Dear New World Investor:

This is the fifth week of the BofA Bull & Bear Indicator giving a contrarian “Buy’” signal (left graphic). Note the median 1% to 3% gains from 20 buy signals in the past 20 years (right graphic). That targets 4550 for the S&P 500 – we are there.

Click for larger graphic

But Goldman Sachs wrote: “Over the last 10 days – Commodity Trading Advisers have bought nearly $70 billion of US equities… this is the largest 10-day buying we have on record. Our data goes back to 2016.” Goldman says hedge funds are record long already. Tech stocks compared to the S&P are above two standard deviations. The seven largest companies are 29% of the S&P. The average Price/Earnings ratio of the “Magnificent 7” is 53x, and Dr. Copper is in deep contango. We are nearing an interim top, although I still expect the usual December rally.

The pros are loading up on the high-fliers in size. We’ll see how this plays out, but this is not what we see at market lows.

Click for larger graphic h/t The Market Ear

However, also according to Goldman Sachs, hedge funds are selling: “Overall US equities saw the largest net selling in 8 weeks.” Are they selling to the CTAs?

Click for larger graphic h/t @dailychartbook

So the institutional picture is mixed. As is retail – the American Association of Individual Investors survey shows more bulls, but they’re still not over 50%.

Click for larger graphic

And CNN’s Fear & Greed Index is deep in Greed territory.

Click for larger graphic

Market Outlook

The S&P 500 added 1.1% since last Thursday after posting its best three weeks since June 2020. Going back to 1962, there have been 39 other times that the S&P 500 delivered three-week percentage changes of 9% or more, excluding this most recent run. Following those past three-week surges, the index was still up on average over one-, two-, three-, four- and eight-week periods. In fact, the gains seem to rise as time goes on; the index averages a 1.83% gain one month out, and a 3.91% gain after two months.

Nor is that thanks to a few outliers. Looking on a median basis is similarly cheery, as the index is similarly in the black over the one- two-, three-, four- and eight-week periods. The median gain four weeks out is 2.21%, and jumps to 3.3% at eight weeks. Although the last three times the S&P jumped more than 9% in three weeks — twice in April 2020 and again in June 2020, during the Covid recovery — the index was in the red one week and one month out for the first and last of those periods, it was higher eight weeks later in all three of those instances.

The Index is up 18.7% year-to-date. Deutsche Bank said that we are seeing an unwinding of the impact of rates volatility and geopolitical risk, rather than a broad pricing in of any upside to economic growth. I think that’s right, which means when 2024 GDP growth disappoints the consensus – as it will – there’s no reason to crash the market from here. And as my friend Keith Fitz-Gerald said: “Investors may think they’re playing it smart by going to the sidelines in an attempt to avoid a potential downturn—and I get why they would feel that way—but missing opportunity is the more expensive proposition.”

The Nasdaq Composite gained 1.1% and just posted its best three weeks ever. It is up 36.3% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) climbed 3.8% as the biotech bear market ended. But it still is down 12.3% year-to-date. The small-cap Russell 2000 booked a 1.2% gain and is up a measly 1.9% in 2023.

The fractal dimension got all the way down to just above the 55 level that would signal this move up has legs. Seasonally, as yearend pension fund contributions roll in, that’s what usually happens.

Top 5

Changes this week: None, although I’m tempted to add MDNAF and SCYX Near-Term. Both are stupid cheap. I’m going to write about SCYX in Biotech Moonshots.

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
SFTBY SoftBank – for ARM IPO valuation
AKBA Akebia – Vadadustat approval March 27, 2024; TDAPA approval October
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

Economy

The Atlanta Fed’s GDPNow model estimate of December quarter real GDP was updated this morning to +2.1%. The Blue Chip economists are expecting less than +1.0%. It’s a meh quarter either way.

