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I had the honor of doing a podcast with Ari Gutman last week. I talk about the H.E.A.T. Formula and a bunch of other things.....

Open Your Eyes If You Are Trying To Get Wealthy With Dividends

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Strange day yesterday, Powell came out on the hawkish side on rates which pushed the market down, only to see it rally right back up into the close.

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"But the sense of the Committee this is not a Committee that feels like it's in a hurry to cut rates quickly."

Edges

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NY Life is shutting down the IQ Engender Equality ETF (EQUL). The ETF tracks an index of large cap US stocks with the highest gender diversity scores. Since inception it has woefully trailed the S&P 500. I am a huge believer in shattering the glass ceiling, but when you try to pick stocks using anything other than a profit motive this is what you risk happening.

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Interesting. I am obviously a big believer that companies should stay out of politics (ESGX). Is there any edges from the political donations of employees? Perhaps a research project at some point.

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More ESG stupidity. You mean you wouldn't buy the Magnificent 7 if they didn't meet the ESG metrics? Figure all that brain power at Harvard and this is what they waste their time on........

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The Magnificent 7: A Sustainability Perspective-Harvard

The Magnificent 7 perform very well across overall ESG performance, carbon risk, emissions, and temperature scenario alignment as well as adequately on water risk. Nonetheless, they notably lag in alignment with the U.N. Sustainable Development Goals.

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The "dumb" money realizes that profits matter over everything else, while the "smart" money is still using ESG metrics to invest.....

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Institutional Investors Embracing ESG-ESG

Meanwhile, the findings show a separation between institutional investors and smaller retail-class investors when it comes to ESG.

A separate Morningstar report showed that U.S. investors continue to pull money out of ESG mutual funds and ETFs, including $4.7 billion worth of net outflows during the second quarter.

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Further evidence of how f'd up all the big sector ETFs are. Fine for short term trading because they have liquid options, but longer term you are better off constructing your own basket and weightings......

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How Nvidia’s Monster Rally Broke Your Tech ETF-WSJ

Investors in the behemoth SPDR technology sector fund might be surprised to learn that until last week their exposure to Nvidia NVDA 0.03%increase; green up pointing triangle was roughly four times that of Apple, despite their comparable market values.

That disparity was costly for shareholders of the $70 billion State Street fund because Apple AAPL 2.29%increase; green up pointing triangle stock has outperformed Nvidia by 10 percentage points in the third quarter. And, it forced S&P Dow Jones Indices to tear up its rulebook to account for the growing might of the biggest tech companies.

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The ultimate anti-edge.....

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Jim Cramer explains why he’s bullish on Starbucks-CNBC.com

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Time to be bullish was in the 70s.....

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Asymmetrical Risk

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China Shorts Can't Cover Margin Calls After Biggest One-Day Faceripper Since Lehman-ZeroHedge

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Outright shorting is not an asymmetrical risk trade. If you win, you can win big, but in a short squeeze you get crushed. A couple of ways this could have been handled that wouldn't have resulted in a margin call:

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1. Hegde your shorts with call options
2. Buy puts instead of shorting

Still massive upside if you are right. If you are wrong your losses are capped.

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No it isn't.......

Now’s the time for investors to add more bonds to their portfolios. Here’s why.-MarketWatch

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In The H.E.A.T. Formula we suggest 80-90% of your portfolio be in bonds, but T Bills, and this has nothing to do with interest rates and everything to do with being able to generate asymmetrical returns. Bonds as a standalone in your portfolio do not generate asymmetrical returns. Heads you win a little, tails you lose a little but could lose a lot depending on the type of bond doesn't work for us. TLT is a great trading vehicle but I also wouldn't own it long term, unless it's the early 80s and rates are in the teens.

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Themes

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Already keeping an eye on copper because of AI, but this could be interesting....

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Metals Edge Higher on Chinese Stimulus-WSJ

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Metal prices are edging higher in early European trading after major cities in mainland China introduced measures to support the real estate market, but a stronger U.S. dollar weighs on investor appetite.

Prices for nickel, platinum group metals and uranium could temporarily spike should Russia restrict exports of the commodities, Citi analysts say in a note.

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I added a position in FCX yesterday. Really wanted a dip into the 10 day at least but had a sense this could possibly run away from me. If I do get a dip into the 10, or even better the 200, I would look to add more.

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CCJ (Uranium) looks a bit more interesting if it dips into the 200 day and holds. Or does an undercut and rally.

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Platinum also looks interesting, same deal on the dip.

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Agree for now. I don't trust China but I also think you don't fight central banks. I did buy FXI in my countertrend models yesterday, but that's a short term position that I would sell on a rally......

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FOMO on China Stock Rally? Think Twice About Buying In.-Barron's

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Everything Else

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Seems ominous......

‘I will cripple you’ — dockworker’s union vows to shut down U.S. economy with strike-MarketWatch

“These people today don’t know what a strike is,” Dagget said. “When my men hit the streets, from Maine to Texas, every single port will lock down… Everything in the United States comes on a ship.”

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Biden administration doesn't seem to think so.....

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Biden-Harris commerce secretary says she is staying out of potential port worker strike

'I have not been very focused on that,' Secretary Gina Raimondo said

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