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Mad Hedge Fund Trader

About Your Protest-Proof Portfolio

Tech Letter

Social unrest will have NO material effect on tech shares moving forward.

Some investors expected the Nasdaq (COMPQ) index to roll over big time, throttled by a national insurrection. Anti-police-violence protests, some becoming riots, have broken out in more than 60 cities.

However, it appears to be another false negative for the Nasdaq as it motors upwards acting on the momentum of outperformance during the coronavirus.

One thing that the coronavirus pandemic, as well as protests, have taught investors is the unwavering faith in technology’s strength will continue powering the overall market rebound.

Any social unrest will not stop tech shares because they simply don’t subtract from their revenue models.

This will perpetuate into the rest of 2020 and beyond.

Much of the public reaction from big tech has been paying some form of lip service about the national situation being untenable followed up with a small donation.

Apple (AAPL) says it's making donations to various groups including the Equal Justice Initiative, a non-profit organization based in Montgomery, Alabama that provides legal representation to marginalized communities.

To read more about big tech’s donations, click here.

Aside from some PR formalities, it will be business as usual after things settle down.

Apple might suffer some slight inconveniences of having some stores looted, but that doesn’t mean consumers can’t buy products online.

Tech companies simply contort to fit the new paradigm and that is what they are best at doing.

Apple has charged hard into the digital service as a subscription world that has served Amazon, Apple, Google (GOOGL), and Microsoft (MSFT) so well.

To read more about the robust performance of software stocks, please click here.

Many of these tech companies don’t need a physical presence to drive forward earnings, revenue models, and widen their competitive advantages.

That’s the beauty of it and their brands are so entrenched that it doesn’t matter what happens in the outside world at this point.

It’s true that a few tech companies might have to scale back or modify operations until the storm subsides but not at a great scale that will worry investors.

Amazon is reducing deliveries and changing delivery routes in some areas affected by the protests.

Big tech dodged a bullet with the majority of the financial burden falling on the shoulders of big-box retailers like Walmart (WMT) and Target (TGT) and city center-located businesses.

Walmart closed hundreds of stores one hour early on Sunday, but most are slated to reopen. Nordstrom (JWN) temporarily closed all its stores on Sunday.

Amazon (AMZN)-owned Whole Foods are often located in neighborhoods that are perceived likely to escape the bulk of the turmoil.

The events of the last few days will have significant side effects on the normalcy of society or the new normal of it.

Combined with the pandemic, consumers will opt for more spacious housing options in less concentrated areas of the U.S.

The social unrest once again delivers the goodies into the hands of e-commerce as people will be less inclined to leave their house to consume.

A stock that really sticks out during all of this is the leader in interconnected data centers Equinix (EQIX) because of the explosion of data being consumed from the stay-at-home revolution.

Sadly, the price of tech share does not account for life quality which is part of the reason we see stocks lurching higher.  

By the time all the different crises, including coronavirus and protests, are snuffed out, we could be in a world where the only strong companies left are technology, "big tech".

They have an insurmountable lead at this point with guns still blazing.

When you add the windfall of trillions in cash the Fed has pumped out and unwittingly diverted into tech shares recently, it is hard to envision ANY scenario in which the Nasdaq will be down a year from now.

I am bullish on the Nasdaq index and even more bullish on big tech.

Even the supposed “rotation” to value has only meant that tech shares haven’t gone down.

A dip now in tech shares means shares dip for two hours before resurging.

Why would anyone want to sell the best and highest growth industry in the public markets with unlimited revenue-generating potential?

protests and technology

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-06-03 11:02:492020-06-04 16:27:18About Your Protest-Proof Portfolio
Mad Hedge Fund Trader

June 3, 2020 - Quote of the Day

Tech Letter

“I've done a lot of things I'm not proud of, such as getting my girlfriend pregnant when I was 23 and the way I handled that.” – Said Co-Founder of Apple Steve Jobs

https://www.madhedgefundtrader.com/wp-content/uploads/2020/06/steve-jobs-jun3.png 171 219 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-06-03 11:00:452020-06-03 11:41:50June 3, 2020 - Quote of the Day
Mad Hedge Fund Trader

June 1, 2020

Tech Letter

Mad Hedge Technology Letter
June 1, 2020
Fiat Lux

Featured Trade:

(HOW DEEPFAKES WILL DOMINATE THE COMING ELECTION),
(DEEPFAKE TECHNOLOGY)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-06-01 10:04:122020-06-01 10:51:49June 1, 2020
Mad Hedge Fund Trader

How Deepfakes Will Dominate the Coming Election

Tech Letter

There is a dark side of technology that, if not tackled head-on, could result in the breaking of the internet.

