Dear New World Investor:
NOTICE: No newsletter next week and I’m sure you can guess why. The Santa Claus rally should start shortly and I’ll be back on January 2 with the 2024 performance results and some early thoughts on 2025.
The Fed cut the Fed funds rate a quarter percentage point Wednesday to a new range of 4.25%-4.50% with newly-appointed Cleveland Fed president Beth Hammack dissenting, both as expected. It was the third consecutive rate cut of 2024 despite signs that inflation isn’t down to 2%.
The consensus among Fed officials is for three rate cuts next year, down from four previously forecast in September. That’s still pretty high – a lot of people thought the “dot plot” would show only two or even one cut next year. Three FOMC members expect 4 cuts next year, ten estimated 3 cuts, while three saw 2 cuts, and one thinks no cuts.
Their statement was the usual word salad with an added phrase: “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
They added the phrase “extent and timing” to indicate that they may not continue the consecutive meetings of rate cuts and slow the pace. They now see inflation, as measured by their favorite core Personal Consumption Expenditures Index, ending 2025 at 2.5%, higher than the 2.2% previously envisioned. They expect the unemployment rate to tick down a tenth to 4.3% from their previous forecast of 4.4%. Real GDP growth is expected to remain roughly the same at 2.1%, up from 2.0% previously.
The markets did not like “extent and timing” or three cuts instead of four in 2025.The S&P 500 had its worst Fed Day since September 17, 2001. The 10-year Treasury yield rose nearly 11 basis points following Powell’s press conference to hover just under 4.5%, a level last seen in May. Bond investors are shunning long-term Treasuries as the Federal Reserve cuts rates in the face of a strong economy.
The Fed has a big problem. The US has been running ~$2 trillion budget deficits for two years with unemployment less than 4%. IMHO, these are the most irresponsible budget deficits in US history. Yet, Congress is about to pass an interim budget with even more spending. This has to stop before the Fed can cut – and Powell knows it. In the press conference he said: “We need to see progress on inflation, That is how we are thinking about it. It is kind of a new thing. We moved quickly to get to here but moving forward we are moving slower.”
The September dot plot (gray bars in graphic) showed the Fed cutting four times to 3.38% in 2025 (3.25% to 3.50%). December (yellow bars in graphic) shows them cutting slower. I drew an ellipse around the long-term dots; this shows the wide disagreement within the Fed about where the neutral rate is and how far it should keep cutting.
Click for larger graphic h/t Pepperstone.com
Nine trading days ago David Rosenberg, the biggest bear of all, tossed in the white flag. Since then the the venrable Dow Jones Industrial Average fell 10 days in a row through Wednesday, the longest losing streak since 1974 – 50 years. Was that the classic sign of a top? Or do we have to wait for the second-biggest bear, Peter Schiff, to give up?
I expect a strong December quarter GDP report on January 30, followed by most of the big tech companies reporting stellar December quarter results in February. That could mark the top. We shall see.
Market Outlook
The S&P 500 lost 3.0% since last Thursday due to the Fed’s “extent and timing.” The Index is up 23.0% year-to-date. The Nasdaq Composite lost 2.7% but is still up 29.1% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) was clobbered for 4.7% and now is up only 0.6% year-to-date. The small-cap Russell 2000 was hit even worse for 5.9% and is up 9.6% in 2024.
The fractal dimension says Who-Hoo! A week like this creates fast consolidation, with the 55 level now in sight. It will take a bit more time or weak prices (or both) to fully rebuild the required energy for the next big move, but we’re much closer.
Top 5
Changes this week: None
Near-Term – chronological order
SCYX – ScyNexis – Announce resolution of the manufacturing problem, lifting of clinical hold, restart of MARIO trial, maybe GSK files for hospital use approval
EQT EQT –natural gas price rebound
AKBA Akebia Therapeutics – Vafseo launch in January
USL United States 12 Month Oil Fund, LP – crude should rise quickly
FCX Freeport McMoRan – copper shortage
Long-Term – alphabetical order
ABCL AbCelllera – Will become a huge pharma royalty company
UUUU Energy Focus – Domestic uranium supplier
EQT EQT – largest US natural gas company
IBIT iShares Bitcoin Trust – Bitcoin is headed for $150,000
META Meta – a (the?) leader in the metaverse
PLTR Palantir – a (the?) leader in AI applications software
RKLB Rocket Lab – #2 to SpaceX in space
SCYX ScyNexis –First new antifungal in 20 years
Economy
The third estimate of September quarter real GDP growth this morning was an upward revision to +3.1%. That was just above the June quarter’s +3.0%. In spite of the Fed’s interest rate increases, GDP growth has now topped 2% in eight of the last nine quarters. Consumer spending, which is about two-thirds of US economic activity, was up 3.7%, the fastest since the March 2023 quarter.