Click for larger graphic

The Economic Cycles Research Institute weekly leading index is losing ground at a rapid clip. A mild, two- or three-quarter recession is coming to start 2024. Not a “Big stawm a-comin’!” Nor’easter, but enough to maybe put some of my recommendations back under the buy limits (or give me a timely window to raise the limits).

Click for larger graphic h/t @businesscycle

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

Thursday, November 23

via GIPHY

Friday, November 24
AG – First Majestic – Through 11/26 – Deutsche Goldmesse. Frankfurt
Market Closes Early – 1:00pm

Tuesday, November 28
AG – First Majestic – Through 11/29 – Scotiabank Mining Conference, Toronto
CDE – Coeur Mining – Unspec. – Bank of America Leveraged Finance Conference
ACRDF – Acreage Holdings – Through 12/1 – MJBizCon, Las Vegas
GLW – Corning – 10:15eam – UBS Global Technology Conference
AKBA – Akebia – 10:30am – Piper Sandler Healthcare Conference
GILD – Gilead Sciences – 1:20pm – Evercore ISI HealthCONx Conference

Wednesday, November 29
CDE – Coeur Mining – Unspec. – Scotiabank Mining Conference, Toronto
AG – First Majestic – Through 11/30 – Swiss Mining Institute, Zurich
September quarter GDP – 8:30am – Second estimate
GILD – Gilead Sciences – 9:00am – Piper Sandler Healthcare Conference
FSLY – Fastly – 12:55pm – UBS Global Technology Conference

Thursday, November 30
Personal Consumption Expenditures Index – 8:30am
PD – PagerDuty – 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

SoftBank (SFTBY – $21.00) got a credit market upgrade by Moody’s from negative to stable. Moody’s cited lower leverage, improved asset quality, and increased transparency in its investment portfolio following the successful initial public offering of ARM Holdings (ARM). Moody’s noted that SoftBank substantially halted new investments over the past 18 months, while reducing its debt and increasing liquidity.

As I’ve been saying, the ARM IPO is the gift that keeps on giving. SFTBY is a Buy under $25 for a first target of $50 in the next two years.

Small Tech

Enovix (ENVX – $10.95) was named a CES 2024 Innovation Awards Honoree for its BrakeFlow safety technology. The announcement of award winners was made ahead of the Consumer Electronics Show, CES 2024 in Las Vegas. It is the world’s most powerful technology event. The Innovation Awards are chosen by elite panel of industry expert judges from over 3,000 submissions. 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.

PagerDuty (PD – $21.31) reports earnings after the close next Thursday. The consensus is expecting $107.34 million in revenue with earnings of 14¢ per share. December quarter guidance should be for $110.29 million and 13¢. PD is a Buy up to $30 for a 2- to 5-year hold as their digital operations management Software-As-A-Service gains market share.
Primary Risk: Digital operations management is a competitive area.

Rocket Lab USA (RKLB – $4.26) is opening a Space Structures Complex in the 113,000 ft² former Lockheed Martin Vertical Launch Building in Middle River, Maryland. It will supply advanced composite products for its own use and as yet another vital component for Space Systems to sell to the space industry. They will offer everything from design and engineering to tooling and molds, manufacturing, assembly, and testing for space applications.

The complex will develop and manufacture carbon composite spacecraft buses, structural panels and assemblies, satellite dispensers, aerostructures and heat shields, composite overwrap pressure vessels, solar panel substrates, launch vehicle structures, and more. The complex also will support Neutron launch vehicle development and supply.

To assist with project costs, in addition to significant support from Baltimore County, the Maryland Department of Commerce is providing a $1.56 million loan through the Advantage Maryland program. Rocket Lab is also eligible for various other incentives and tax credits, including the Partnership for Workforce Quality program, the More Jobs for Marylanders program, and the state’s Job Creation Tax Credit.

Electron was the world’s first carbon composite orbital launch vehicle. 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.

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.

