Dear New World Investor:

So the Fed continued their pause and said they don’t see inflation reaching 2% until 2025, which implies these rates or higher for another 18 months to two years. I expect a new record length of time between the last rate hike and the first rate cut.

Click for larger graphic h/t @WinfieldSmart

That’s not what was expected, which was inflation nearly tame by the end of 2024 and rates coming down, but my reaction is GOOD. We need to get back to a normal financial environment, where capital has a price (5% for 10 year bonds seems about right to me), savers get paid, and companies that can’t earn rates of return higher than their cost of capital go out of business. In that environment, high Return On Investment (ROI) companies like – you guessed it – technology get a well-deserved premium valuation.

The Fed continues to normalize its balance sheet – another healthy move – by letting bond mature. Several forecasters say the recent tightening in financial conditions could be worth between half a percentage point and a full percentage point (50 to 100 basis points) in Fed-funds-rate equivalent increases.

Click for larger graphic h/t @NickTimiraos

Even though Powell said: “The Fed did not put a recession back into their forecast,” I still think we are headed for a shallow, brief recession, probably in the March and June quarters. Americans have a way of making holiday spending happen, so while the December quarter will be weak (the Atlanta Fed’s GDPNow model is at +1.2% while the Blue Chip economists are at +0.9%), it will be up. Then the used-up-covid-savings/credit card debt/student loan repayments should tip the economy into a two or three quarter mild recession, just in time for the Presidential election.

Things are weakening pretty quickly. The ISM Manufacturing PMI reported a surprise turn to further contraction, 46.7 versus 49 prior and the 49 estimate. Below 50 is contraction. Manufacturing Employment was 46.8 versus 51.2 prior and the 50.3 estimate. Manufacturing New Order were 45.5 versus 49.2 prior.

I think that Powell is being smart and prudent in waiting to see what the lag effects are going to do because this is the most aggressive Fed rate hike campaign in all of our lifetimes.

Market Outlook

The S&P 500 added 200 points and 4.4% since last Thursday, with yesterday benefiting from the biggest daily drop in yields since March. After its first three-month losing streak since March 2020, the Index is up 12.5% year-to-date. The Nasdaq Composite gained 5.5% thanks to good September quarter earnings and falling interest rates. It is up 27.0% for the year. The benchmark small-cap index, the Russell 2000 climbed 3.5% but still is down 2.7% in 2023. Last Friday, it hit the lowest levels since November 2020, when the world was still without a vaccine and shut down from Covid.

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Both professionals and retail are overwhelmingly negative. The Goldman Sachs Prime book was sold for the third straight month in October. The main reason is heavy shorting. Goldman notes: “The combined net selling from August to October across global equities was the second largest over any three month period in the past 10 years (only Q1:22 was larger) and ranks in the 99th percentile.”

Good luck explaining to your boss that you shorted the recent lows in size and intend to keep that into yearend.

Click for larger graphic h/t The Market Ear

The spread between AAII bulls minus bears has cratered and is trading at the lowest levels since May. The move lower in the spread has been brutal. The bounce in equities is surely frustrating the new bears.

Click for larger graphic h/t The Market Ear

The fractal dimension reversed quickly, showing the most recent decline is just consolidation of the prior uptrend, not a new downtrend. I expect this back-and-forth volatility to continue for a while, if only because of Ukraine and Israel, but the yearend rally is still on.

Top 5

Changes this week: None

Near-Term – chronological order
TGTX TG Therapeutics – Rapid recovery from overdone pullback
EQT EQT –natural gas price rebound
USL United States 12 Month Oil Fund, LP – crude should rise quickly
FCX Freeport McMoRan – copper shortage this fall
SFTBY SoftBank – for ARM IPO valuation
AKBA Akebia – Vadadustat NDA filing 2023; approval 2024
VLD Velo3D – Rapid revenue growth; low market cap

Long-Term – alphabetical order
EQT EQT – largest US natural gas company
GBTC Grayscale Bitcoin Trust – Bitcoin is headed for $100,000
NVTA Invitae – the winner-take-most of genetic testing
META Meta – a (the?) leader in the metaverse
RKLB Rocket Lab – #2 to SpaceX in space
SCYX ScyNexis –First new antifungal in 20 years
VLD Velo3D – Return manufacturing to the US

Coming Events
All times below are ET, and most presentations and slides are archived on the companies’ websites so you can listen to them.