That technology is deepfake.

Deepfakes are doctored media forms in which a person in an existing image or video is replaced with someone else's likeness.

To read up on examples of deepfake video content that inserts Leonard Nimoy in a 2009 movie, click here.

Sure, you might have heard about it before.

This is old news, right?

Photoshopping a friend’s face and repurposing onto a famous artist’s face is child’s play.

Or so you thought.

It’s all fun and games when doing it for a little laugh, but doctoring videos to spark a world war is another matter entirely.

So why do I bring up deepfakes now?

It just so happens that the development of deepfakes has accelerated to the point where the real and fake are just about indistinguishable.

The main machine learning methods used to create deepfakes are based on deep learning and involve training generative neural network architectures, such as autoencoders or generative adversarial networks (GANs).

Photo manipulation was developed in the 19th century and soon applied to motion pictures. Technology steadily improved during the 20th century, and more rapidly with digital video.

At the start of 2019, deepfakes were easy to spot, within 5 seconds, there was a high probability that something in the content tipped off its fakeness.

As we push against a point of no return with this specific technology, social unrest has exploded with over 75 cities mired in police protest and public trust at its lowest point in history.

Marry up the social chaos with an upcoming U.S. presidential election and one could understand how events could turn sour if ugliness is supercharged with deepfakes.

It is entirely possible that an offshore deepfake going viral on the internet could unlock the election stalemate.

It is truly a scary situation when doctored media has pulled itself up in quality and the average person does not know when reality stops and starts.

We have already seen a plethora of crude pornography harnessed by deepfake technology in the past two years and that is just the beginning.

With digital storage service space cheap and Facebook allowing any type of extreme content to go live on its platform, the wielding of deepfakes mixed with heavy investment could cause every negatives trend in business and U.S. society to supercharge.

The U.S. think tank The Brookings Institution summed it up concisely by listing the risks that deepfakes will pose: “distorting democratic discourse; manipulating elections; eroding trust in institutions; weakening journalism; exacerbating social divisions; undermining public safety; and inflicting hard-to-repair damage on the reputation of prominent individuals, including elected officials and candidates for office.”

How do tech companies make out in the deepfake world?

As long as Section 230 absolves big tech from content posted on their platform, several monopolistic platforms will come out winners.

Can you imagine Netflix and Apple Plus creating the majority of its content with computer software?

Well, content already exists in the form of Japanese anime, but Netflix will be able to double or triple the amount of software-generated content cutting back on the need to pay humans to produce content that is live in living flesh.

Hollywood and its human actors are already on the ropes, will there be any room for their existence in this deepfake social distance, remote office world?

As the global pandemic has exacerbated negative and positive trends in technology, the volume and quality of fake news will continue to explode to record levels.

This is just the tip of the iceberg.

As it stands, I can barely find what I need when I am searching on Google search anymore because of the clutter of marketing and clickbait that hinders my objectives.

Will users still go on Facebook and watch YouTube videos if the percentage of fake content goes from 10% to 90% because they are bombarded with institutional deepfakes?

I can tell you that these social media platforms aren’t investing in their defense of deepfakes even if they are already banned on their platform preferring to turn a blind eye.

The development of deepfakes is increasing at such a rate that it dwarfs the development of defending authentic content.

To read an instance when Alphabet’s YouTube refused to remove deepfakes of American rapper Jay Z, click here.

That is what happens when the monetary incentives are perverse with the goal of selling the technology to the highest bidder, whoever it may be.

This could truly be the technology that breaks the internet as the law cannot keep up with the pace of fast-developing technology as big tech runs in circles around the White House.

It will be interesting to see if big tech firms monetize it to the extreme or try to do what is best for society. My guess is that corporations will see this as a golden opportunity to get into the world of digital content with famous stars and athletes licensing out their faces.

