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The H.E.A.T. Formula is a radically different way to look at investing your portfolio.

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H- Hedges, you should always have hedges and be agnostic as to being long or short. Bonds are not a hedge

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E-Edges, you should always look for edges. Preferably these are edges with some sort of psychological underpinning, structural edges, or some sort of barrier to entry.

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A-Asymmetric. Everything you do, be it trades or your overall portfolio, should be designed so that heads you win a lot, tails you lose a little.

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T-Themes. You should always be invested in the top themes. Most everything else is just noise.

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We will continue to build out our resources here to help. In the meantime we have a model Hedges and Edges ETF portfolio.

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Coming into this week the key data points will be ORCL earnings today and CPI on Wednesday. On their last call, Larry Ellison was ecstatic about the potential of nuclear power and AI.

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At the moment the only really attractive names are the Magnificent 7 and related stocks. You should already own these however, and I wouldn't chase them up here.

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I have been pounding the table on gold and the miners for a while, and I have been wrong. This may help.....

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China's central bank resumes gold purchases after six-month hiatus in Nov-Reuters

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Meanwhile in China....

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On the ETF side I'm still short REITs (IYR), Homebuilders (XHB) and Energy (XLE). I also did end up adding a short in oil (USO).

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In individual names I added a short in AMSC...

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And IOT.....

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Overall, just not a lot interesting at the moment. I think being long the Mag 7 and related names, short some select sectors and high fliers, isn't a bad place to be.

Hedges

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Been saying this for a couple of days, so far been wrong............

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The stock market’s ‘fear gauge’ is trading at lows. Why retail investors should take note.-MarketWatch

“VIX is not explicitly constructed as a sentiment indicator,” Steve Sosnick, chief strategist at Interactive Brokers, told MarketWatch. “But from a practical sense, what it tells us also is there’s not a lot of institutional demand for hedging.”

Still think the time to buy insurance is when you don't need it.

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Themes

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AI

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Meet the Small AI Chip Maker Now More Valuable Than Intel-WSJ

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I added MRVL to my watchlist. It could be buyable here with a stop somewhere below the low from the breakout (109.57).

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I'll probably wait for the RSI to calm down a bit.

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Meta’s Biggest-Ever Data Center Could Lift These 5 Companies-Barron's

Entergy is probably the biggest beneficiary. The company didn’t reveal all the financial details of its deal with Meta, but it is clearly going to be lucrative for the utility—which just raised its estimates for earnings growth.

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This stock is up almost 50 points since July. Question is do you try to get cute and wait for a pullback that never really comes? Looks like it may want to go sideways for a bit though, so will probably watch for a while longer.

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European Defense

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UK Government unveils new Defence Industrial Strategy-Army Technology

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German arms industry plan seeks fresh boost for a sector once shunned-Defense News

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EU-wide weapon buying boosts bloc’s defense spending to record in 2023-Defense News

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