Author Archives: Michael Murphy

Dear New World Investor: It’s Time To Invest In Human-Like Robots Artificial Intelligence will have many impacts on our economy and society. Large Language Models already are answering customer questions, helping coders debug programs, and designing biotech drugs. AI also will affect the physical world, from full self-driving cars to humanoid robots. Both need to quickly adapt to their environment and respond appropriately to new information. That’s why Tesla and Nvidia are making large investments in robot development, as well as the many robot-focused private companies like Boston Dynamics. Tesla’s Optimus robot already is working in their offices and factories....

Read More »

Dear New World Investor: Buy The Next Big AI Stock My position on Artificial Intelligence (AI) is that what we have and are likely to have for the foreseeable future actually is Imitative Intelligence, if only because no one understands how human intelligence really works. Using lots of very fast parallel-processing semiconductors, a.k.a. graphics processing units or GPUs, can make it seem like a computer is thinking, but really what it is doing is wowing us by retrieving and comparing data at speeds we’ve never seen before. We saw this when IBM’s Deep Blue computer beat world chess champion Garry...

Read More »

Dear New World Investor: The average New World Investor recommendation finished 2024 up 20.2%, or 16.7% including the two S&P put recommendations that expired worthless. The biotech and small cap stocks made it underperform the S&P 500 and Nasdaq Composite. Click for larger graphic Business Insider, 12/28/23: “Legendary investor Jim Rogers sees an epic market bubble and looming economic disaster. He hopes to short the ‘Magnificent 7’ stocks when the time is right.” Porter Stansberry, 12/22/23: “The Naughty List – 10 Stocks Headed Straight to Hell” Click for larger graphic Although some gurus were trying to scare people at the...

Read More »

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...

Read More »

Dear New World Investor: The headline Consumer Price Index (CPI) for November increased 2.7% year-over-year (YoY), the second consecutive increase in annual inflation – a trend not seen since April, and 0.3% month-over-month (MoM). Both were a slight uptick from October’s 2.6% YoY and 0.2% MoM. It was the largest monthly gain since April. But shelter costs, the largest component of the CPI that accounted for 40% of November’s overall monthly CPI increase, rose just 0.3% from October. This was lower than October’s 0.4% increase. On an annual basis, shelter costs rose 4.7% in November, down from October’s YoY gain...

Read More »

Dear New World Investor: The venerable Dow Jones Industrial Average went over 45,000, the S&P 500 and Nasdaq Composite hit new record highs, and bitcoin cleared $100,000 – so all is right with the world? Well, not quite. Inflation is enough above the Fed’s target and the labor data is not that bad, so the Fed is not going to be in a rush to cut interest rates. I still think the odds slightly favor another quarter-point cut on December 18, but the CME FedWatch shows 70.1% thinking we get the 25 basis point cut and only 29.9% thinking no...

Read More »

Dear New World Investor: The Fed cut the Fed funds rate a quarter-point (25bps) today, as I expected. They removed language from the September statement that they have “gained greater confidence” that inflation was moving towards their 2% target. Traders have begun to trim bets for another quarter-point cut in December and the number of reductions expected next year. Last Friday’s very weak October payrolls number, +12,000, was far below the +110,000 estimate. It was negatively affected to an unknown degree by hurricanes and strikes, but so was the consensus estimate. In other words, it was a useless number. September...

Read More »

Dear New World Investor: It’s been a week of economic news and earnings. The news paints a soft landing picture, although I still think we’ll see a mild recession no matter who wins the election. September Job Openings and Labor Turnover Survey (JOLTS): Job openings fell more than expected from August’s 7.86 million to 7.443 million, the lowest level since January 2021. The August figure was revised down from 8.040 million to 7.86 million. There is is much less tightness in the labor market – just a gentle cooling of labor demand. Wage growth should continue to slow and give...

Read More »