Arch Therapeutics (ARTH – $8.40) has been on a rocket ride. Don’t mistake this for anything real – I’ve seen moves like this before. Sometimes the stock price is just being manipulated to achieve an objective, like uplisting to Nasdaq without having to do another reverse split. If the price stays over $4, that could happen. 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

Last Saturday, at the Society for Neuro-Oncology annual meeting,Medicenna (MDNAF – $0.31) reported amazing four-year follow-up survival data from the Phase 2b bizaxofusp (MDNA55) trial in patients with recurrent glioblastoma, a uniformly fatal form of brain cancer.

A single treatment of bizaxofusp doubled survival from 7.2 months to 14.5 months. Survival for bizaxofusp-treated patients increased 370% at Year 1 and more than 50% at Year 2. This may finally get them a Phase 3 partner. Bizaxofusp has been granted Fast Track status by the FDA and Orphan Drug status by both the the FDA and EMA. Buy MDNAF 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

Inflation MegaShift

Gold ($1,991.50) is doing a good job of staying closer to $2,000 than the $1,950 tractor beam. A decisive break over $2,000 should set up a move to all-time highs. The fractal dimension turned down in what could develop into a real uptrend, if it can fall through 55.

Miners & Related

Coeur Mining (CDE – $2.67) bought mining concessions adjacent to their Palmarejo gold-silver complex in Mexico for $25 million plus a future royalty on certain ounces discovered on the purchased concessions. The concessions total nearly 7,000 acres and include claims adjacent to two primary zones within Palmarejo’s existing footprint as shown in yellow on the map below.

The first set of concessions cover the southeast extensions of the Independencia and Nacion deposits where mining currently takes place. The second set of concessions, located to the northeast, surrounds multiple targets containing mineralization and historic resources that were added through the 2015 acquisition of Paramount Gold and Silver. Intensive field work, including mapping and sampling across the entire Eastern land package, was ramped up over the past 12 months and the company says “has shown very encouraging results.” 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.

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 – $37,334.90) held strong as Binance founder and CEO Changpeng “CZ” Zhao resigned and plead guilty to criminal money laundering. Binance will pay a huge $4.3 billion in fines. Next: Justin Sun of TRON, then Tether, and then the way is cleared for Larry Fink’s and other’s spot bitcoin exchange-traded funds.

Click for larger graphic h/t Bullion By Post

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- $30.45) is a Buy under net asset value.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.

Commodities

Oil – $76.82

Morgan Stanley summarized the widely varying non-OPEC production estimate changes from 2023-2027.

Click for larger graphic h/t @HFI_Research

More from @HFI_Research: “To those of you doubting the oil supercycle, please remember that there were ~260 million bbls of SPR released in 2022 to combat elevated oil prices. If it were not for this record SPR release, oil prices would have approached closer to $140/bbl, which would have resulted in serious demand destruction.

“While oil prices have remained depressed since then, oil companies are still generating good returns allowing for shareholders to ‘wait’ while things normalize. With OPEC+ still incentivized to cut production, production growth from non-OPEC will start to wane, which will result in the imbalance to return. OPEC+ spare capacity is elevated, but this too will run out as global oil demand growth continues…just know that this is a commodity business, and supply-led imbalance will happen…One additional thing to point out is that we’ve also effectively had Iranian oil sanctions lifted since June 2022. Iran has been able to increase production to 3.4 million b/d up from 2.6 million b/d at the beginning of 2022.”

According to Bloomberg, hedge funds’ bearish oil bets put pressure on OPEC+ ahead of their next meeting. Money managers cut their bullish Brent and WTI oil bets by 18,829 combined net-long positions to 252,261, the lowest level since June 27.

Click for larger graphic h/t @C_Barraud

The July 2026 Crude Oil Futures (CLN26.NYM – $68.77) 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 – $37.25) is a Buy under $40 for a $100+ target.

