Dear New World Investor:
Tuesday was a 17:1 up day (advancing volume/declining volume), the best day since March 24, 2020. Combined with Friday’s 11:1 up day, it was the second 10:1 up day in three sessions. In the past, after two 10:1-or-better up days within three months without a 10:1 down day in between, on average the S&P 500 has more than doubled its long-term average gain one, three, and six months later.
Yet the combination of asset managers and leveraged funds (mostly hedge funds) has one of the biggest net short positions in the last 15 years. A reversal could be fuel for a dramatic breadth thrust upward.
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The S&P 500 rallied 5.5% since last Thursday as depressed big tech stocks caught a bid. The Index has exited bear market territory and is up 10.0% from its June 17 low but still is down 16.1% year-to-date. It has to close over 4364 to be up 20% and have people call it a new bull market.
The Nasdaq Composite gained 7.2% on the tech stock rally and is down 22.9% for the year. The small-cap Russell 2000 won the week, up 7.4%, and is down 18.3% in 2022.
Yet, as a Goldman Sachs trader said this morning, this is one of the most hated rallies ever. Retail investors are very negative. Small options traders are spending more on leveraged, expiring bets that stocks will fall than they spend on bets that stocks will rise. SentimenTrader says that shows a rare level of rock-bottom morale that has preceded the end of the last two bear markets.
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And the American Association of Individual Investors are just starting to turn more bullish. Bulls in the latest survey were up three points to 29.6%, the most since June 1, but they still are overwhelmed by 42.2% bears.
The institutions are equally negative (but with a lot more dollars). The net short position in E-Mini S&P 500 Index futures contracts is reaching extreme levels. Looking back to 2010, if you had invested in the Index when net shorts were this high, one year later you would have gained an average of 22.8%.
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High cash levels in the BofA Global Fund Manager Survey is another very bullish contra-indicator. If you had invested in the S&P 500 during each of the circled periods, the probability of making money 12 months later was ~86% and the average gain was 19.7%.
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The fractal dimension stopped going down just above the 30 level that signals the end of a trend, but – close enough. We’ve been going sideways or trending a skootch up for five weeks now. The 38.2% retracement of this year’s drop is at 4088, so that is a reasonable target for this consolidation phase.
Top 5
Changes this week: Removed AGNPF from Near-Term, results reported
Near-Term – chronological order
AAPL Apple – September new iPhone introduction
OIL iPath Pure Beta Crude Oil Exchange-Traded Note – crude should rise quickly
GBTC Grayscale Bitcoin Trust – Bitcoin is coming out of one of its periodic sharp drops
META Meta – Bounce from overdone selloff
VLD Velo3D – Rapid revenue growth; low market cap
Long-Term – alphabetical order
GRPH Graphite Bio – second-generation genetic editing
NVTA Invitae – the winner-take-most of genetic testing
META Meta – a leader in the metaverse
RKLB Rocket Lab – #2 to SpaceX in space
VLD Velo3D – Return manufacturing to the US
Economy
The latest Atlanta Fed GDPNow forecast for June quarter real GDP still is negative at -1.6%. The Blue Chip Economists still are positive at +2.0%, and the Wall Street consensus is +1.0%.
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The first estimate will be released next Thursday morning, after the Fed announcement on Wednesday. They are almost certain to announce another 0.75 point increase in the Fed funds rate. If the GDP print is negative and if the following day’s monthly change in the core Personal Consumption Expenditures Index falls back to +0.2% or less, the Fed will be forced to back off and stocks will shoot up.
The latest University of Michigan survey of consumers showed consumer sentiment rose modestly in July to 51.1 from June’s all-time record low of 50.0. In good news for the Fed, long-term inflation expectations fell sharply from June’s 3.1% to 2.8%. Many prices are falling, most notably gasoline. Expectations for the economic outlook fell to 47.3, the lowest since 1980. People are very aware that the economy is slowing. A recession is now the consensus.
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Initial jobless claims for the week that ended July 16 rose to 251,000 versus the 240,000 estimate, the highest level since November 2021.
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Coming Events
All times below are ET, and most presentations and slides are archived on the companies’ websites so you can listen to them. Earnings reports Tuesday, Wednesday, Thursday. Fed + GDP + PCE Wednesday-Friday.
