $108, or 27% on the news. This opens up new categories of institutional investors for Elon Musk’s dream come true, such as the $4.5 trillion in (SPX) index funds, which are now required by law to buy it. It gives the (SPX) more of a technology bent.
S&P finally got past the issue that most of the company’s profits come from ZEV, or green credits. Goldman Sachs figures that this will generate at least $9 billion of net buying of Tesla shares when there are no sellers. At this point, Tesla is the largest position of most Mad Hedge followers, primarily through capital appreciation.
Warren Buffet is pouring money into big pharma, and maybe you should too. It’s the cheapest sector in the market. AbbVie (ABBV), Bristol Myers (BMY), Merck (MRK), and Pfizer (PFE) were his biggest picks, according to regulatory filings, all names well known to the subscribers of the Mad Hedge Biotech & Healthcare Letter. It’s not all about Covid-19. Every major human disease will be cured in the next decade, spinning of billions in profits.
Homebuilders Sentiment Index breaks new record, at 90. The residential real estate market is on fire. After a great run, the homebuilders are still getting fabulous data. Builders are seeing supply shortages everywhere. Buy (LEN), (DHI), and (KBH) on dips. This trend has another decade to run.
Housing Starts rocket in October to a staggering 1.53 million, the highest since the last housing bubble top in 2007. Good luck finding something for sale. Which vacation destination resort is seeing the highest growth in sales? Good old Incline Village, NV, up 87% YOY. Many are buying homes after simply looking at zoom videos. Could housing be presaging what the entire economy is going to do in 2021? Buy everything on dips!
The Boeing 737 MAX flies again, with the beleaguered company regaining FAA certification after a 20-month break. It’s amazing this company is still alive after the grounding of its main product and thousands of order cancellations from the pandemic. Taking their debt from $9 billion up to an eye-popping $63 billion is what did it. American Airlines (AA) will be the first to take the troubled aircraft back to the skies. Buy (BA) on dips.
Global Debt to hit $227 trillion by end of 2020, thanks to the pandemic. Governments accounted for half of the increase. US Debt jumped from $71 in 2019 to $80 trillion. Sounds like a short to me! Sell (TLT) on every five-point rally.
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 400% to 120,000 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 120,000 here we come!
My Global Trading Dispatch exploded to another new all-time high last week. November is up 14.70%, taking my 2020 year-to-date up to a new high of 50.73%. That brings my eleven-year total return to 406.64% or double the S&P 500 over the same period. My 11-year average annualized return now stands at a new high of 37.24%. My trailing one-year return exploded to 58.48%.
It was a week of profit-taking on my November expiring positions and rolling forward to a new batch of December options. I managed to catch the Tesla melt-up with a double long position, which is always nice for performance.
My only hickey of the week was a short in the (SPY) which I was forced out of in the tag ends of this rally. Four days later, they expired at their maximum profit point.
The coming week will be a sleeper thanks to the national holiday. We also need to keep an eye on the number of US Coronavirus cases and deaths, now over 11.5 million and 250,000, which you can find here.
When the market starts to focus on this, we may have a problem.
On Monday, November 23 at 9:30 AM EST, the Chicago Fed National Activity Index for October is released.
On Tuesday, November 24 at 10:00 AM EST, the S&P Case Shiller National Home Price Index for September is announced.
On Wednesday, November 25 at 9:30 AM EST, the Weekly Jobless Claims are announced a day early because of the holiday. The Q3 US GDP second estimate is printed at the same time.
On Thursday, November 26 Americans celebrate Thanksgiving Day. All markets are closed.
On Friday, November 27, no data points are released.
As for me, thanks to the pandemic I have been watching a lot more TV lately. I have started watching The Crown on Netflix, which is fascinating for me because I personally knew most of the royal family.
I’ll never forget the chief of protocol loudly calling out my name, “Captain John Thomas”, at the Buckingham Palace garden party where I met Queen Elisabeth and Lady Diana.