Friday, November 3
ACRDF – Acreage Holdings – Unspec. – Business of Cannabis: New York
October payrolls – 8:30am – +180,000 expected; September was +336,000

Sunday, November 5
Back to Standard Time – 2:00am – “Spring forward; Fall backward”

Monday, November 6
SAND – SandStorm – After the close – Earnings release; call tomorrow
VLD – Velo3D – 5:00pm – Earnings conference call

Tuesday, November 7
SAND – SandStorm – 11:30am – Earnings conference call
GILD – Gilead – 4:30pm – Earnings conference call
QUIK – QuickLogic – 4:35pm – Radiation Hardened Electronic Technologies Conference
ENVX – Enovix – 5:00pm – Earnings conference call

Wednesday, November 8
SFTBY – SoftBank – 3:30am – Earnings conference call
AKBA – Akebia – 8:00am – Earnings conference call
CDE – Coeur Mining – After the close – Earnings release; call tomorrow
NVTA – Invitae – 4:30pm – Earnings conference call
RKLB – Rocket Lab – 5:00pm – Earnings conference call

Thursday, November 9
CDE – Coeur Mining – 11:00am – Earnings conference call
Short Interest – After the close
INO – Inovio – 4:30pm – Earnings conference call
APTO – Aptose Therapeutics – 5:00pm – Earnings conference call

Big Tech: The 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 – $177.57) reported after the close today. September quarter revenues dipped 0.7% from last year to $89.49 billion, in line with the $89.34 billion consensus estimate. Earnings per share grew 13% to $1.46, beating the $1.39 estimate. (Conference call TRANSCRIPT HERE.)

iPhone sales rose 2.7% from last year to a September quarter record of $43.8 billion versus the $44.00 billion estimate. Mac sales were $7.61 billion, well short of the $8.50 billion estimate. iPad sales of $6.4 billion were just above the $6.14 billion estimate. Wearables, Home, and Accessories came in at $9.32 billion compared to the $9.40 billion estimate. The important Services group booked an all-time high $23.31 in sales, up 16.3% year-over-year and above the $21.42 billion estimate.

They guided for December quarter revenue flat with last year’s $117.2 billion.

On Monday, Apple introduced their “scary fast” M3 family of processors powering a new iMac and the MacBook Pro 14” and 16”. The new M3, M3 Pro and M3 Max processors use 3-nanometer technology and include GPU upgrades. The M3 Max has a 16-core CPU, a 40-core GPU, and comes with 128GB memory. Ray tracing, traditionally reserved for high-end GPUs, is available as part of the new M3 chips and is now available on the Mac.

The new 14-inch MacBook Pro with the M3 chip is 60% faster than the 13-inch MacBook Pro with the M1. It starts at $1,499.

The 16-inch MacBook Pro with either the M3 Pro or M3 Max chip is 40% faster than the 14-inch MacBook Pro with the M1. It starts at $2,499. Both new MacBook Pro laptops have 22 hours of battery life, a 1080p camera, and a six-speaker sound system.

The updated iMac desktop with the M3 processor and a 4.6K Retina display is twice as fast as the M1-equipped predecessor. It starts at $1,299 for the eight-core version or $1,499 for the 10-core processor.

Wedbush said the negative groupthink on Apple is way overdone. They wrote: “The overall sentiment of Apple on the Street is a negative ‘groupthink mentality.’ That’s very disconnected from the current iPhone 15 growth we see in the field based on our recent checks and trip to Asia that gives us a high level of confidence in owning Apple at these levels.”

Wedbush believes over 100 million iPhones in China alone are “in the window of an upgrade opportunity and that remains the golden goose on this cycle for Apple with a very heavy mix of iPhone Pro this time.” They maintained their Outperform rating on the stock with a $240 price target. AAPL is a Buy under $150 for new iPhone rollouts and augmented/virtual reality products.

Gilead Sciences (GILD – $81.23) reports next Tuesday after the close. The consensus is expecting $6.42 billion in revenues and $1.81 per share. For the December period, they expect guidance for $6.72 billion in sales and $1.89.