The Atlanta Fed’s GDPNow model estimate for December real GDP growth ticked up another tenth of a percent to +3.2% due to better residential fixed investment growth.
Click for larger graphic
Job openings have been plunging in a pattern that previously meant we already were in a recession.
Click for larger graphic h/t St. Louis Fed
Dollar Death Watch
Crescat Capital published an excellent History of US Dollar Cycles. They wrote: “Since the 1971 end of the gold standard, the dollar’s cycles have been notably prolonged and distinct, marked by clear fluctuations between periods of strength and weakness. Today, a new set of structural pressures has brought the USD to a critical juncture. The growing challenge of managing unsustainable interest payments has created conditions that could drive a significant devaluation. The likely policy response—a combination of reduced government spending and lower interest rates—has historically weakened the dollar, especially relative to hard assets and other currencies.”
Click for larger graphic h/t @TaviCosta
A weaker dollar means higher prices for stocks, gold, commodities, and other hard assets. Buckle up.
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, December 20
Personal Consumption Expenditures Index – 8:30am – The Fed’s favorite inflation indicator
Saturday, December 21
Winter Solstice – 4:20am
Tuesday, December 24
Stock Market Closes Early – 1:00pm, but only the diehards will still be there
Short Interest – After the close
Wednesday, December 25
Markets Closed
Wednesday, January 1
HAPPY NEW YEAR TO ALL!
Thursday, January 2
Next Radar Report with 2024 performance stats
Friday, January 3
Happy 16thanniversary to bitcoin. The first bitcoin block was mined on January 3, 2009, around 6:15pm server time. It would take another six days for the second block to be mined. Bitcoin founder Satoshi Nakamoto left a message in the code for the block, commonly referred to as Block #0 or the Genesis Block. The message read, “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” That line comes from a London Times article from the same day that detailed a bailout of banks by the British government. While Nakamoto never stated the meaning of the message, many believe it is a reference to why bitcoin was started in the first place: To cut banks out of the financial process.
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‘s (AAPL – $249.79) US iPhone 16 sales are tracking below the iPhone 15 so far, according to JPMorgan. They cited a single survey from Wave7 Research about handset sales across US carriers in October and November. They noted that iPhone 15 sales were soft a year ago, so the comparison should have been easy. Moreover, the Wave7 study covered only the US, where the economy is relatively strong. International markets, which account for the majority of Apple’s revenues, are doing worse – China, Germany, France, and UK. The trouble with these single survey articles is they’re often inaccurate or biased.
Apple is rumored to be introducing satellite connectivity for Apple Watch in 2025, possibly followed by foldable iPhones. AAPL is a HOLD – I expect to move back to Buy under $175 for new iPhones.
Gilead Sciences (GILD – $91.09) coverage was restarted by BofA with a Buy rating and a $109 target price. They said GILD is “a relatively quiet stock” with “above-average durable long-term growth – at a below-average P/E multiple.” Well, yeah.
They appointed Dietmar Berger, MD, PhD, as Chief Medical Officer. He is a board-certified internist, hematologist, and oncologist with more than 25 years of experience in developing and delivering innovative medicines across a broad range of therapeutic areas.
The FDA granted Breakthrough Therapy Designation to Trodelvy for the treatment of adult patients with extensive-stage small cell lung cancer (ES-SCLC) whose disease has progressed on or after platinum-based chemotherapy. The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending seladelpar for the treatment of primary biliary cholangitis. Final European Commission approval comes in the March quarter. GILD is a Long-Term Buy under $80 for a first target of $120.
Meta Platforms (META – $595.57) launched an AI model called Meta Motivo, which can control the behavior of a human-like digital agent to perform complex tasks. They also introduced the latest Llama 3.3 AI model.
Hollywood Director James Cameron and Meta will create experiences for Quest VR headset to increase sales. Meta’s Chief Technology Officer and Head of Reality Labs, Andrew Bosworth, wrote a comprehensive overview of where the company is going: Accelerating the Future: AI, Mixed Reality and the Metaverse. He wrote: “The most important thing you can do when you’re trying to invent the future is to ship things and learn from how real people use them. They won’t always be immediate smash hits, but they’ll always teach you something. And when you land on things that really hit the mark, like mixed reality on Quest 3 or AI on glasses, that’s when you put your foot on the gas. This is what will make 2025 such a special year: With the right devices on the market, people experiencing them for the first time, and developers discovering all the opportunities ahead, it’s time to accelerate.”
META is a Hold – Buy or add whenever it hits its lower Bollinger Band, now under $556.
Palantir (PLTR – $74.21) will join the Nasdaq 100 on December 23, requiring all the Naz 100 index funds to buy the stock.
They extended their long-standing partnership with the US Army to deliver the Army Vantage capability in support of the “Army Data Platform” (ADP). The total value of the agreement is $400.7 million through 2028, with a total available ceiling of $618.9 million. PLTR is a Buy under $22 for a $100+ target.