Tuesday, July 26
AG – First Majestic – Through 7/29 – Rule Symposium Natural Resource Investing
GLW – Corning – 8:30am – Earnings conference call
Short Interest – After the close
Wednesday, July 27
Fed meeting – 2:00pm – +0.75% (+75 basis point) increase expected
META – Meta – 5:00pm – Earnings conference call
Thursday, July 28
June quarter real GDP – 8:30am – First estimate; +1.0% consensus expectation
AAPL – Apple – 5:00pm – Earnings conference call
Friday, July 29
Personal Consumption Expenditures Index – 8:30am
The $20-For-$1 Stocks
Say you put $2,000 into a stock that goes from 50¢ a share to $10. The $2,000 turns into $40,000. Then you put the $40,000 into another stock that goes from 50¢ to $10. That turns the $40,000 into $800,000. You did it with two stocks, and never risked going negative more than $2,000. (Not that you won’t be mad at me if the first one works and then the second one doesn’t, taking your $40,000 to Money Heaven.)
If you can afford it – and it would not be too big a position in your portfolio – putting $2,000 into each of these 12 speculative biotechs might be a good way to start.
The market capitalizations of these recommendations are typically very low. At the same time, Initial Public Offering valuations had moved very high. We were seeing $750 million to $900 million valuations for a good preclinical/Phase 1 IPO, and even $300 million to $500 million for mediocre Phase 1s. I don’t see how investors make 5x to 10x in a reasonable, three- to four-year period if they buy at those valuations. How many biotechs have moved north of $10 billion within 5 years after pricing an IPO in the $700 million to $900 million range? Hardly any. Buying these out-of-favor, fallen, or forgotten companies that can get important products through the FDA at very low market capitalizations seems like a much better strategy to me.
Risks
Development-stage biotechs are subject to investor sentiment swings from wildly optimistic to excessively pessimistic – mostly the latter recently. After the Primary Risk for each company, I’ve added the clinical stage of their lead product, the probable time of their first FDA approval, and the probable time of their next financing.
As always, you need to think about an appropriate position size. You could buy a full position upfront and then just hold on, or buy some upfront and leave room to add more on the inevitable financings, transient clinical trial setbacks, and the like.
Algernon Pharmaceuticals (AGNPF – $2.40) announced the top-line data for the Phase 2 trial of Ifenprodil for idiopathic pulmonary fibrosis (IPF) and chronic cough. I’d say they were mixed. Although the stock got a little bump after the announcement, it’s been giving ground ever since.
It’s important to realize this was a small trial of 20 people, so it’s very hard to hit statistical significance on anything. Plus, they didn’t have a placebo arm; they reported “anticipated placebo effects,” whatever that is. Thirteen of the 20 patients – 65% – had stable or improved forced vital capacity (the amount of air that can be forcibly exhaled after taking the deepest breath possible) over the 12-week treatment period, which was statistically significant compared to the anticipated placebo effect of 40%. They also had trends to reduction in many of the serum markers that were associated with increased mortality and risk of disease progression in previous research studies. That data did not reach statistical significance.
For the chronic cough part of the trial, 30% of patients achieved the primary endpoint of a 50% reduction in the average number of coughs per hour over 24 hours from baseline to week 12. This did not achieve statistical significance when compared to an anticipated placebo effect of 25%.
But the secondary endpoint of actual changes (reduction) in cough counts did. Patients experienced a 24% relative reduction from baseline in mean cough count, and a 38% relative reduction from baseline in median cough count in their 24-hour cough count per hour at week 12 (p=0.0344), and 75% of subjects saw improvements in their cough over 12 weeks.
The press release quotes several doctors saying Algernon should go on to a Phase 2b trial and management went on a full-court media blitz – see HERE, HERE, HERE, and this:
These results weren’t great and weren’t awful. AGNPF still is a Hold for the Phase 2b IPF/chronic cough results.
Primary Risk: Ifenprodil fails in clinical trials.