I also knew many of the postwar prime ministers, including the Iron Lady, Margaret Thatcher. She despised my macroeconomic press conference questions at a time when UK unemployment rate was a sky-high 14% and the pound was in free fall. Still, she toughed it out.
During the Falklands War, I was the Washington Bureau Chief for The Economist magazine. One day, an unusual message came through from London which I was asked to personally take to my old friend, CIA Director William J. Casey. It was a list of 10,000 military items which the British military needed delivered to the South Atlantic in 24 hours! And you know what? They did it!
Stay healthy.
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
You Need a Real Gunslinger on your Side in this Market
Global Market Comments
November 18, 2020
Fiat Lux
Featured Trade:
(THE QUANTUM COMPUTER IN YOUR FUTURE),
(AMZN), (GOOG),
(THE WORST TRADE IN HISTORY), (AAPL)
Global Market Comments
November 17, 2020
Fiat Lux
Featured Trade:
(HOW TO GET A FREE TESLA), (TSLA),
(TESTIMONIAL)
I have assiduously instructed readers on how to earn boatloads of money over the past 12 years. Now I am going to teach you how to spend it wisely.
How would you like to drive a vehicle whose technology is from ten years in the future, will be the envy of your neighbors, and leaves zero carbon footprint? It also the fastest production car ever built. Sounds pretty good, doesn’t it?
I bet if I told you that the car was available for free, you’d be even more interested.
Here’s how it goes.
Buried in the tax bill signed into law in December 2017 is a provision for “bonus depreciation.” It allows one-time-only depreciation of the entire cost of a new car for business use. All of this is tax-deductible.
In addition, you get to deduct all of the annual interest on any loan taken out to purchase the vehicle. Also coming off the bottom line is any insurance and maintenance expenses which, by my experience, come to about $4,000 a year.
You also get a federal electric car tax credit of $3,750 if you sign your contract for a new vehicle before the end of 2019 when the subsidy expires. This comes right off your final tax bill for 2019.
So, total deductions over a five-year period are about $307,000, plus the $3,750 tax credit.
In five years, the car will have a residual value of $60,000, and the $102,500 additional cost is covered by the tax breaks, taking the bottom line after-tax cost of your new mid-life crisis to zero.
Now, here’s how to get a better deal.
Call Tesla and ask if they have any used 2019 showroom cars they want to get rid of before the new model year begins in 2019. In my case, I was able to find in Los Angeles a 2018 Model X P100 D SUV with just 800 miles on the odometer for a $25,000 discount to the $162,500 list price.
It was a total LA car, silver with black wheels and a black leather interior. They added on a $5,000 advanced navigation system, a $3,000 seven-seat configurations for free.
Tesla lists their used car inventory at this site. You may have to get a Tesla salesman on the line to find the 2019 showroom cars.
For those of you who own your own companies or work through single-member LLCs, this is a no-brainer. If you work for a big company, it may be tough to pull off. Talk to your accountant before you do anything.
This is exactly what I did which led me to pick up a brand-new Tesla during a torrential rainstorm last week. It was then that I truly learned what Elon Musk has recently referred to as “Logistics Hell.”
For a start, my car was supposed to be delivered to me at my lakefront estate in Incline Village, Nevada. But Tesla could only get it from Los Angeles to as far as the Fremont factory before the logistics system completely broke down. I agreed to pick it up at Fremont to cut a week off the delivery time and before the heavy snow hit.
When I arrived at the showroom, it was completely empty so I had to wait an hour. Out front were 100 parking spaces filled mostly with Tesla 3’s, and animated technicians showing new owners how to operate them. I was told that the parking lot is completely filled and then emptied out three times a day. (TSLA) is now producing 1,000 Tesla 3’s a day.
When I finally got my turn, I discovered to my horror that the car was registered in the wrong name. When the Nevada Department of Motor Vehicles was told that the new registered owner was “Mad Hedge Fund Trader,” they were somewhat taken aback.
The tow hitch I ordered was missing so the tech pulled one from a back room. The same happened with the second set of keys which are very expensive. I had to Google the tire specs which required me to crawl under the car and get soaked to make sure they were all season because no one there knew.