PayPal Holdings (PYPL – $86.78) will ride the holiday shopping season to an excellent December quarter. I am seeing a PayPal payment option almost everywhere. Instead of having to enter my payment data over and over, one click pays from my bank account.
Cyber 5, from Thanksgiving through Cyber Monday, is the busiest and most important time of the year for hundreds of millions of PayPal customers. PayPal was the most popular payment app on the iPhone on Black Friday, Small Business Saturday, and Cyber Monday in the US and Germany. Cyber Monday was PayPal’s biggest day of the year so far, with approximately $7 billion in payments processed. They powered more than 70 million transactions for small and medium-size businesses and helped more than 1.2 million small and medium-size businesses have their best sales day of 2024.
They also saw increased use of BNPL and Pay with Venmo, driving double-digit growth across both payment methods compared to Cyber 5 last year. They launched an exclusive Cyber Monday campaign with TikTok, giving users 25% off when they checked out with Venmo on TikTok Shop. This campaign was one example of how they’re working to drive Pay with Venmo adoption and further monetize the platform. PYPL is a Buy under $68 for a double in three years.
SoftBank (SFTBY – $29.06) is Overexposed to AI, according to a Seeking Alpha contributor who will remain mercifully nameless. I didn’t know heavy exposure to AI is a negative, but I don’t mind him getting the word out. Heavy AI exposure at 50% of hard book value. Yum.
Moody’s Japan raised their rating on Softbank’s debt from Stable to Positive.
President Trump and SoftBank CEO Masayoshi Son announced that SoftBank would invest $100 billion in the US over the next four years in a boost to the U.S. economy. Trump said that the investment would create 100,000 jobs focused on artificial intelligence and related infrastructure, with the money to be deployed before the end of Trump’s term. Son made a similar pledge in December 2016 at Trump Tower, when Son said he would spend $50 billion (he did) and create 50,000 jobs (who knows?). SFTBY is a Buy under $25 for a first target of $50 in the next two years.
Small Tech
Enovix (ENVX – $5.03) slipped after CFO Farhan Ahmad left the company. I have not been able to confirm that he resigned or was booted, but I think he resigned. CEO Raj Talluri went out of his way to say: “We thank Farhan for his service, which left us with a healthy balance sheet with over $250 million of cash, a reduced cost structure, a strong global finance team, and a clear financial runway to ramp the production of our high-energy battery in our new state-of-the-art factory in Penang, Malaysia. We wish him success in his future endeavors.” That’s a lot of fulsome praise if he was booted.
Android XR is an extended reality operating system developed by Google and based on Android. It was announced in December 2024 and will launch in 2025 on a headset manufactured by Samsung and a pair of smartglasses developed by Google DeepMind. It is heavily integrated with the Gemini generative artificial intelligence–powered chatbot. This may be the development contract Enovix announced with a major XR company. Their advanced battery technology is ideal for powering XR devices due to their high energy density and fast charging ability.
Raj has said Enovix’s latest capital raise was a strategic move to be able to increase production capacity ahead of potential high demand. 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 – $9.98) announced the general availability of Fastly AI Accelerator. I’ve discussed this before. It is a semantic caching solution that stores the answers to common Large Language Model (LLM) queries. Subsequent similar queries don’t have to go back to the central LLM, saving money and time. Fastly AI Accelerator delivers an average of 9x faster response times. FSLY is a Buy up to $10 for a 3- 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.
QuickLogic (QUIK – $7.96) appointed Andy Jaros as Vice President of IP Sales. He has over 20 years of experience in semiconductor IP, embedded systems, and business development at companies including ARM, Virage Logic, Synopsys, and most recently as VP: Sales at FlexLogix.
Intellectual property sales carry a very high profit margin and will be a main derive of QuickLogic’s earnings in the decade ahead. QUIK is a Buy up to $10 for my $40 target as their earnings repeatedly surprise Wall Street.
Primary Risk: Customers’ product introductions and associated royalties are unpredictable.
Rocket Lab USA (RKLB – $23.22) delivered its second Pioneer spacecraft to Vandenberg Space Force Base and completed production and testing of a third for Varda Space Industries, the world’s first orbital pharmaceutical processing and hypersonic Earth re-entry logistics company. The two spacecraft are part of a four-vehicle contract between Rocket Lab and Varda, aimed at revolutionizing commercial manufacturing in space. 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
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.