Clinical stage of lead product: Phase 2/3
Probable time of first FDA approval: 2023
Probable time of next financing: 2022
Compass Pathways (CMPS – $14.25) appointed a new CEO as the founder transitions to Chairman of the Board. This looks like a planned, methodical transition. CMPS is a Buy under $20 for a very long-term hold to a 10x.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 2
Probable time of first FDA approval: 2024
Probable time of next financing: Mid-2023
Inovio‘s (INO – $2.10) new CEO announced an 18% reduction in full-time employees and an 86% reduction in contractors to cut operating expenses by 30% over the next 18 months. INO is a Buy under $7 for a very long-term hold.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 3
Probable time of first FDA approval: 2023
Probable time of next financing: Mid-2024
Invitae (NVTA – $2.35) replaced CEO Sean George with the current Chief Operating Officer to signal to Wall Street they are serious about cutting costs and getting to cash flow positive. Sean stays on the Board and Randy Scott, cofounder and former CEO, returns as Chairman of the Board.
They said they will report about $136 million in revenues for the June quarter, short of the consensus estimate for $142.74 million and even slightly below the lowest estimate of $138.9 million. They said revenue in the second half of 2022 will be flat with the first half, leading to a low double-digit growth rate for full year 2022 over 2021 in spite of the impacts of the strategic realignment. They expect 2023 to be an “adjustment year” and for longer-term revenue growth rates to return to between 15% and 25% beyond 2023.
They have $737 million in cash, which will carry them to the end of 2024. They are maintaining the previous 2022 cash burn guidance of $600-$650 million, which includes an estimated $75-$100 million to be used for reorganization activities and severance. They also expect cash burn in the range of $225-$275 million in 2023, a $325-$425 million reduction from expected 2022 cash burn. That should make Wall Street happy. Buy NVTA under $10 for a first target of $50 and eventually $100+ when they become the Amazon of genetic testing.
Primary Risk: A competitor starts taking significant market share.
Clinical stage of lead product: NM
Probable time of first FDA approval: NM
Probable time of next financing: Not needed
Biotech & Digital Dominators MegaShift
There are at least four ways to make money in the stocks of these large, growing, dominant companies. You can:
* * Buy a stock and hold it
* * Buy a stock and write a call option against it
* * With a Level IV options account, write an out-of-the-money put option
* * With a Level IV options account, write an out-of-the-money put option and use part of the premium to buy an out-of-the-money call option
Apple (AAPL – $155.35) released a 60-page white paper detailing how the Apple Watch will be at the forefront of healthcare in the coming years, both monitoring known problems and using diagnostic technology to detect early signs of cancer, heart disease, diabetes, and other conditions. AAPL is a Buy under $150 for new iPhone rollouts and augmented/virtual reality products.
Gilead Sciences (GILD – $61.01) signed a new joint procurement agreement the European Commission today for Veklury (remdesivir) for participating Member States across the European Union (EU) and European Economic Area (EEA). The agreement covers purchases of Veklury over the next twelve months and has the option to be extended for an additional six months. They didn’t put a price tag on it, but it will be significant. GILD is a Long-Term Buy under $70 for a first target of $100.
SoftBank (SFTBY – $20.09) reportedly has put their plans for a London initial public offering of chip designer ARM on hold due to the political turmoil in the UK government. I still think the main offer will be on Nasdaq, as soon as the market opens up. SFTBY is a Buy under $25 for a first target of $50 in the next two years.
Other Tech
Velo3D (VLD – $3.38) partnered with Hartech Group, an advanced technology equipment supplier for the US federal government, to distribute Velo3D’s additive manufacturing technology to government agencies, including the Department of Defense. The partnership makes Hartech Group a preferred distributor for the federal government for Velo3D. VLD is a Buy up to $6 for my $50 target as Velo3D’s high-tolerance metal parts printing business grows.
Primary Risk:A new 3D metal printing competitor emerges.
Probable time of next financing: None needed
Inflation MegaShift
Gold ($1,717.00) moved up a bit from yesterday’s 11-month low, but still is vulnerable to a stronger US dollar as the Fed raises interest rates. The 61.8% retracement level at $1,705 has been a line in the sand for several days now after five weeks of a downturn. The fractal dimension still shows all of this as a long consolidation with tons of energy to power the next upturn.
Miners & Related
First Majestic (AG – $6.77) produced 7.7 million silver equivalent ounces in the June quarter, up 20% from last year, consisting of 2.8 million ounces of silver and 59,391 ounces of gold.