In the end, I was sent off with my $162,500 car, a box of parts, and a vague promise that a mechanic would visit me someday and put it all together.
This was not the experience I had when I picked up my Teslas in 2011 and 2016 when I was treated like visiting royalty. But I love the car anyway.
Then it really got interesting!
What is the first thing a new Tesla owner wants to try out? The monstrous zero to 60 mph acceleration in 2.9 seconds. And they do this the second they drive out of the parking lot. So, I was treated to dozens of aspiring Indy 500 drivers with giant smiles on their faces zipping around on rain-slick roads. I felt like I was in a shooting gallery.
Thank goodness I brought an extra supply of airline airsick bags!
Global Market Comments
November 16, 2020
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or RAIDING THE PIGGY BANK),
(SPY), ($INDU), (JPM), (CAT), (UNP), (UPS), (SLV), (TLT), (TSLA)
I remember the last time that the market went up 10% in ten days.
In the fall of 1982, I was in the office of Carl Van Horn, the chief investment officer of JP Morgan Bank. I was interviewing him about the long-term prospects for the stock market with the Dow Average at 600 and gurus like Joe Granville predicting Dow 300 by yearend.
The odd thing about the interview was that he kept ducking out of the room for a minute at a time and then coming back in. I finally asked him what he was doing. He answered, “Oh, I had to go out and buy $100 million worth of stock.”
And that was back when $100 million actually bought you something!
Over the last two weeks, the Dow Average has tacked on a historic $4,000 points. For a few fleeting second, it actually touched 30,000. Cassandras everywhere are tearing their hair out.
The monster rally began a few days before the election and has continued unabated. In my view, this is the second leg of a 20-fold move that started in 2009 when the Dow was at 6,000 and will continue all the way up to 120,000 by 2029.
No wonder investors are so bullish! It seems that recently, quite a few have come over to my way of thinking.
And how could they not be so bovine-inclined?
The most contentious election in history over. The pandemic is about to end. In a year we’ll, all have our Covid-19 vaccinations, at least those who want them. I’m planning on getting all six.
The greatest burst of economic growth in history is about to be unleased. Consumption wasn’t destroyed, just deferred into 2021 and 2022, unless you’re in the cruise, airline, or restaurant business. The exponential profit growth unleashed by the pandemic isn’t even close to being discounted.
This hasn’t been just any old rally. Stocks left for dead years ago, the old-line industrials and cyclicals have sprung back to life. Union Pacific (UNP) has exploded. JP Morgan Chase (JNP) has gone off to the races. Caterpillar (CAT) is in orbit.
The great thing about these moves is that it is very early days. They could run for years. But where will the money come from to pay for these? How about raising the big tech piggy bank, which has been leading markets for years and is now wildly overvalued.
However, $4,000 points is a lot. So, we may get some back and fill and a sideways “time” correction before we attempt higher highs by yearend. The only thing that could upset this scenario is if Covid-19 cases explode, which they are now doing.
Where will the market care? Who knows, but like stock prices, US Corona cases have doubled in ten days to 160,000.
Covid-19 is cured! News that Pfizer (PFE) has discovered a Covid-19 vaccine that is 90% effective has sent stocks soaring to new all-time highs! The Dow futures were up $1,800 at the highs pre-market. The Great Depression is over. Recovery stocks like banks, cruise ships, restaurants, energy, and railroads are exploding to the upside, with stay-at-home stocks such as couriers, precious metals, and streaming companies in free fall. Some 500,000 health care workers have priority in getting the two-shot regime. The US Army will begin national distribution almost immediately, but you may not get it until the summer.
Market volatility crashed, with the Volatility Index (VIX) down from $41 last week to $18. Happy times are here again, at least says the market, this minute. I told you to go short last week!