Energy Fuels (UUUU – $8.43) will benefit as this week saw a monumental gap up in spot uranium. From Trading Economics: “Uranium prices in the US surged past $80 per pound for the first time since January 2008, soaring past pre-Fukushima disaster levels amid high demand and risks to supply.

“Fossil fuel volatility and decarbonization goals drove countries to extend the life of existing generators and increase investments in new plants, led by China’s pledge to build another 32 nuclear reactors by the end of the decade. The optimistic demand outlook aligned with lower nuclear fuel inventories for utilities, triggering large near-term purchasing activity. The latest data showed that European inventories fell by 21% since 2018.

“Supply of enriched uranium has turned scarce as Western generators shunned a portion of Russian nuclear fuel, compounding shipping halts due to insurance restrictions and stressing capacity limits for Western enrichers. Additionally, some miners in Niger suspended operations due to the country’s coup, while Canada’s Cameco revised production for the year sharply downwards.”

Click for larger graphic

This is starting to look like when rhodium shot through $10,000 an ounce in early 2020, where there was no technical resistance alongside no physical supply. Rhodium kept going and topped out around $30,000 an ounce one year later, up from just $600 an ounce in 2016, five years earlier. The pricing fundamentals are the same for both commodities: the utility of the material supersedes the price, so both are price inelastic.

This week could be the start of the parabola for spot uranium. There’s no supply and there’s no supply coming online to meet demand. There’s no generalist money in the trade yet – it’s coming – and there’s no reason for spot to not be at $100 by yearend. The circumstances are in place for uranium to go on a real tear here. This is the physical supply of a commodity that’s responsible for the modern daily material standard of humankind, and it’s in a hopeless supply deficit with real time price discovery. Got U308? UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.

Freeport McMoRan (FCX – $36.89) is the subject of a fraudulent mini-tender offer at $32.20. Don’t be fooled! These slimeballs make these low-ball offers because brokers are required to notify you of any such offer. They hope some will tender their stock without checking the price – it happens – and they quickly short an equivalent amount at the higher market price to lock in a profit.

Happily, any FCX shareholders who already tendered shares may withdraw their shares at any time prior to 12:01am EST time on December 13 by following the procedures described in the offer documents. FCX is a buy under $44 for a $65 target within two years.
Primary Risk: Copper prices fall.

* * * * *

The Internet is flooded with amusing but mostly quite useless GPTs. But here are seven GPTs that could be of actual value to investors.

Financial Report GPT: This model specializes in detailed financial statement analysis and providing investment insights. https://lnkd.in/d_-RVYnS

IFRS-GPT: Expert in International Financial Reporting Standards (IFRS) & Generally Accepted Accounting Principles (GAAP), providing assistance with financial statements, principles and analysis. https://lnkd.in/dMdaMBSn

Market Maven: An analyst versed in investment strategies and the philosophies of financial icons. https://lnkd.in/digcM9bG

Macro Analyst: Aids in macroeconomic research. https://lnkd.in/dEMCuCtU

Johan Widmark’s Quant_Trading_Signals: Expert in brief, actionable trade signals from charts, based on 25 years of data and quantitative and technical analysis. https://lnkd.in/dQbMuSUF

Fiscal Chuckle: Combines number crunching with humor, covering topics from budgeting to AI breakthroughs in finance. https://lnkd.in/d9Ad5hyj

Equity Analyst: Offers precise stock analyses with clear price targets and recommendations. https://lnkd.in/dxZzewEM

h/t Johan Widmark

* * * * *

The Salvation Army Chicago Staff Band Thanksgiving Concert 2014

* * * * *

Your reading The Climate Change Alternative We Ignore (to Our Peril) Editor,

Michael Murphy CFA
Founding Editor
New World Investor

All Recommendations

Priced 11/22/23. 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 – $191.31) – Buy under $150 for new iPhones
  Corning (GLW – $28.15) – Buy under $33, target price $60
  Gilead Sciences (GILD – $75.70) – Buy under $80, target price $120
  Meta (META – $341.49) – Buy under $150, target price $400
  SoftBank (SFTBY – $21.00) – Buy under $25, target price $50