On the conference call (AUDIO HERE), management sounded very confident. In the second half of 2022, they expect a further 25% production increase in total silver equivalent ounces compared to the first six months. That translates to 17.6 to 19.6 million silver equivalent ounces. They drilled 76,444 meters during the quarter and have 30 active drill rigs. Financial results for the quarter will be released on August 4.
They renewed an At-The-Market facility with BMO Capital Markets and TD Securities to sell common shares for gross proceeds of $100M from time-to-time until June 18, 2023. AG is a Buy under $11 for a $23 next target price as production increases and the price of silver rises.
Primary Risk: Prices of precious metals fall due to US dollar strength.
Cryptocurrencies
Cryptocurrencies are a diversifying asset that offer a unique opportunity to make (or lose!) a lot of money quickly. You can easily buy Bitcoin and other cryptocurrencies at Coinbase, Block, or Robinhood.
Bitcoin (BTC-USD on Yahoo – $23,034.03) shot up to $24,000 and then backed off a bit after Elon Musk said Tesla sold 75% of its bitcoin for almost $1 billion. I’m not worried about that – Tesla needs the cash on its balance sheet.
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BTC-USD, ETH-USD, GBTC and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Oil – $96.34
Oil popped back over $100 after Saudi Arabia admitted it will have a hard time increasing production, including nothing in response to President Biden’s visit. Crown Prince Mohammed bin Salman told the leaders of the US, the Gulf Cooperation Council (GCC) states, Jordan, Egypt, and Iraq at a meeting last weekend that additional capacity to increase production to 13 million barrels per day (bpd) by 2027 will be challenging.
The Kingdom’s production stands around 10.5 million bpd and it has a production capacity ceiling of 12 million bpd. That means the potential output increase is only 1.5 million bpd now and then another million bpd in five years. But people familiar with Saudi oil flows said the Kingdom would struggle to produce another half million bpd to get to 11 million bpd. And it would be very tough to get production to 12 million bpd. They gave a handful of reasons why bringing on spare capacity would be a troubling task, such as maintenance requirements, declining production at some oil-producing fields, and technical issues involving pressure levels.
But there clearly is softness in US gasoline demand and crude stocks are building a bit instead of getting pulled down week after week. Refining margins – the “crack spread” – are below $40 a barrel, the narrowest in over three months. So gasoline prices can fall even if crude oil doesn’t, and crude closed today back under $100 on recession fears.
But the world still is short of fossil fuels, so it still looks to me like we are headed for $130 or so in the near term, perhaps by the end of the year, and that will be about it. I’m still targeting $300 a barrel by 2026.
The July 2026 Crude Oil Futures (CLN26.NYM – $53.16) are a Buy under $55 for a $200+ target.
The iPath Pure Beta Crude Oil Exchange-Traded Note (OIL – $32.10) is a Buy under $36 for an $80+ target.
* * * * *
Today is the 53rd anniversary of the first walk on the moon
* * * * *
This is why threatening to terminate his acquisition of Twitter is – by far –
the most rational (and optimal) strategic play for Elon Musk.
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* * * * *
Your focused on where stuff comes from Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Check out the complete Portfolio page HERE.
Buys
These are the stocks everyone needs to own because transformative events are happening over the next year or two, and I expect to hold them long-term.