Compass Pathways (CMPS – $3.92) stock will be added to the NASDAQ Biotechnology Index (NBI) on December 23. 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 3
Probable time of first FDA approval: 2027
Probable time of next financing: Late 2025
Inovio (INO – $1.85) was cut nearly in half after they sold 10 million units of one share of stock plus one $3.76 warrant for $3 each. They will bank about $27.6 million, which will carry them past FDA approval of INO-3107 in early 2026. The stock was down 41.6% last Friday – that’s a gift. INO is a Buy for a long-term hold as their numerous drug programs advance.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 3
Probable time of first FDA approval: Early 2026
Probable time of next financing: After FDA approval in 2026 or never
Medicenna (MDNAF – $1.15) presented preclinical data on MDNA11 as a first step to shrink breast tumors before surgery and prevent metastasis at the San Antonio Breast Cancer Symposium (SABCS). Single-agent MDNA11 was more effective than a combination of immune checkpoint inhibitors in preventing metastasis and achieving long-term survival in an aggressive mouse model of triple negative breast cancer. Mice treated with MDNA11 prior to surgery were able to mount powerful immune and memory response to subsequent tumor rechallenges, demonstrating the potential to prevent new tumor growth.
Metastasis is the leading cause of cancer-related deaths worldwide. One in eight women will be diagnosed with breast cancer in the US and one-third of those will become metastatic, resulting in approximately 42,000 breast cancer deaths every year. Approximately 97% to 99% of those deaths will be from metastatic breast cancer. Among breast cancer subtypes, triple-negative breast cancer is particularly aggressive, spreading more rapidly and representing a significant unmet medical need. Buy MDNAF under $3 for a first target of $20.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Entering Phase 3
Probable time of first FDA approval: 2025
Probable time of next financing: 2025
ScyNexis (SCYX – $1.01) completed the dosing of the first cohort of subjects in its Phase 1 trial of SCY-247, their second-generation fungerp for the treatment of severe invasive fungal infections. Buy SCYX under $2.50 for a first target price of $20 after ibrexafungerp is approved for hospital use and a buyout at $50.
Primary Risk: Ibrexafungerp fails to sell.
Clinical stage of lead product: Approved
Probable time of next FDA approval: 2025
Probable time of next financing: Never
Inflation MegaShift
Gold ($2,610.10) was clipped for 2% or $53.70 an ounce on Fed Day on fears higher interest rates mean a stronger dollar and a headwind for gold. The yellow metal is having its best year in a decade in 2024 as central bank and investor buying offset slowing growth in consumer demand, especially from China, It will have “much more modest growth” next year, according to the World Gold Council’s 2025 outlook. They wrote: “The market consensus of key macro variables such as GDP, yields and inflation – if taken at face value – suggests a positive but much more modest growth for gold in 2025.” But then came the weasel words: gold could gain even more if central banks ramp up their acquisitions, or “a rapid deterioration of financial conditions” leads investors to seek out safe-haven assets, or Chinese consumers could change the balance if they come back in,. Ya think? And somebody actually got paid to write this “forecast.”
I’ll stick with the fractal dimension, which shows an absolutely classic and necessary consolidation after the huge run this year. Let the momo speculators and weak hands sell until gold gets over the 55 fractal level, where it will have enough energy to make the next push up to $3,000.
Miners & Related
Coeur Mining (CDE – $5.77) announced initial results from its 2024 drilling program at Silvertip. The 48-hole program cost $12 million and drilled over 68,000 feet. CEO Mitch Krebs said: “Silvertip’s three-pronged 2024 exploration strategy successfully (1) expanded known areas of mineralization, (2) doubled the strike length of the Southern Silver Zone to over 2,000 meters, and (3) identified three new large targets located on our over 125,000 acre land package.”
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. Bitcoin (BTC-USD on Yahoo – $97,551.08) will surge in 2025, according to Sygnum Bank, as sovereign wealth funds, pension funds, and endowments are expected to expand their bitcoin allocations. They said this trend is supported by a “multiplier effect,” where even modest inflows into bitcoin-focused financial products, such as spot exchange-traded funds (ETFs), result in disproportionately large price movements. Sygnum believes this effect could intensify in the coming years, positioning 2025 as a transformative year for the cryptocurrency market.
Click for larger graphic
BTC-USD, ETH-USD, IBIT, and ETHA are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
iShares Bitcoin Trust (IBIT- $54.72) remains the cheapest and easiest way to buy bitcoin. IBIT is a Buy for the 2028, 2032, and 2036 halvings.
Primary Risk:Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
iShares Ethereum Trust (ETHA- $25.57) remains the cheapest and easiest way to buy ethereum. ETHA is a Buy.
Primary Risk:Ethereum falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Oil – $69.85
Oil was almost unscathed on Fed Day after the latest Energy Information Administration data showed US crude exports rose 1.8 million barrels last week to the highest since July. The report also showed a fourth straight weekly decline in US oil inventories and a 3.18 million-barrel drawdown in distillate stockpiles.
CIBC Private Wealth Group said: “Stronger exports indicate an uptick in global demand, while strong draws in distillate are a very welcome reprieve from the sluggish industrial growth that has plagued most of 2024.”