Gilead’s Kite subsidiary is collaborating with Epic Bio to use Epic’s proprietary gene regulation platform to develop next-generation cancer cell therapies. GILD is a Long-Term Buy under $80 for a first target of $120.

Meta Platforms (META – $310.87) has developed a strong competitive advantage due to its scale and network effects. They have numerous growth avenues including Average Revenue Per User growth outside North America, WhatsApp monetization, AI, and the metaverse. The stock still trades at a cheap valuation relative to the S&P 500 considering their above-market growth potential.

As for timing, a partial position here as it heads for the upper Bollinger Band with subsequent buys on pullbacks to the lower Bollinger Band makes sense.

Click for larger graphic

META is a Buy under $150 for a $400 target in 2024.

SoftBank (SFTBY – $21.07) reports next Thursday with a conference call at 3:30am EST. I’ll be looking at recent Vision Fund results and what they are going to do with the ARMplc IPO proceeds. SFTBY is a Buy under $25 for a first target of $50 in the next two years.

Small Tech

Enovix (ENVX – $10.23) closed the Routejade acquisition, giving them vertical integration of electrode coating and battery pack manufacturing, while adding an established lithium-ion battery business with two factories in Korea, along with complementary products, customers, and suppliers. With coating now vertically integrated, Enovix can realize significant cost savings while speeding up battery development cycles as modern materials are quickly incorporated to improve energy density. Securing the coating supply chain also ensures that incoming battery materials are the highest quality available, which positively impacts manufacturing yield and throughput, reducing costs.

They also report next Tuesday after the close. Wall Street wants to see just $120,000 in revenues and a loss of 23¢ per share, with December period guidance for $530,000 in sales and a 24¢ loss. With the change in strategy they can’t make the December revenue number. The most important information will be an update on Fab2 in Malaysia. ENVX is a Buy up to $20 for a 4-year hold to $100+ as their BrakeFlow lithium-ion battery takes market share.
Primary Risk: A new competitor invents a better battery.

Fastly (FSLY – $16.47) reported September quarter revenues up 17.8% from last year to $127.8 million, just above the consensus expectation for $126.9 million. The pro forma loss of six cents a share was smaller than the eight-cent loss Wall Street expected.

On the conference call (SLIDES HERE and TRANSCRIPT HERE), management said their Dollar-Based Net Expansion Rate – the amount of money a customer spent this year compared to last year – was 120%. They had 3,102 customers in the third quarter, up 30 from the second quarter. 547 were enterprise customers and the average enterprise customer spend was $858,000, up 5% quarter-over-quarter.

They guided the December quarter to total revenue between $137 million and $141 million compared to the consensus of $140.21 million. The pro forma loss should be one cent to five cents, better than the four-cent loss consensus. For the full year, they now see total revenue of $505 million to $509 million versus the consensus of $506.63 million, with a pro forma loss of 19¢ to 23¢ per share. The consensus was expecting a 24¢ loss.

The stock was up 15.6% today on these results. They finished the quarter with $4428.3 million in cash. FSLY is a Buy up to $20 for a 2- to 5-year hold to $80+ as Compute@Edge drives customer acquisition and revenue growth.
Primary Risk:Content and applications delivery networks are a competitive area.

Rocket Lab USA (RKLB – $4.59) reports next Wednesday after the close. Due to the one launch failure, the consensus is expecting $68.91 million in revenues and a loss of nine cents a share. For the December quarter, they think RKLB will guide for $85.22 million in sales and another nine-cent loss. RKLB is a Buy up to $13 for my $30+ target as low earth orbit satellites and space exploration grow.
Primary Risk: A new competitor emerges.

Velo3D (VLD – $1.31) reports Monday after the close. The two publishing analysts are looking for $27.00 million in revenues and an eight-cent per share loss. For the December period, they want to see guidance for $29.69 million in sales and a six-cent loss.

The company appointed Schoeller-Bleckmann Oilfield Technology, a manufacturer of high-tech metal components with more than 100 years in business, as its sole contract manufacturing partner operating in the DACH region, which includes Germany, Austria, and Switzerland. Schoeller-Bleckmann will also be Velo3D’s sole contract manufacturing partner for Europe’s oil and gas industry, which is the primary industry it serves. They will add another Sapphire printer to their two existing printers, including a Sapphire XC.

