The H.E.A.T. Formula
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Our Next Webinar:
Topic: How to Determine the Best Potential Investment Themes.
When: Oct 24,2024 11:00 AM Pacific Time
Register in advance for this webinar:
https://zoom.us/webinar/register/WN_nicbiSSlTwqTDXqOmfd1cA
Why Things Like Factors, Asset Classes, Styles, and Market Cap Diversification are Stupid.
Why most thematic ETFs suck.
How to use first-order, second-order, and third-order thinking to pick stocks and ETFs with the best potential upside.
One below-the-radar theme that could end up being extremely relevant regardless of who wins the election.
There will be a recording sent out to those who register
For Investment Pros Only
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You’re Not Paranoid. The Market Is Out to Get You.-WSJ
To be an intelligent investor doesn’t require a stratospheric IQ. It does require discipline and the ability to think for yourself.
Benjamin Graham, the founder of value investing and author of ‘The Intelligent Investor.’ Photo: Benjamin Graham Jr.
As Graham pointed out, individual investors are “scarcely ever” forced to sell stocks or funds and—unlike professional portfolio managers who are continually measured against the market—are never compelled to care what other investors are doing.
That independence is your single most valuable asset, a luxury most professional investors can only dream of possessing. It’s what Graham called the “basic advantage” of the intelligent investor. But, he warned, “the investor who permits himself to be stampeded [by other people’s behavior]…is perversely transforming his basic advantage into a basic disadvantage.”
Individuals have so many advantages over "professionals", including:
- You don't have to worry about a benchmark of making clients happy
- You can be much more nimble and play in every area of the markets
- You don't have to get locked into valuation, in fact you can't compete with the pros here anyway, they have teams of smart analysts. A manager I know who is having a tough year recently told me they are trying to shift from always looking at valuation of stocks to just buying what everyone else wants to buy.
Themes
European Aerospace & Defense
European space chief says Europe must be able to compete globally-Reuters
The head of the European Space Agency (ESA) has said the region's space industry needs the muscle to compete globally, warning Europe risks falling behind in the new space race.
Major European satellite makers are looking at teaming up as they face competition from Elon Musk's Starlink, with Airbus this week announcing 2,500 job cuts in defence and space.
AI
Own it, AND trade it....
Nvidia’s stock can hit $190 as ‘generational opportunity’ unfolds, says BofA-MarketWatch
A BofA analyst sees room for Nvidia Corp. shares to tack on another 40% or so to their explosive rally, as a “generational opportunity” further unfolds.
BofA’s Vivek Arya upped his price objective on Nvidia shares NVDA to $190 from $165 in a Thursday report, with that target implying 39% upside from Thursday’s close.
AI Power
Nuclear Energy Is Making a Comeback. A New Batch of Stocks to Play the Trend.-Barron's
But the Google and Amazon deals signal a new phase where companies could actually build new nuclear reactors. As a result, a separate group of stocks has begun to rise—companies that are designing, building, and fueling novel kinds of nuclear generators—and they could keep gaining. That includes Nuscale Power, Oklo, BWX Technologies BWXT, GE Vernova, Lightbridge, and Centrus Energy, LEU, all of which rose this week.
LTBR was one that Jeremy Vreeland called out on the Watchlist, I wish I had listened....
Opinion: Uranium and utilities stocks can soar even higher as Big Tech goes nuclear-MarketWatch
Here’s the key angle in the Microsoft deal that’s getting little attention. Microsoft is paying at least 100% over market rates, according to analysis by Morgan Stanley. The price almost feels like desperation. But given the powerful electricity demand trends in store, a few years from now it may look like the tech giant got a bargain.
Bitcoin/Crypto
All the "alternative currencies" have been doing well lately, especially gold, which we talked about on Friday. I already have some Bitcoin positions and some of the miners but I may look to add this week. Daily chart of Bitcoin looks a bit choppy, but weekly looks like it could be on the verge of a breakout.
MSTR and of course MSTU have been crazy, would probably look to buy on dips into the 10 day. MARA could be more interesting as it looks like it wants to break above the 200 day and is a long way from highs.
Hedges
Investors should always have some sort of hedges. How much you hedge is personal taste, but it should be diversified. 13% of my risk capital is short the worst ETF ever invented (it's not ARKK and I have been sworn to secrecy on what it is), that number varies from time to time. I run a SPY 0DTE strategy that often has me in puts overnight. I run a long VIX strategy that for the sake of simplicity basically buys VIX when it is oversold, and I run 3 systematic short strategies, one for ETFs and two for stocks. So while I will do better if the market goes up, stuff like this doesn't matter to me. Now that's way different from trying to tell someone you are a long term investor so don't worry about losses. Or, you only realize a loss when you sell. Both of those statements are stupid.
These 6 charts suggest investors should proceed with caution as S&P 500 hits 47th record high of 2024-MarketWatch
Enjoy the Stock Market Euphoria While It Lasts. Future Returns Could Stink.-Barron's