Reports that Kazakhstan intends to comply with OPEC+ quotas next year also dampened concerns about oversupply. Kazakhstan had unsettled markets by signaling that it would adhere to its original plan of raising oil output by 190,000 barrels a day, despite OPEC’s decision to delay production hikes, but they have backed down.
The International Energy Agency (IEA) raised its projection for 2025 oil demand growth, driven by emerging Asia, from last month’s forecast of “just shy of” 1.0 million barrels a day to 1.1 million barrels a day. The IEA and the paper oil bears still expect robust production in 2025 from non-OPEC+ nations such as the US, where President Trump has promised to encourage domestic development. That’s not gong to happen.
The July 2026 Crude Oil Futures (CLN26.NYM – no trades – last was $65.00 on Dec. 5) 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 – $36.73) is a Buy under $40 for a $100+ target.
Vermilion Energy (VET – $8.86) announced their 2025 budget, an 8% dividend increase, and strong German well test results.
The 2025 capital expenditure budget of $600 – $625 million includes drilling and infrastructure capital allocated across all major business units, including ongoing drilling and debottlenecking on the BC Montney asset and drilling capital allocated to European gas exploration and development in Germany, the Netherlands, and Central and Eastern Europe. Their 2025 production guidance of 84,000 – 88,000 barrels of oil equivalent a day (boe/d) is 2% higher at the midpoint compared to their original 2024 production guidance. 2025 fund flows from operations (FFO) will be about $1.0 billion and free cash flow (FCF) will be approximately $400 million.
They increased the quarterly cash dividend by 8% to C13¢ a share, effective with the dividend payable on April 15. The variable component of shareholder returns will continue to be allocated to share buybacks. So far, Vermilion has repurchased and retired 16.8 million shares since starting the share buyback program in July 2022. That includes 9.1 million shares year-to-date in 2024, which has reduced the share count by 4.8% to 154.5 million. VET is a buy under $11 for a target price of $24 or more.
Primary Risk: Oil prices fall.
EQT (EQT – $42.65) is benefiting from natural gas prices at their highest in more than a year after Energy Information Administration data showed that stockpiles were drawn down more last week than traders expected. The greater-than-expected burn reduced the volume of gas in domestic storage facilities to 4.6% more than the five-year average, down from a surplus of 7.8% a week earlier. At $3.62 per million British thermal units, natty is up 44.8% from a year ago and has more than doubled from historically low prices reached earlier this year.
Click for larger graphic h/t Wall Street Journal
EQT is a buy under $35 for a first target of $70 and a long-term hold for much higher prices.
Primary Risk:Natural gas prices fall.
Freeport McMoRan (FCX – $38.24) declared a quarterly cash dividend of 15¢ a share, half being the base dividend and the other half the variable dividend of 7.5¢ a share in accordance with the company’s performance-based payout framework. FCX is a buy under $44 for a $65 target within two years.
Primary Risk: Copper prices fall.
* * * * *
Jeffrey Ubben‘s Investment Framework
Click for larger graphic h/t @marketplunger1
* * * * *
Palmer Luckey, CEO of Anduril, Predictions:
#1: “Future wars will be won by gamers.” Palmer believes gaming skills are perfect for modern warfare: Pattern recognition, Quick decision making, High-stakes performance, Managing multiple systems. The military is already recruiting gamers for drone operations.
#2: “China’s biggest weakness isn’t tech – it’s creativity.” Palmer’s insight: While China can copy technology, it struggles to innovate. His solution? Build weapons so creative and unconventional that they can’t be replicated. Like his autonomous “Road Runner” drones that hunt enemy aircraft.
#3: “The era of expensive military equipment is over.” Traditional defense contractors: $1B+ fighter jets – Decades to develop – Massive maintenance costs. Palmer’s approach: – $1M autonomous systems – Rapid development – Minimal maintenance. He’s making warfare affordable for democracies..
#4: “VR will revolutionize military training.” Before Anduril, Palmer used VR for: PTSD therapy for veterans – Combat simulation – Mission planning. Now he’s building systems where soldiers can practice with real weapons in virtual environments.
#5: “The next Pearl Harbor will be digital.” Palmer warns: Future attacks won’t use bombs. They’ll target: Power grids – Financial systems- Communication networks That’s why he’s building AI-powered defensive systems that never sleep.