Italian contract manufacturer Ci-Esse Srl bought a Sapphire printer to enhance its additive manufacturing capabilities, providing mission-critical metal parts to its aerospace, defense, and motorsports customers. 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.

Biotech MegaShift: 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 speculative biotechs might be a good way to start. 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 good 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.

Akebia Therapeutics (AKBA- $0.88) reports next Wednesday before the open. Although the vadadustat approval in March is the big stock driver, Auryxia sales are still important. Consensus expectations are for $48.18 million in revenues and an eight-cent loss per share. For the December quarter, guidance is expected to be for $52.41 million in sales and a six-cent loss. Buy AKBA up to $2 for the vadadustat launches in the EU, UK, and (after FDA approval in March 2024) the US.
Primary Risk: Vadadustat not approved in the US.
   Clinical stage of lead product: Vadadustat PDUFA is March 27.
   Probable time of next FDA approval: March 27, 2024
   Probable time of next financing: Late 2024 or never

Aptose Biosciences (APTO – $2.93) presented surprisingly good interim results from the tuspetinib/venetoclax doublet trial in acute myeloid leukemia (AML) (WEBINAR HERE and SLIDES HERE).

Chief Medical Officer Rafael Bejar, MD, PhD, said: “We are really pleased by our growing safety and efficacy data on tuspetinib in very difficult-to-treat AML patient populations. This includes activity in FLT3-unmutated patients, a population that accounts for more than 70% of AML and has few effective treatment options. Additionally, tuspetinib’s significant activity in patients who have failed venetoclax treatment – a rapidly-emerging population of particularly high unmet medical need – provides a clear development pathway for tuspetinib with the potential for accelerated approval.”

Aptose anticipated dosing up to 30 patients with tuspetinib/venetoclax by the European School of Hematology 2023 Conference, but investigator enthusiasm resulted in dosing 49 patients as of October 23, and patients continue being enrolled.

91 other patients have received tuspetinib as a single agent with an excellent safety profile. It delivered a 42% Complete Remission (CR) rate across all patients and a 60% Complete Remission with Incomplete Hematologic Recovery (CRh) response rate across FLT3-mutated patients, among evaluable VEN-naïve patients at the 80mg daily recommended Phase 2 dose.

Tuspetinib demonstrated a 29% CR/CRh rate in VEN-naïve FLT3 unmutated (wild type) AML at 80 mg daily, unlocking the potential for tuspetinib to treat the additional 70% to 75% of the AML population without FLT3-mutation not currently addressed by any approved drugs.

Click for larger graphic

Upcoming news to drive the stock:
* * They report next Thursday after the close and will go over this data again, maybe with an update on the patient count.
* * Next tuspetinib/venetoclax data readout (November data cutoff) at American Society of Hematology December 9-12 (This is a big one – lots of partner/merger deals after ASH)
* * Phase 2 trial extension into Higher-Risk Myelodysplastic Syndrome (HR-MDS) and Chronic myelomonocytic leukemia (CMML) by yearend
* * Tuspetinib/venetoclax data on duration of response in R/R AML in March and June quarters

APTO is a Buy under $2.50 for a $300 target in a buyout.
Primary Risk: Either drug fails in clinical trials.
   Clinical stage of lead product: Phase 2
   Probable time of first FDA approval: 2025
   Probable time of next financing: Late 2025

Arch Therapeutics (ARTH – $0.96) said AC-5 will be featured at the 2023 Symposium on Advanced Wound Care Fall Meeting. This Saturday, November 4, they’ll present a clinical case poster on treating three large recalcitrant 20-year-old venous leg ulcers.

Then, on Sunday, AC5 will be featured in the Advanced Wound Care Therapy for the Lower Extremity: Hands-On Skills Lab. In this demonstration workshop, attending clinicians will be provided both hands-on experience with AC5 and an opportunity to learn about its mechanism, preparation, application, and utility in various wound types. ARTH is a Hold for a buyout.
Primary Risk: AC5 fails to sell or the internal trial fails.
   Clinical stage of lead product: External approved. Internal trial 2024
   Probable time of first FDA approval: External done. Internal 2025
   Probable time of next financing: December 2023 quarter

Compass Pathways (CMPS – $5.95) reported a September quarter loss of 67¢, much worse than the 46¢ loss expected. On the conference call (AUDIO HERE and SLIDES HERE), management said it’s expensive to start-up Phase 3 trials as new clinical sites are chosen and trained.