Small Tech
  Enovix (ENVX – $10.95) – Buy under $20; 4-year hold to $100+
  First Trust NASDAQ Cybersecurity ETF (CIBR – $48.45) – Buy under $40; 3- to 5-year hold
  Fastly (FSLY – $17.78) – Buy under $20; 2- to 5-year hold to $80+
  PagerDuty (PD – $21.31) – Buy under $30; 2- to 5-year hold
  QuickLogic (QUIK – $11.77) – Buy under $10, target price $40
  Rocket Lab (RKLB – $4.26) – Buy under $13, target price $30+
  Velo3D (VLD – $0.98) – Buy under $6, target price $50

$20-for-$1 Biotech
  Akebia Biotherapeutics (AKBA – $0.99) – Buy under $2, target $20
  Aptose Biosciences (APTO – $2.43) – Buy under $10, ultimate target $300
  Compass Pathways (CMPS – $6.05) – Buy under $20, hold a long time for a 10x return
  Inovio (INO – $0.41) – Buy under $7, hold a long time
  Invitae (NVTA – $0.54) – Buy under $10, first target $50, then $100+
  Medicenna (MDNAF – $0.31) – Buy under $3, first target $20, then maybe $40
  ScyNexis (SCYX – $1.62) – Buy under $3, target price $20, then $50
  TG Therapeutics (TGTX – $12.67) – Buy under $12 for buyout at $30+

Inflation
  A Short-Sale or REO House – ($415,400) – Hold
  Bag of Junk Silver – ($23.68) – hold through silver bull market
  Sprott Gold Miners ETF (SGDM – $23.79) – Buy under $28, target price $50
  Sprott Junior Gold Miners ETF (SGDJ – $27.89) – Buy under $39, target price $100
  Sprott Physical Gold and Silver Trust (CEF – $18.55) – Buy under $18, target price $30
  Global X Silver Miners ETF (SIL – $25.78) – Buy under $30, target price $50
  Coeur Mining (CDE – $2.67) – Buy under $5, target price $20
  First Majestic Mining (AG – $5.44) – Buy under $11, next target price $23
  Paramount Gold Nevada (PZG – $0.35) – Buy under $1, first target price $10
  Sandstorm Gold (SAND – $4.74) – Buy under $10, target price $25
  Sprott Inc. (SII – $30.88) – Buy under $40, target price $70

Cryptocurrencies
  Bitcoin (BTC-USD – $37,334.90) – Buy
  Grayscale Bitcoin Trust (GBTC – $30.45) – Buy
  Ethereum (ETH-USD – $2,080.89) – Buy
  Grayscale Ethereum Trust (ETHE – $17.16) – Buy

Commodities
  Crude Oil Futures – July 2026 (CLN26.NYM – $68.77) – Buy under $70; $200+ target
  United States 12 Month Oil Fund, LP (USL – $37.25) – Buy under $40; $100+ target
  EQT (EQT – $40.32) – Buy under $35; $70 first target
  Energy Fuels (UUUU – $8.43) – Buy under $8; $30 target
  Freeport McMoRan (FCX – $36.89) – Buy under $44; $65 target within two years

International & Other Recommendations
  EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $30.76) – Buy under $38 for a $66 target in 12 to 18 months
  KraneShares Bosera MSCI China A Share Fund (KBA – $21.75) – Buy under $40 for a three- to five-year hold
  Morgan Stanley China A-Shares Fund (CAF – $12.10) – Buy under $18 for a three- to five-year hold
  KraneShares CSI China Internet ETF (KWEB – $28.12) – Buy under $40 for a double over the next three years
  Acreage Holdings (ACRDF – $0.24) – Buy under $2 for the Canopy Growth merger
  Mongolia Growth Group (MNGGF – $1.03) – 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 – $8.40) – 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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