$20-for-$1
Aptose Biosciences (APTO – $0.81) – Buy under $2.50, ultimate target $30
Bellerophon Therapeutics (BLPH – $1.51) – Buy under $5, first target $30, then $100
Compass Pathways (CMPS – $14.25) – Buy under $20, hold a long time for a 10x return
Graphite Bio (GRPH – $3.29) – Buy under $9, hold a long time
Inovio (INO – $2.10) – Buy under $7, hold a long time
Invitae (NVTA – $2.35) – Buy under $10, first target $50, then $100+
Medicenna (MDNA – $1.37) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $2.14) – Buy under $2, target price $20, then $50
Other Biotech
TG Therapeutics (TGTX – $6.66) – Buy under $7, target price $25+
Tech Dominators
Apple Computer (AAPL – $155.35) – Buy under $150 for new iPhones
Corning (GLW – $34.85) – Buy under $33, target price $60
Gilead Sciences (GILD – $61.01) – Buy under $70, target price $100
Meta (FB – $183.17) – Buy under $250, target price $400
SoftBank (SFTBY – $20.09) – Buy under $25, target price $50
Other Tech
First Trust NASDAQ Cybersecurity ETF (CIBR – $43.65) – Buy under $40; 3- to 5-year hold
Fastly (FSLY – $12.60) – Buy under $20; 2- to 5-year hold to $80+
PagerDuty (PD – $28.13) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $8.98) – Buy under $10, target price $40
Liberty Media Acquisition Corporation (LMACA – $9.85) – Buy under $10, target price $20 to $30
Rocket Lab (RKLB – $4.36) – Buy under $13, target price $30+
Velo3D (VLD – $3.38) – Buy under $6, target price $50
Inflation
A Short-Sale or REO House – $447,000 – Buy while fixed mortgage rates are low
Bag of Junk Silver – ($18.75) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $22.47) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $27.49) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $16.13) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $24.25) – Buy under $30, target price $50
Coeur Mining (CDE – $2.77) – Buy under $5, target price $20
First Majestic Mining (AG – $6.779) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.44) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.576) – Buy under $10, target price $25
Sprott Inc. (SII – $35.84) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $23,034.03) – Buy
Grayscale Bitcoin Trust (GBTC – $15.04) – Buy
Ethereum (ETH-USD – $1,576.75) – Buy
Grayscale Ethereum Trust (ETHE – $11.72) – Buy
International & Other Recommendations
EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $32.29) – Buy under $38 for a $66 target in 12 to 18 months
KraneShares Bosera MSCI China A Share Fund (KBA – $35.64) – Buy under $40 for a three- to five-year hold
Morgan Stanley China A-Shares Fund (CAF – $16.12) – Buy under $18 for a three- to five-year hold
KraneShares CSI China Internet ETF (KWEB – $31.00) – Buy under $40 for a double over the next three years
Acreage Holdings (ACRDF – $1.05) – Buy under $2 for the Canopy Growth merger
Mongolia Growth Group (MNGGF – $1.30) – Buy under $1.30; long-term hold
Energy
Crude Oil Futures – July 2026 (CLN26.NYM – $53.16) – Buy under $55; $200+ target
iPath Pure Beta Crude Oil Exchange-Traded Note (OIL – $32.10) – Buy under $36; $80+ target
Energy Fuels (UUUU – $5.81) – Buy under $8; $30 target
Holds
These are holds but not sells – yet. They could get moved back to one of the buy categories if their prices drop or outlook improves, or they could become sell recommendations in the future.
Algernon Pharmaceuticals (AGNPF – $2.40) – Hold for IPF/chronic cough trial
Akebia Biotherapeutics (AKBA – $0.44) – Hold for FDA meeting
Arch Therapeutics (ARTH – $0.06) – Hold for buyout
CohBar (CWBR – $0.19) – Hold for human trials of CB5138-3
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Going for the gold.
MM–you continue to display a tunnel vision view of inflation. Sure, some prices are falling, but until we see a moderation and then reduction of overall money supply, inflation will remain a threat. Please report M6 money supply figures.
The money supply has started to fall, but the trouble with using it to forecast inflation is that velocity is so volatile. If velocity falls as the money supply increases, inflation is dormant (and vice versa). I look at actual prices of the items that pushed up inflation, like lumber, oil, used cars, etc., and most of them have been falling for weeks.
Did you ever hear Milton Friedman talk about velocity of money? I think low velocity is irrelevant to eventual inflation, unless the money supply falls first. The big picture is that even if the money supply has started to fall, it is still way up from the Trump days. Read my recent post that if XYZ prices fall, there is more money around for ABC prices to rise, unless money supply returns to the Trump days.
Algernon will never get the funding needed to do a larger trial for anything. Their small trials will never show statistical significance, and the chronic cough results are only mixed. What a loser.
They never intended to do a large trial. Their strategy is to skip Phase 1 (already approved drug), do Phase 2a&b, then license. I think it will work but I’ve come to realize it can never be a big winner.
I was encouraged by their small 450 patient trial in covid, but nobody stepped up to fund a phase 3 1900 patient trial for covid. Nobody will purchase a license either. It is a shame that there is lack of interest from Big Pharma.
3??