The company is preparing for scale at launch:

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And they are more than COMP360 for treatment-resistant depression.

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We’ll get data from the Phase 2 PTSD trial before the end of this year, Phase 3 trial 1 next summer, and Phase 3 trial 2 in mid-2025. Their US patents expire in 2038, and they will apply for five years of patent term extension.

They finished the quarter with $238.0 million in cash, enough to carry them to late 2025, and will only burn $9 million to $15 million in the December quarter. They adjusted their full year cash burn guidance lower to $79 million to $85 million. 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: 2025
   Probable time of next financing: Late 2025

Inovio (INO – $0.39) reports next Thursday after the close (busy day!). The consensus thinks they’ll do $120,000 in revenues and lose 13¢ per share. For the December period, they expect guidance for $140,000 in sales and another 13¢ loss. As always, it will be updates to their various trials that move the stock. 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: 2024
   Probable time of next financing: 2025

Invitae (NVTA – $0.63) reports next Wednesday after the close. Wall Street expects $120.76 million in revenues and a 31¢ loss per share. For December, they expect guidance for $126.85 million in sales and another 31¢ loss. I expect the cash burn to be less than Wall Street expects, which is the key to a recovery in the stock. 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

Medicenna (MDNA – $0.16) did the right thing, told Nasdaq to shove it, and delisted to the pink sheets and their Toronto Stock Exchange listing. The symbol stays the same for now. The CEO said: “Our Board of Directors concluded that within the context of the current biotech markets, the Company and its stockholders do not benefit from a Nasdaq listing considering the associated significant costs and resources required. We remain in good standing with our TSX listing, have no debt and have sufficient cash to potentially fund the company well beyond key value inflection milestones from the MDNA11 Phase 2 monotherapy and combination trial. We look forward to sharing additional new data at major conferences next month for the MDNA11, BiSKITs and bizaxofusp programs.”

The stock took a hit, but the way forward is continued successful clinical trials. The stock will go up then whether it’s on Nasdaq or not.Buy MDNA under $3 for a first target of $20, then maybe $40.
Primary Risk: Their drugs fail in the clinic.
   Clinical stage of lead product: Entering Phase 3
   Probable time of first FDA approval: 2024
   Probable time of next financing: March 2024

TG Therapeutics (TGTX – $10.41) reported a strong September quarter with $25.1 million in Briumvi sales and the $140 million license revenue from Neuraxpharm combining to produce $165.82 million in revenues compared to the – oops – $63.34 million estimate. GAAP earnings per share of 73¢ clobbered the 17c estimate.

On the conference call (AUDIO HERE), management said they have had about 2,200 Briumvi prescriptions since the launch from over 500 healthcare providers across approximately 350 centers in the US. Payer coverage is in place for approximately 95% of covered lives.

I expect more than $30 million in Briumvi sales in the current quarter. Buy TGTX under $12 for a target price in a buyout of $30 or more.
Primary Risk:Briumvi, the MS drug, fails to sell.
   Clinical stage of lead product: Approved
   Probable time of next FDA approval: NM
   Probable time of next financing: Never

Inflation MegaShift

Commodities

Hard assets are at their lowest relative price since 1925. Unless you think we are about to slip into deflation – possible, but not very likely – you need to own some of these.

Click for larger graphic h/t @WinfieldSmart

Gold ($1,993.30) got over $2,000 for the first time since July. Although it couldn’t stay there, the retreat has been small and slow – a good sign that a big upturn is imminent. The central bank gold-buying binge is even bigger than we previously thought.

Click for larger graphic h/t @WinfieldSmart

Very few advisor-guided accounts hold gold, and those that do hold a minimal amount of it. This makes me think: 1) Advisors are missing out diversifying to an asset that can substantially benefit their standard 60/40 portfolios; and, 2) It’s possible we see a heck of a bid if even some of them realize that fact.

Click for larger graphic h/t @BobEUnlimited

The fractal dimension shows the obvious consolidation you can see on the chart. Consolidations that last this long lead to BIG moves.