h/t @my_entre_ai
* * * * *
Your tracking quantum computing Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Priced 12/19/24. 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
Corning (GLW – $47.06) – Buy under $33, target price $60
Gilead Sciences (GILD – $91.09) – Buy under $80, target price $120
Palantir (PLTR – $74.21) – Buy under $22, target price $100+
PayPal (PYPL – $86.78) – Buy under $68, target price $136
Snap (SNAP – $11.30) – Buy under $11, target price $17+
SoftBank (SFTBY – $29.06) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $8.03) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $63.31) – Buy under $60; 3- to 5-year hold
Fastly (FSLY – $9.98) – Buy under $14; 3- to 5-year hold to $80+
PagerDuty (PD – $18.65) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $7.96) – Buy under $10, target price $40
Rocket Lab (RKLB – $23.22) – Buy under $13, target price $30+
$20-for-$1 Biotech
AbCellera Biologics (ABCL – $2.71) – Buy under $6, target $30+
Akebia Biotherapeutics (AKBA – $1.79) – Buy under $2, target $20
Compass Pathways (CMPS – $3.92) – Buy under $20, hold a long time for a 10x return
Editas Medicines (EDIT – $1.34) – Buy under $6 for a double in 12 months and a long-term hold to much higher prices
Inovio (INO – $1.85) – Buy under $14, hold a long time
Medicenna (MDNAF – $1.15) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.01) – Buy under $3, target price $20, then $50
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($29.44) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $27.67) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $33.08) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $23.63) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $33.26) – Buy under $30, target price $50
Coeur Mining (CDE – $5.77) – Buy under $5, target price $20
Dakota Gold (DC – $2.10) – Buy under $2.50, target price $6
First Majestic Mining (AG – $5.45) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.32) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.36) – Buy under $10, target price $25
Sprott Inc. (SII – $42.35) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $97,551.08) – Buy
iShares Bitcoin Trust (IBIT – $54.72) – Buy
Ethereum (ETH-USD – $3,429.68 – Buy
iShares Ethereum Trust (ETHA- $25.57) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – no trades; last was $65.00 on December 5) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $36.73) – Buy under $40; $100+ target
Vermilion Energy (VET – $8.86) – Buy under $11; $24 target
Energy Fuels (UUUU – $5.41) – Buy under $8; $30 target
EQT (EQT – $42.65) – Buy under $35; $70 first target
Freeport McMoRan (FCX – $38.24) – Buy under $44; $65 target within two years
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.
Apple Computer (AAPL – $249.79) – Expect to move back to Buy under $175 for new iPhones
Meta (META – $595.57) – Expect to move back to Buy
TG Therapeutics (TGTX – $30.95) – Hold for buyout at $40+
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First
MM–SCYX. Please address my post on the previous board about this POS DOG. The only hope is if YMB poster Lemuel’s theory is correct. He claims that GSK is doing the MARIO trial using inventory of Brexa in order to rebrand it for general anti fungal use. There was no FDA manufacturing halt which I say was a hoax story, to hide the claim of Lemuel. What do you think of this theory? All you did in today’s RR is trot out 247 again. That is years off. The stock will decay to near zero without Brexa sales while we wait.
Let’s see if he responds,’your not asking him for a kidney just his thought
LOL. Maybe I’ll get rich from AKBA, but it some MD actually reverses CKD, I’ll be humbled.
Total BS. The MARIO trial is suspended under a clinical hold. ScyNexis is conducting the trial, not GSK. They will announce when the FDA lifts the hold and when they restart the trial using the new Brexa. I do think it’s possible that GSK delays or never reintroduces Brexafemme for VVC and rVVC. The big money is in hospital use.
I have no interest in SCY-247 as a driver of ScyNexis’ stock price.
What is REALLY BS is the 18 month clinical hold. It doesn’t take 15 months and counting to get a new manufacturing plant without cross-contamination. I say this is an FDA HOAX, HOAX HOAX. Lemuel’s theory is more plausible. On Stocktwits, his name is Lemuel Pitkin. GSK is in charge, and SCYX just collects royalties. GSK is the employer calling the shots, and SCYX is the lackey employee.
Chris, I wrote you about CGTX on the last board.
I believe you are correct about the amyloid being a result and not a cause of Alzheimers. I also think the more rapid progression of DLB than AD may be why CT1812 didn’t meet endpoints for its 6 month AD trial but showed great results for DLB. Will be an interesting story to follow.
Great book called “The End of Alzheimers” by Dr. Bredesen He has success treating people with Dementia It is not a pill but a lifestyle change with certain supplements
Right. Chronic bad diseases like Alzheimers’ are multifactorial. Single or a few drugs target limit mechanisms and don’t produce much benefit, if any. Doctors and patients can search Bredesen’s site, Apollo Health for Recode practitioners and training. In his book, he recounts his disgust at the research community which controls the money. They have tunnel vision favoring magic bullets, and deny the multifactorial, holistic approach. All of this is fostered by the evils of socialism. Tyranny of the academic/Big Pharma establishment wanting to maintain control using magic bullets.
Investors can make great money in companies like AKBA, which target a limited area, anemia in CKD. They are not going for a cure of CKD, which has been a near complete failure to date.
Hey MM, Did I miss a decade???
Happy 26thanniversary to bitcoin. The first bitcoin block was mined on January 3, 2009
If only if we could have known!!!