I am glad to see Musk is getting out of the Twitter deal. Even with the big 1 billion price tag he has to pay for his “mistake “ it’s still the better option. IMO. And the fact that he is selling his bitcoin at these bargain basement prices shows his urgent need for cash. He wasn’t planning on the market’s latest meltdown and got caught up in collateral damage, and the shutdowns in China with the shortage of chips and materials for battery manufacturing was a double/triple whooping. As another investment advisor states, Tesla is a good car, the stock not so much.
John Miller.Yes, he is going to be selling toys, I hear from Space ex . Just a bit of a joke, but real story. I did like the idea of an open social media instead of Facebook as the phantom Zuckerberg political party
Any billionaire with a great business doesn’t have to worry about passive investing, either in blue chip stocks or speculative stuff like bitcoin. Even small business owners do most of their investing in their own business.
Great Radar Michael Murphy. Lots of complexities governing the health of this economy, including Russia and China setting up for something and weak partners in Europe who went too “climate Changer” when the real story looks likea fossil in transition over the next 50-100 years Weather is not Climate, sometime rising water is really tectonic plates taking a dip, Suggest folks read Steve Koonin (“Unsettled”) not the small version, Climate change policies are killing economies and people and call for long term adjustments, Carbon is not a total enemy and if we get momentum in the wrong way, we get no trees or grass or crops. Uranium is fine for clean water emissions but the cost is still a problem along with maintenance and qualifies staffs, etc, etc. In new England we need a dedicated natural gas pipeline now or blackouts are on the way,. Here’s hoping for more green in our portfolios. Be well and prosper.
Right. Carbon dioxide is NOT a pollutant, but is what plants use for their own growth and make oxygen for the animal community. Since I eat lots of vegetables, I want plants to thrive by getting all the carbon dioxide they need.
MM and All: is anyone buying AKBA? I’m reading strong buy as they have $112M cash balance, Q1 revs +36%, an approved drug generating at least $170M/yr BUT the market cap is only $65M! What am I missing?
A good binary bet. The FDA was likely careless in hastily reviewing data for dialysis and non dialysis. If they remain stubborn at the next meeting, the stock plunges from here. If they are rational and don’t continue their politically motivated sabotage, AKBA is a winner.
If the FDA is stubborn, look at the price/sales ratio, and how long the cash will last before bankruptcy.
I’m confused, the fda Dr idiom is already priced in, and they have an approved drug selling more than the market cap, do they not?
Sorry for the typo, I meant the fda decision is in the price already so why more downside?
I think you are right about everything. The risk in the stock is if the FDA remains negative, and then we have to wait until the company becomes profitable. What is their debt level and expense for servicing the debt? How long will their $112M cash last? After that, dilution will be a factor in the stock price. I forgot if they have to share revenue with any partner.
MM–please analyze these factors. At the very least, AKBA is a reasonable speculation on whether growth in revenues will eventually result in positive earnings. At best, with FDA coming to their senses, it is a great blue sky bonanza from here.
FDA’s High Handedeness is Obvious – No one to Question them ?
Hope Justice prevails.
MM and all – is there a chip stock that is still a good buy given the governments decision to support domestic production (thst Pelosi hasn’t already bought with insider info?!)
Intel is supposed to be a big recipient of the new shift to US chip production. In fact was part of the decision to pass the current technology legislation. Apparently, the CEO called the people in power and threatened to pull out of their new multi billion chip fabrication in Arizona if the bill did not get passed. Also there is the threat that China will take over Taiwan and TSM which now builds the lion share of world wide chip production. Thereby giving China a stranglehold on international chip production. But it a long term position because short term there will be some volatility. IMO
A year ago, there was a flurry of supposed linkage between TSM and multiple joint adventures in countries like Korea, Japan, USA and others in the orient and the west.
Previouly, they had most of their advanced manufacturing on Formosa with some older products elsewhere in Asia outside of Chinese doverage.
My count was that a new technolofy “fab” runs something likethis:
Year 1: Getting the site and new physical building (No high tech)
Year 2 Getting the new technology equipment and staff for actual
semiconductor production in and running well
Year 3 Initial stable production working of new staffed site
Year 4 Multiple customers get their new custom technology parts
What is missing from this is the technology staff to make this
all happen. Hosts such as Samsung, Intel and even a new
generation of new graduates are the new stafff in each pnase
Meanwhile, China has it’s own problems on Formose, including
stealing back those same new era capabilities
The only US companies that know how to make modern semiconductors are Intel and IBM. Some would add Texas Instruments (mostly with an analog component), and (memory only) Micron.