Miners & Related

Coeur Mining (CDE – $2.41) reports next Wednesday after the close, with a conference call Thursday morning. The consensus is looking for $257.4 million in revenues and a penny loss per share, with December quarter guidance for $254.5 million in sales and a one-cent profit. CDE is a Buy under $5 for a $20 target as gold goes higher.
Primary Risk: Prices of precious metals fall due to US dollar strength.

First Majestic (AG – $4.45) reported a poor quarter, with revenues down 9.2$ from last year to $133.2 million (consensus $134.0 million) and a pro forma loss of four cents a share instead of the two-cent profit Wall Street expected. As I previously reported, they produced 6.3 million silver equivalent ounces, consisting of 2.5 million silver ounces and 46,720 gold ounces, comparable to the June quarter. They realized an average price of $22.41 per ounce during the quarter, a 14% increase compared to the third quarter of 2022. The earnings disappointment was due to the temporary suspension of operations at Jerritt Canyon in Nevada, slightly lower production at its San Dimas and La Encantada mines in Mexico, and higher costs.

The stock slumped to a seven-and-a-half year low after they cut the dividend. But First Majestic still is a leveraged way to play the higher precious metals prices ahead, so 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.

Sandstorm Gold (SAND – $4.56) reports Monday after the close, with a conference call Tuesday morning. Analysts want to see $41.4 million in revenues and two cents per share. For the December period, they expect guidance for another two cents a share. SAND is a Buy under $10 for a $25 target.
Primary Risk: Prices of precious metals fall due to US dollar strength.

Sprott Inc. (SII – $29.94) reported September quarter revenues down 2.1% from last year to $30.1 million, a big miss from the $36.8 million consensus expectation. They earned 27¢ a share. Assets under management increased 8% from the end of 2022 and 1% from the end of June to $25.4 billion.

On the conference call (SLIDES HERE and TRANSCRIPT HERE), management pointed to their “energy transition” assets now accounting for about 25% of assets under management.

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They are the world leader in uranium investing, which is going to be HUGE over the next 12 months.

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Sprott is continuing to grow in a challenging investment environment. Assets under management, net income and adjusted base earnings before interest, taxes, depreciation & amortization (EBITDA) all were up in the September quarter. Their energy transition franchise is rapidly building scale. The clean-up of non-core businesses is largely complete with the divestitures of their Canadian broker-dealer in the June quarter and their Korean operations in the September quarter.

Management said they are seeing strong performance in key strategies early in the current quarter. I think the long-term trends support their positioning in precious metals and energy transition investments. Buy SII under $40 for a $70 target price.
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 – $34,910.52) is holding up well. I think there is a sharp upmove ahead of us as spot bitcoin exchange-traded funds are approved by the SEC, and we probably will take advantage of that pop to exit. I’d like to hold on until the early 2024 halving, but much of the support for bitcoin comes from tether, which appears to be an out-and-out fraud.

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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.

Grayscale Bitcoin Trust (GBTC- $27.17) is the best way to play SEC approval of exchange-traded funds. GBTC is a Buy under net asset value.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.

Oil – $82.48

Wednesday morning, oil perfectly erased all of the war-premium from Israel, even though that war is ongoing and may be expanding. But the Biden Administration told Reuters that they are contemplating releasing up to 180 million barrels of oil from the Strategic Petroleum Reserve, perhaps a million barrels a day over several months, in a bid to lower fuel prices and curb inflation.

If the White House follows through with this plan, it would be the largest release from the Strategic Petroleum Reserve in its nearly 50-year history and mark the third time in the past six months that the government has tapped into its emergency supplies. 180 million barrels of oil is equivalent to approximately two days of global demand. It’s a terrible, even dangerous, idea and Chairman Xi must be laughing.

The Energy Administration Administration revised up (quite a lot) its estimate for American road fuel demand in August, based on monthly data versus the previously-used weekly data. It now pegs gasoline consumption at 9.30 million barrels a day, up from 9.06 million barrels a day. They did the same for diesel, 4.13 million barrels a day versus 3.76 million barrels a day.

At the same time. US commercial crude storage isn’t building the way it should during refinery maintenance season. I think US commercial crude storage could fall to ~405 million barrels by yearend.