Walt Disney is the best recovery play in the market. With theme parks, hotels, and cruise ships, it had the most exposure of any blue-chip company to the pandemic. It is also best positioned for any recovery. The stock was up 26% at the highs this morning. Only its rock-solid balance sheet gets this company alive. My 2021 target is $200 a share. Back to waiting in lines for hours, packing shoulder to shoulder on rides, and paying $20 for hamburgers.
The end of the depression may be in sight, but the US still faces a massive loan default wave that could erode confidence in the economy. A full economic recovery in a year will be too late for millions of businesses, especially small ones. The Fed says the risks are “severe,” and Disneyland is still laying off workers. Just when you think we are risk-free; we are not.
A big recovery in dividend stocks is coming after sitting in the doghouse for years while big tech hogged the limelight. Phillip Morris (PM) at a 6.7% yield? AbbVie (ABBV) at 5.5%? Williams Co (WMB) at 8.3%? They certainly will draw some buyers in this near-zero interest rate world. High yields REITs are also in for some joy now that a vaccine is on the horizon.
Home Prices are soaring at the fastest rate in seven years. Ultra-low interest rates and a structural shortage create the perfect storm for higher prices. Houses are now seen as “safe” since they didn’t crash 40% like the stock market did in the spring. Mortgage brokers are so overloaded it takes three months to get a refi done. This could continue for another decade.
China’s “Single’s Day” breaks all records, bringing in an eye-popping $116 billion in sales for Alibaba (BABA). US customers were the biggest buyers, eclipsing our “Black Friday” by a huge margin. I told you (BABA) was a “BUY”.
Biden could lock down the economy for 4-6 weeks if new cases keep growing at their current rate. That would knock the pandemic on the nose for good, but is it worth the price? That is an idea making the rounds in the incoming Biden administration. Cases could be peaking at 250,000 a day right around the inauguration. I may not go this year.
Stocks may Go up for years. That’s is what the Volatility Index (VIX) is telling us down here at $22. If we break below $20 and stay there, then the long-term Bull market becomes a sure thing. Stocks are now discounting the end of the pandemic.
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 400% to 120,000 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 120,000 here we come!
My Global Trading Dispatch exploded to another new all-time high last week. November is up 12.31%, taking my 2020 year-to-date up to a new high of 48.34%. That brings my eleven-year total return to 404.25% or double the S&P 500 over the same period. My 11-year average annualized return now stands at a new high of 37.03%.
It was a week of profit-taking on the fully invested portfolio I piled on just before the election. My one new long was in the silver ETF (SLV) and my one new short was in (TLT), both of which turned immediately profitable. I used the one dip of the week to cover a short in the (SPY) close to cost.
It worked in spades.
The coming week will be a sleeper compared to the previous one. We also need to keep an eye on the number of US Coronavirus cases and deaths, now over 10 million and 240,000, which you can find here.
When the market starts to focus on this, we may have a problem.
On Monday, November 16 at 9:30 AM EST, the Empire State Manufacturing Index is out.
On Tuesday, November 17 at 9:30 AM, US Retail Sales are published.
On Wednesday, November 18 at 9:30 AM, US Housing Starts for October are released.
On Thursday, November 19 at 8:30 AM, the Weekly Jobless Claims are announced. At 11:00 AM, the big Existing Home Sales for October are announced.
On Friday, November 13, at 2:00 PM we learn the Baker-Hughes Rig Count.
As for me, I’ll be cleaning off the grime from the last Boy Scout trip of the year up to the giant redwoods of north Mendocino County. I haven’t been up there in 13 years and boy has it changed. The vineyards have ground enormous and entire new exurbs have been constructed. There are only a few apple farms left, where I picked up some nice cider, pie, and bags of fresh apples.
There are still a few bits of the old California left.
Stay healthy.
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
Global Market Comments
November 9, 2020
Fiat Lux
FEATURED TRADE:
(MARKET OUTLOOK FOR THE WEEK AHEAD,
or THE ROARING TWENTIES HAVE JUST BEGUN),
(SPY), (TLT), (TSLA), (CAT), (JPM), (GOLD), (UNP), (UPS), (AMGN)