Do you agree with jcs’s timeline? Will TSM establish these fabs in other countries in time to thwart the serious possibility of Chinese invasion and takeover of Taiwan?
@Steve, Hate to see the crony capitalisn with the chippers, as there’s a lot of U.S. higher education MIT, Harvard, UCLA, Houston, etc espionage going on under the rubric of visting students from China and other places putting pieces of etching on chi[ps together. So, it is kind of stupid to pretend this chip grant is gonna build great innovative buildings, If you think about good leadership and innovation, I think AMD with Sue are winners and MU is full of talent and wide demand areas, as two of the better bigger folks. JMHO.
Follow Pelosi. Nvidia (NVDA)
AMD and NVDA are the biggest no brainers in the market. Why are you so behind the curve?
ENPH is another killer. Mike, wake up.
Bought more Graphite Bio (GRPH)
One day after Russia signs an agreement with Ukraine about wheat exports they bombed the port city of Odessa. Also they cut back on the flow of the pipeline to 20 percent. Leaving Europe in a lurch to fill up their storage for the coming winter. Several oil companies will report earnings and blow the market up. IMO.
Nouriel Roubini, Dr. Doom argues that we face significant recession AND a huge debt crisis that will lead to severe stagflation, worse than the late 70’s and 2008 put together. Target SP500 of 2400 or lower.
Yellen says that with large job growth of 400K monthly, there is no recession. But she doesn’t understand or stubbornly denies root causes. Root cause of our current economic misery–huge money printing. That enabled the job growth, as well as huge inflation. Many more interest rate increases and contraction in the money supply are coming. That will cause a recession. Then job numbers will be negative, and then Yellen will say, OOPS we have recession.
Is there no end to the fall of NVTA ?
Right there feeling the pain with you frank,unbelievable having the membership buying nvta up to 50 dollars a share ,mm will come out and say he bought more why not it can go down another 1.90 a share.his picks have changed my outlook and we’ll being,try to stay well frank
You know my analysis that NVTA won’t become a significant part of mainstream medical practice anytime soon. Hopes that NVTA will become the Amazon of genetic testing may be true. True in the sense that Amazon ran losses for years, and so will NVTA. But the universality of goods sold on Amazon allowed them to become part of everyone’s lives. BUT–NVTA will never become a part of the lives of anyone except a small segment of the population. The severe cost cutting in routine medical practice such as lack of formulary coverage for basic diabetic drugs like Januvia/Janumet means that the nuanced care with genetic testing is laughably out of place in mainstream medicine.
What is different about relatively uncommon diseases like leukemias, hepatitis, multiple sclerosis, etc.? These diseases are treated with very expensive approved drugs, so even if case numbers are low, the total revenue is high. NVTA cannot achieve high revenues from relatively inexpensive tests and small numbers of cases where this is applicable.
Don’t listen to financial analysts who are out of touch with medical practice realities.
INFLATION–A 240 capsule bottle of organic flaxseed oil at the Vitamin Shoppe just went up to $21.99 from $19.99. That’s 10% inflation overnight. Let’s see how many more times this year it goes up like that.
Flaxseed oil is important to anyone who pursues optimum health. That makes it a CORE essential. In my book, this 10% overnight inflation is CORE inflation, so whether it is considered part of the so-called volatile food inflation or core inflation is a ridiculous distraction from the FACT that inflation remains a serious problem.
The US is now a banana republic under this administration.
Seek help.
Recession….down nine tenths of one percent. No, says the White House. Market rates are going down. Talking heads are disappointed. Inflation hanging on,
The so-called chips bill is over a trillion dollars with lots of Christmas tree ornaments headed to the House for reconciliation, absolutely suicidal, IMHO.
Bought more NVDA. Nibble, nibble, nibble.
SCYX up over 15% today. What’s up?
Got oil?? Brazil’s Petrobras PBR announced a whopping $17 billion dividend payout. Can’t wait to see that in my account.
Bought 82 Apples @$157.00. Before close.
The new Radar Report for 7.28.22 is posted.