Click for larger graphic h/t @HFI_Research

Global oil demand rebounded in August to record seasonal highs The month-over-month increase was driven by China, Indonesia, the US, and Saudi Arabia.

Click for larger graphic h/t @JODI_Data

For the oil market today, we’ve come to a stalemate. With the Saudi/Russian voluntary production cut, crude is being squeezed higher, while product prices have come under pressure. This has resulted in downward pressure on refining margins. With the refinery maintenance season coming to an end and margins failing to gain any reactions despite a $10+ drop in crude, we are going to see some refinery run cuts into year-end.

The July 2026 Crude Oil Futures (CLN26.NYM – $69.71) are a Buy under $70 for a $200+ target. Only buy futures for all cash; do not use margin.

The United States 12 Month Oil Fund, LP (USL – $38.96) is a Buy under $40 for a $100+ target.

Energy Fuels (UUUU – $8.16) got a nice write-up on Seeking Alpha: Energy Fuels: Not Far From Becoming A Force To Be Reckoned With.

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According to Zerohedge, several hedge fund managers are expanding their allocations to uranium stocks, with a conviction that an increasing embrace of nuclear energy as part of a “green” future – along with geopolitically-rooted ambitions to reduce dependence on Russian oil and gas – means the trend has a lot of room to run. The International Energy Agency says that, in order to meet “net zero” goals, global nuclear generation capacity must double from 2020 levels by 2050. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.

International & Other Recommendations
It is important to hold some non-US assets, especially in China. Chinese stocks just saw net selling by foreign investors for a third consecutive month, the longest in history.

Click for larger graphic h/t @WinfieldSmart

As always, if the consensus zigs, you should zag. EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $28.72) is a Buy under $38 for a $66 target in 12 to 18 months.

KraneShares Bosera MSCI China A Share Fund (KBA – $21.57) is a Buy under $40 for a three- to five-year hold.

Morgan Stanley China A-Share Closed-End Fund (CAF – $11.92) is a Buy under $18 for a three- to five-year hold.

KraneShares CSI China Internet Exchange-Traded Fund (KWEB – $26.28) is a Buy under $40 for a double over the next three years.
Primary Risk of all four of these: China falls into a recession.

Acreage Holdings (ACRDF – $0.36) introduced its Superflux craft cannabis brand in New Jersey. To show you how nutty this business is getting, it includes four limited-edition, small-batch flower strains crafted with bespoke genetics, including:

Cherry Lemon Gusher – A hybrid strain bred and selected to bring together a special cherry-scented Lemon Cherry Gelato, Lemonade Gushers, and Purple Zkittlez, delivering a soft, floral, citrus-berry aroma, and harmonious blending of sweet, floral, and red fruit flavors, like a raspberry mimosa.
Chocolate Cherry OG – A rich, indica-dominant strain, melding some of the most sought-after OG Kush plants with both Black Cherry and Lemon Cherry Gelato, offering a chocolatey rich, grainy sweetness with a creamy gas aroma and hints of fruit.
Red Carpet Runtz – A unique-scented and potent varietal, this indica-dominant strain blends Gelato, Cookies, Afghani, and a sprinkle of OG, giving a savory herbal top note with an underlying sweet gas aroma.
Silly Rabbit – Unleashing a complex sweet-meets-gas aroma with distinct notes of sweet cereal milk and light fruity qualities, this indica-dominant strain blends the “Guava” cut of Stardawg, Gelato, Zkittles, and Wedding Cake for some serious genetic pedigree.

ACRDF is a buy under $2 for a hold for the Canopy Growth merger and beyond.
Primary Risk: Canopy Growth does not acquire the company.

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Click for larger graphic

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Your thinking the Russia/Ukraine war is about over Editor,

Michael Murphy CFA
Founding Editor
New World Investor

All Recommendations

Priced 11/2/23. 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.