 

DEEPFAKES ARE HERE TO STAY

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-06-01 10:02:102020-06-01 17:43:37How Deepfakes Will Dominate the Coming Election
Mad Hedge Fund Trader

June 1, 2020 - Quote of the Day

Tech Letter

“I know tech better than anyone.” – Said Current President of the United States Donald J. Trump on his Twitter Account in 2018

https://www.madhedgefundtrader.com/wp-content/uploads/2020/06/donald-trump.png 205 252 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-06-01 10:00:072020-06-01 10:51:01June 1, 2020 - Quote of the Day
Mad Hedge Fund Trader

May 29, 2020

Tech Letter

Mad Hedge Technology Letter
May 29, 2020
Fiat Lux

Featured Trade:

(TRUMP’S TWITTER ATTACK WILL GO NOWHERE),
(TWTR), (FB)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-05-29 10:04:242020-05-29 10:34:30May 29, 2020
Mad Hedge Fund Trader

Trump's Twitter Attack Will Go Nowhere

Tech Letter

I am convinced that Facebook (FB) and Twitter and other social media platforms will suffer minimal damage as a result of the administration cracking down on social media platforms.

The executive order could make it possible for social media companies to become liable for content posted on their platform.

The issue came about after Twitter decided to fact check two of Trump’s tweets.

To read more about Twitter’s decision, click here.

Trump views the fact checks as a personal attack against him and a threat to his ambitions in the political arena.

Section 230 refers to Section 230 of Title 47 of the United States Code (47 USC § 230). It was passed as part of the controversial Communication Decency Act of 1996.

Section 230 says that “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

To read more about the law from Harvard Law Review, click here.

Facebook’s CEO Mark Zuckerberg condemned Twitter’s action saying that social media companies shouldn’t be the “arbiter of truth.”

What I see is President Donald J. Trump putting a massive premium on his Twitter account as the focal point to disperse his opinions and thoughts in the run-up to the U.S. presidential election.

This could be the difference between winning or losing!

This election will be fought tooth and nail on digital platforms and in the realm of global social media, Twitter is one of the most important platforms which is why I am incredibly bullish on the stock.

U.S. Democratic nominee Joe Biden understands the role of digital media in the upcoming election the hard way by being forced to be rooted in front of a webcam instead of rallying the masses at in-person live events.

Unable to round the circuit is an outsized blow for Biden and his digital response to it will be measured up to the Republican’s controversial response to the health crisis.

Trump has Twitter at his disposal and is much more adept at wielding it for his personal and career interests than Biden.

This U.S. election could become a Twitter contest to an extreme degree.

Twitter intruding into Trump’s daily flow of tweets and the backlash resulting from it is a clear signal that Trump is adamant that he can say whatever he wants through his Twitter account and in his mind, that will springboard him to re-election.

Facebook has benefited the most from Section 230 by Zuckerberg building his tech firm into a $650 billion company. Google’s YouTube platform is another outsized winner too.

This is the very law that undergirds Facebook’s entire competitive advantage since the company doesn’t actually produce anything, not even its own content.

Remember that Facebook effectively profits off of other’s personal data by giving digital ad companies the ability to post ads to a specific audience of Facebook subscribers.

I understand that Zuckerberg doesn’t consider this selling personal data and the difference at most comes down to technical verbiage.

I believe it will not devolve to a litigious stage.

This is merely a hands-off warning by Trump who wants control over his Twitter account and destiny up until the November election without any distractions or tech firms playing boss.  

Zuckerberg wants Twitter CEO Jack Dorsey to shut his mouth and continue with the status quo which would mean higher stock prices and extreme wealth generation for everyone involved.

The exorbitant costs associated with auditing content of over 2 billion people keep Zuckerberg up at night.

Artificial Intelligence cannot identify the next threat and its backdated database can only identify what was assumed malicious in the past.

There is simply no way to ensure that 100% of content flowing through these digital arteries is mainstream enough to be deemed acceptable and social media platforms would open themselves up to lawsuits.

The lead up to the 2020 U.S. presidential election will most likely experience record social media engagement and these powerful platforms like Facebook and Twitter are the last tech stocks investors should go bearish on in the short-term.

Trump’s panic at the Twitter fact check is a stamp of approval for Twitter and Facebook.