Fixed, thanks. Made a note to reuse this on January 3, 2035.
Our fearless leaders just don’t get it. A trillion here a trillion there , pretty soon you are talking real money. (Deficit) . You can’t control inflation when you can’t control spending. Politicians have been doing it so long it’s a conditioned response. The people in charge now can’t believe it is possible now to spend less. The Roman Empire survived over 500 years until Caesar was murdered and his kid took over. His kid put the Roman Empire to its death with inflation!! Inflation was the cause of the rise of Hitler in Germany. The US is NOT immune to its demise via the evils of inflation caused by crazy government spending!!
Traitor RINO Speaker Mike Johnson is still a big spender with no principles. Trump instigated a 90% reduction in page count of the spending package. It happened quickly. Shame on Congress for failing to get things done on their own. They still don’t have time to read 100 pages, let alone 1500. That’s what tyrant leaders do–suppress debate.
Hi John….Sorry. G. Julius Caesar was killed before the Republic was transformed into into the empire and it lasted for 500 years after his death. The Eastern Roman Empire lasted almost another 500 years.
I agree that consistent debasing of the coinage (and stupid economic interference) was a cause of the weaking and fall of the West.
JGMD Thank you for the sage advice re living longer I wish I had gotten it sooner a month ago i was taking a blood thinner Edarbakor I believe is the name It made me dizzy and I crashed down on a tile floor and broke my hip. I now am learning to walk again with an iron hip. I do not take the pill nor see the doctor anymore. I do not know where I go for medical advice re my high blood pressure, I will do intermiten fasting and lose weight I am taking xaralto and Losarton
Hello Don and JGMD, please share the advice about living longer, Im all ears!!
Steve go to last weeks report at 923 pm you will find Dr.JGMD reply to me for his advice Get away from drugs I was taking a drug for blood pressure that made me dizzy I fell and broke my hip Now I am learning to walk with a metal hip Please check out the side affects of any drug doctors give you Work towards getting off all drugs Exercise is the elixer of long life A book called the “Blue Zones” by Dan Buettner tells secrets of people who live long around the world.
One of the few BP drugs I have accepted is losartan. But recently, I have learned that it causes type 4 renal tubular acidosis. Renal tubular acidosis is a type of metabolic acidosis. Acid blood increases inflammation. It may actually worsen kidney function, although it has been promoted for kidney protection. There are a few pro/con effects which few doctors have thought about. This is one reason for intelligent people, I am a strict disciplinarian that diet and exercise are the best ways to go. For dummies who just want drugs that are covered by insurance, I prescribe the few drugs I accept.
MM You have v been saying we are going to have a Santa Claus rally but the market has been crashing.Are you still thinking that way?
IF I WAS NOT A LIFETIME MEMEBER,I WOULD BE DROPPING THIS SUBSCRIPTION —SHOULD HAVE QUIT AFTER THE CALIFORNIA TECHNOLOGY LETTER–TO HAVE NO CHANGES IN YOUR PICKS AND STILL HAVING SCYX AS A TOP PICK IS A “JOKE”
Remember 1st target 30.00 and then 50.00 dollars a share pretty lame
There has to be a reason that scyx is being pushed down ,maybe gsk wants to buy them for 50 cents a share,or that MM has someone shorting most of his biotech picks for a reason
Like nvta drove it right to bankruptcy
Any ideas
NVDA and ANET GOOG I own doing well
Tx
I am about to buy SCYX or AKBA, or maybe both. I know everyone hates SCYX, yet the company did two huge things most biotechs never do: they got FDA approval and signed a huge Big Pharma deal. They were blindsided by their GMP manufacturer making ibrexafungerp on the same line they made ezetimibe, which uses beta lactam.
There is FDA draft guidance not to produce other drugs with equipment that has used beta lactum. Was this SCYX management’s fault? If you think so, you probably should not own the stock. I think it’s just bad luck in an otherwise great opportunity.
Two things I have learned about my foray into biotech stocks:
That’s a big reason I started Biotech Moonshots on Substack for people willing to buy and hold for the 20x return or more. Meanwhile, you can easily drop your subscription by not signing in, or just enjoy AAPL. META, PLTR, PYPL, RLB, gold, bitcoin, etc.
Just checking MM, are you holding any scyx at this time,and if not have you ever had any
I want to buy SCYX but AKBA is the better shirt-term buy.
MM, do you have a link to your Biotech Moonshots on Substack?
Yes, but it’s just a bio industry writeup + the first part of the Radar Report + the same biotechs + NTLA.
https://open.substack.com/pub/biotechmoonshots/p/1216-1220-biotech-moonshots-update
I haven’t been keeping up or active here for a long time. I realized during the biotech bear market that I didn’t have the stomach for the 20 for $1 stocks that I thought I had. Also, it seems that under $10 most funds aren’t even allowed to buy and under $5 is a recipe for disaster. I’m thankful that I didn’t allow my emotions to get involved and stay long BB.