Tech Dominators
  Apple Computer (AAPL – $177.57) – Buy under $150 for new iPhones
  Corning (GLW – $27.38) – Buy under $33, target price $60
  Gilead Sciences (GILD – $81.23) – Buy under $80, target price $120
  Meta (META – $310.87) – Buy under $150, target price $400
  SoftBank (SFTBY – $21.07) – Buy under $25, target price $50

Small Tech
  Enovix (ENVX – $10.23) – Buy under $20; 4-year hold to $100+
  First Trust NASDAQ Cybersecurity ETF (CIBR – $45.04) – Buy under $40; 3- to 5-year hold
  Fastly (FSLY – $16.47) – Buy under $20; 2- to 5-year hold to $80+
  PagerDuty (PD – $20.47) – Buy under $30; 2- to 5-year hold
  QuickLogic (QUIK – $9.25) – Buy under $10, target price $40
  Rocket Lab (RKLB – $4.59) – Buy under $13, target price $30+
  Velo3D (VLD – $1.31) – Buy under $6, target price $50

$20-for-$1
  Akebia Biotherapeutics (AKBA – $0.88) – Buy under $2, target $20
  Aptose Biosciences (APTO – $2.93) – Buy under $10, ultimate target $300
  Compass Pathways (CMPS – $5.95) – Buy under $20, hold a long time for a 10x return
  Inovio (INO – $0.39) – Buy under $7, hold a long time
  Invitae (NVTA – $0.63) – Buy under $10, first target $50, then $100+
  Medicenna (MDNA – $0.16) – Buy under $3, first target $20, then maybe $40
  ScyNexis (SCYX – $1.80 – Buy under $3, target price $20, then $50
  TG Therapeutics (TGTX – $10.41) – Buy under $12 for buyout at $30+

Inflation
  A Short-Sale or REO House – ($415,400) – Hold
  Bag of Junk Silver – ($22.86) – hold through silver bull market
  Sprott Gold Miners ETF (SGDM – $23.52) – Buy under $28, target price $50
  Sprott Junior Gold Miners ETF (SGDJ – $27.02) – Buy under $39, target price $100
  Sprott Physical Gold and Silver Trust (CEF – $18.52) – Buy under $18, target price $30
  Global X Silver Miners ETF (SIL – $23.94) – Buy under $30, target price $50
  Coeur Mining (CDE – $2.41) – Buy under $5, target price $20
  First Majestic Mining (AG – $4.45) – Buy under $11, next target price $23
  Paramount Gold Nevada (PZG – $0.30) – Buy under $1, first target price $10
  Sandstorm Gold (SAND – $4.56) – Buy under $10, target price $25
  Sprott Inc. (SII – $29.94) – Buy under $40, target price $70

Cryptocurrencies
  Bitcoin (BTC-USD – $34.910.52) – Buy
  Grayscale Bitcoin Trust (GBTC – $27.17) – Buy
  Ethereum (ETH-USD – $1,794.76) – Buy
  Grayscale Ethereum Trust (ETHE – $14.00) – Buy

Commodities
  Crude Oil Futures – July 2026 (CLN26.NYM – $69.71) – Buy under $70; $200+ target
  United States 12 Month Oil Fund, LP (USL – $38.96) – Buy under $40; $100+ target
  EQT (EQT – $44.35) – Buy under $35; $70 first target
  Energy Fuels (UUUU – $8.13) – Buy under $8; $30 target
  Freeport McMoRan (FCX – $35.01) – Buy under $44; $65 target within two years

International & Other Recommendations
  EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $28.72) – Buy under $38 for a $66 target in 12 to 18 months
  KraneShares Bosera MSCI China A Share Fund (KBA – $21.57) – Buy under $40 for a three- to five-year hold
  Morgan Stanley China A-Shares Fund (CAF – $11.92) – Buy under $18 for a three- to five-year hold
  KraneShares CSI China Internet ETF (KWEB – $26.28) – Buy under $40 for a double over the next three years
  Acreage Holdings (ACRDF – $0.36) – Buy under $2 for the Canopy Growth merger
  Mongolia Growth Group (MNGGF – $1.01) – Buy under $1.30; long-term hold

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.

  Arch Therapeutics (ARTH – $0.96) – Hold for buyout

Publisher: GwynRose LLC, 5348 Vegas Drive, Suite 868, Las Vegas, NV 89108

New World Investor does not act as a personal investment adviser or advocate the purchase or sale of any security or investment for any specific individual. The recommendations and analysis presented to members are for the exclusive use of members. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time. Nothing in this presentation should be considered personalized investment advice. No communication to you by Michael Murphy or any of our employees or contractors should be deemed as personalized investment advice.

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