Buy them on the dip.

trump twitter

 

trump twitter

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-05-29 10:02:242020-05-29 23:09:53Trump's Twitter Attack Will Go Nowhere
Mad Hedge Fund Trader

May 29, 2020 - Quote of the Day

Tech Letter

“A founder is not a job, it's a role, an attitude.” – Said Co-Founder and CEO of Twitter Jack Dorsey

https://www.madhedgefundtrader.com/wp-content/uploads/2020/05/twitter-ceo.png 118 123 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-05-29 10:00:412020-05-29 10:32:30May 29, 2020 - Quote of the Day
Mad Hedge Fund Trader

May 27, 2020

Tech Letter

Mad Hedge Technology Letter
May 27, 2020
Fiat Lux

Featured Trade:

(THE NEXT DIGITAL ARMS RACE IS HERE),
(SPOT), (AMZN), (AAPL), (GOOGL), (FB)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-05-27 10:04:362020-05-27 11:37:17May 27, 2020
Mad Hedge Fund Trader

The Next Digital Arms Race is Here

Tech Letter

The arms race for digital content is on and the next leg of the race is all about podcasts.

Wasn’t it just a few years ago that nobody listened to podcasts but kids?

Well, the surge in popularity recently has been nothing short of unfathomable with podcast personality of the stars such as Joe Rogan raking in 190 million downloads per month.

The "off the beaten path" media vehicle has exploited holes left by legacy media and the numbers back me up.

The tech world has taken note of this growing trend with reports that Apple is preparing to double down on original podcast content, purchasing shows that would become exclusive to its Apple platforms.

Apple (AAPL) would most likely try to sync new podcasts with Apple TV+ content and eventually cross-pollinate the video-streaming service.

Nothing has been as catchy as Spotify’s deep investments into the podcast world with $700 million combined for Parcast, Gimlet, Anchor, The Ringer, and The Joe Rogan Experience exclusivity.

Investors have rewarded Spotify for their aggressive strategy and shares are now trading over $190, up from $110 just a few months ago.

Spotify is all about the digital ad model and the coronavirus pandemic has shown us that TV ads are in a death spiral with ad companies like Facebook (FB) and Google (GOOGL) holding up the digital ad stakeholders.

I will say that the loss of Joe Rogan to YouTube is painful for Alphabet and they could likely continue to bleed big accounts until they cough on the money to buy premium content for itself.

Certain content is worth paying the premium for exclusivity or even overpaying for like a top-five NFL quarterback and podcasts are the new battleground to reach the populace who are fed up with sanitized legacy media who have been throttled by the U.S. culture wars.

“The Joe Rogan Experience” is the top podcast in America in terms of listeners and cultural influence and its over 300 million base is a massive win for Spotify (SPOT).

Rogan has leaped to great heights by interviewing guests like Tesla’s Elon Musk and smoking weed with him on set.

Amazon (AMZN) is reportedly looking for burgeoning podcast talent to fuse with its smart speaker assets.

No doubt the big boys are readying the bazookas.

I believe we are about to see the cornering of all popular podcast shows and the data backs up this strategy for big tech who will most likely become buyers because of their deep pockets.

Over 37% of the U.S. population devour podcasts at least once a month, or 104 million people.

Popular podcasts are ad revenue bell cows.

For instance, Rogan advertises directly to his audience and has brands backing him such as 23andme, Blue Apron, Square’s Cash App, Casper, Dollar Shave Club, Postmates, and Quibi.

The number of monthly podcast listeners jumped 16% in the last year and has doubled since 2015.

Over 55% of monthly podcast listeners are between ages 12 and 34 meaning the content is influential to the daily discourse of popular culture and an incubator of trend formation.

Barstool Sports has more than 30 podcasts and is a top 10 U.S. podcast publisher, with more monthly podcast listeners than sports channel distributor ESPN.

Podcasts are here to stay and the industry’s best will gravitate towards the most lucrative offers.

It doesn’t matter what platforms want to host them because their giant audiences will follow.

After Spotify’s buy of Rogan’s podcast, Apple, Facebook, Google, and Amazon must be contemplating their next move.

The reason we promulgate trades in big tech is because of their nimbleness in adapting their revenue models to the revenues drop off points.

The acceleration of entrenched trends like cord-cutting and digital media adoption offers a great boost to digital products like podcasts.

In the past quarter, legacy media has lost another 2 million subscribers representing a 6% loss.

Keeping tabs on who scoops up the best podcasts will be a lead indicator in who is harnessing funds to secure the best digital content.

My guess is that it is big tech and they will only become more diverse and powerful.

Digital content podcasts

 

digital content podcasts

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-05-27 10:02:322020-05-27 21:23:20The Next Digital Arms Race is Here
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