I wish I had been around to get in on PLTR. I got into AAPL and other techs cheap following MM and likely bought GLD following bullish comments on the commodity here. So, I can’t complain at all.
All that said, I’m wondering this, @MichaelMurphy. Given your statement above about realizing that biotech moonshots are a lot harder than you thought, do you have any plans to remove them from this newsletter and go back to CTSL style?
Citing the lack of a venture mindset as a reason the recommended biotech stocks haven’t worked out here implies 20x rewards would have come to investors if they’d only been more patient, which couldn’t be further from the truth. Of the 19 biotech stocks that have been in the portfolio at some point since I joined at the start of 2020 the median recommendation date for those stocks is roughly the beginning of 2018. The median return on those 19 stocks is -94.5%, which is the exact inverse of 20x return. They’ve collapsed to one twentieth of their original value! Meanwhile, the S&P 500 is up 132% over the same time period.
The biotech market has changed. There was a time several years ago when an early stage biotech could hold a rich valuation based on promising early phase results but that hasn’t been the case the last few years. Most of these 19 biotech stocks were recommended far to early. In the current market, a biotech isn’t rewarded until it has an FDA approved drug and impressive sales, like TGTX. Stocks such as SCYX and AKBA, that have an FDA approved drug but don’t yet have impressive sales still languish. And it’s a rare biotech now without an FDA approved drug that trades at much of a premium to their cash/investment position. A venture mindset in the current biotech market is a recipe for disaster as it exposes an investor to risks that could be avoided by waiting. An investor can now buy a biotech stock cheap at the time when a drug first goes to market, such as where AKBA is at now, thereby avoiding much of the downside risks and dilution associated with buying sooner.
One of the takeaways should have been recognition of how devasting dilution has been to your biotech picks. It’s been the demise of the vast majority of these 19 biotech stocks over the last four years. Of the eight biotech stocks still held in the portfolio at the end of 2024, seven finished 2024 below $3, and over half are just $1 and change primarily due to dilution. Any additional capital raises at those prices will be devastating to those stock prices.
Your tech picks have performed much better and don’t carry near as much downside risk. It’d be great to see more of those in the future.
Tech stocks like VLD also did poorly, exacerbated by dilution. Fundamentals count–being able to assess demand for products is key. Nobody needs lots of 3D printers, except the US govt for military needs. The usual delays in getting govt business in a crowded field where there are lots of high quality printers, caused the dilutions.
The main key to AKBA’s success is the TDAPA program, where 2 year subsidies are 5X the market price for anemia treatments, either ESA or V. Subsidies slowly peter out over the following 3 years. There were several HIF drugs on the international market, all doing poorly without TDAPA. All were eliminated in the US after 12/19/24, leaving only Vafseo. This was the best accomplishment of CEO Butler, getting TDAPA for V. Without the V monopoly and TDAPA, I would not have bought AKBA. I was a pissed off KERX shareholder from Butler’s mismanagement, but he has redeemed himself with V and TDAPA. For nephrologists, it’s either V or ESA. Dialysis organizations are being paid nicely to push V over ESA, so expect V to be successful fairly soon.
Thanks MM for the Radar report and have a great holiday season. looking forward to the year recap report in January.
SCYX – Anyone? – seems like a good time to tax loss sell SCYX on Monday and possible buy back in 31 days. Can’t imagine anything good happening to the stock in next 30 days. Still #1 on MM’x ST list so likely would buy back. Thoughts?
I am just holding my SCYX shares. MM is obviously not paying attention at all. He needs to comment on Lemuel’s theory of GSK rebranding Brexa by doing the MARIO trial. No PR from GSK which owns Brexa. Even if things are happening, the stock will continue to plunge until there is some PR about plans.
Bought AKBA on today’s little dip. I expect them to announce a contract with Fresenius, the other big dialysis company (they already have DaVita), then announce the Vafseo launch on Thursday, and then present at the big JPMorgan conference on Jan. 16.
Chris, you must be happy about today’s NGENF PR that the last of 20 patients has been enrolled in the chronic SCI trial. Now we wait 16 weeks to complete the trial on this new patient with either NVG 291 or placebo. A few more weeks to analyze and report data, before June 30. Rumor is that one patient is walking with aid of parallel bars. The stock is still risky. If this is the only patient out of 10 who responded to a mild degree, the stock plunges in June. Protocols for 291 will have to be tweaked, with more dilution for all the trials that will be needed. But if 3/10 responded, and the 10 placebos are offered 291 in the open label extension, more responses will be seen. Maybe Jerry Silver will tweak the protocol for the placebos to increase the batting average of significant responses.
JGMD, where did you see the rumor about the one patient? I usually find these “rumors” to be credible. Not always though.
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