Dear New World Investor:

So December retail sales were up 0.6% and that was enough for the market to fear the bogeyman…err, Chairman Powell…might not cut rates as soon as they thought. So down went stocks yesterday. Well, duh.

It’s important for you to know that my economic outlook for 2024 is pretty different from Wall Street. A recent BofA poll showed US stock optimism at the highest level since 2021. BofA said there is “record optimism on rate cuts” and 79% of survey respondents expect the global economy to experience either a soft or no landing in 2024. Most respondents saw stocks as the best way to play the Fed rate cutting cycle.

Wall Street: The Fed will start cutting rates as early as March, surely by May; there will be no negative quarters for real GDP; the S&P 500 will touch 5000.

Me: The Fed will NOT cut rates until the Fall, if then (High for Longer); there will be two negative quarters of real GDP; but the S&P 500 will touch 5000 anyway

If I’m right, this will be the usual fourth year of a Presidential term with high-level churning that frustrates both bulls and bears, reduces the profit potential of buying options, and is a stockpicker’s market that provides regular buying opportunities and rewards fundamental progress.

At the same time, more market gurus are coming around to my position that we are in a secular bull market that will continue for many years. We could see the S&P 500 top at 15,000 in 2036. I disagree on some of the details in the BofA chart below (if you were investing in 1981 and 1982, you wouldn’t say a bull market started in 1980), but it is broadly correct.

Click for larger graphic h/t @AdamCorleoneJr

One big reason we are headed for a shallow recession is the M2 money supply is contracting for the first time since the 1930s.

Click for larger graphic h/t @GameofTrades_

The Fed’s favorite mouthpiece, @NickTimiraos of The Wall Street Journal, said the speed with which balances in the Fed’s overnight reverse repurchase agreement (ONRRP) facility have fallen over the last few months and the faster rate of Treasury balance sheet runoff are prompting Fed officials to start thinking about slowing down (but not ending) QT for Treasuries. That’s one reason the recession will be shallow, not deep.

A second reason is a large swath of the economy has become less sensitive to rising interest rates because so many borrowers, both homeowners and corporations, refinanced their debt at low rates in 2020 and 2021.

A third reason is the extremely high labor demand after the Covid lockdowns ended seems to have been largely worked off, per the JOLTS (Job Openings and Labor Turnover Survey) data. The starting point for this labor market cycle was so high that a 2.4 percentage point drawdown in labor demand has so far only led to a slowdown. Normally we would be in a recession already with these numbers. (h/t @stifelinst).

A fourth reason is that the manufacturing sector has been in a recession for months. The Institute for Supply Management (ISM) purchasing manager’s survey (PMI) peaked in March 2021 and has been below 50 (contraction) since October 2022. The Empire State Fed January survey crumbled to its second lowest level ever (May 2020, during Covid, was the worst) driven by sharp declines in new orders and shipments.

Click for larger graphic h/t @cvpayne

The yield curve just “de-inverted” as the yield on 2-year Treasury notes finally went below the yield on the 30-year bond for the first time since July 2022. Some on Wall Street think that means a recession is called off. Not so fast.

In the 2008 cycle, manufacturing production didn’t turn down until 16 months after the yield curve inverted in December 2007. Recession fatigue is at an extreme today only about 13 months after the 10-year/3-month inversion set off warning bells. It’s been quickly forgotten how long the 2008 cycle took.

Market Outlook

The S&P 500 was flat since last Thursday and remains stuck inside the 4720 to 4840 range. Chasing breakout moves in either direction has been a costly mistake so far. The Index is clinging to a 0.2% gain year-to-date. The Nasdaq Composite did a little better, gaining 0.5%. It now is up 0.3% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) fell 3.7% in the post-Biotech Week slump. It is down 2.5% year-to-date. The small-cap Russell 2000 dropped 1.6% as relative weakness continued in small-caps. It is down 5.1% in 2024.

There are about two weeks left of the buyback blackout window. Companies will start to exit blackout as they report earnings and then can start buying their stock again.

Click for larger graphic h/t The Market Ear

The fractal dimension is still in an uptrend that may take us to a new all-time high – but not much further.

Top 5

Changes this week: None

Near-Term – chronological order
SCYX – ScyNexis – Data releases and resolution of the manufacturing problem
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

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 forecast this morning for December quarter GDP increased to 2.4% due to increases in personal consumption expenditures growth and private domestic investment growth. The first official number comes next Thursday morning.

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What the presumed soft landing looks like, per BofA:

Click for larger graphic h/t @dailychartbook

Let’s focus in on their 2024 Gross Domestic Product forecasts. I think we’ll see at least two quarters with minus signs. They don’t. But it could be called a soft landing and a Fed success either way.

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

Friday, January 19
AAPL – Apple – Vision Pro pre-orders begin
QUIK – QuickLogic – 2:15pm – Needham Growth Conference

Monday, January 22
AG – First Majestic – Unspec – Vancouver Resource Investment Conference

Tuesday, January 23
AG – First Majestic – Through 1/25 – TD Securities Mining Conference,
Toronto

Wednesday, January 24
FCX – Freeport McMoRan – 10:00am – Earnings conference call
Short Interest – After the close

Thursday, January 25
SCYX – ScyNexis – Unspec – Poster on Preclinical Data on SCY-247 at the Advances Against Aspergillosis and Mucormycosis Conference
December quarter GDP – 8:30am – First estimate

Friday, January 26
Personal Consumption Expenditures Index – 8:30am

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 – $188.63) moved up today after BofA raised their rating to Buy from Neutral and increased their target price from $208 to $225. They predict a “stronger multiyear iPhone upgrade cycle” as consumers replace older handsets to take advantage of generative AI features coming this year and next, higher growth in services as Apple better monetizes its installed base, and the imminent Vision Pro spatial computing headset.

Pre-orders for Vision Pro begin tomorrow. The company announced a series of entertainment experiences that will be available on Apple Vision Pro. With more pixels than a 4K TV for each eye, combined with the Spatial Audio system, Vision Pro enables users to watch new shows and films from top streaming services including Apple Originals from Apple TV+, transport themselves to stunning landscapes with Environments, and enjoy all-new spatial experiences that were never possible before, like Encounter Dinosaurs.

Apple has overtaken Samsung as the world’s top smartphone seller, ending Samsung’s 12-year run as industry leader. The iPhone took the top spot in 2023 with 234.6 million units sold, a 20.1% market share, according to International Data Corporation (IDC). Apple has been the largest smartphone maker in terms of revenues and profits, but this is the first time it has led the market in terms of volume. IDC said this was due to the increasing popularity of high-end phones, which now account for more than 20% of the market.

AAPL is a Buy the morning of February 2, after their December quarter earnings report and before any reports on Vision Pro sales.

Corning (GLW – $30.16) said Samsung’s new Galaxy S24 Ultra uses Corning’s new Gorilla Armor cover material. It offers an advanced combination of durability and visual clarity, delivering a richer display in sunlight and greater protection against damage caused by daily wear. GLW is a Buy under $33 for the 5G cellular buildout, followed by the smartphone upgrade to use 5G services. My target is $60 in 2025 .

Meta Platforms (META – $376.13) said by the end of this year they will have about 350,000 Nvidia H100s and about 600,000 H100 equivalents, including other GPUs. This is one way to tell who is going to dominate the AI Age.

The stock is nearing its all-time high of $382.18 set on September 7, 2021. Guggenheim just maintained their Buy rating due to strong holiday sales of the Quest 3 headset. Mizuho Securities reiterated their Buy rating and raised their target price from $400 to $470. They said consensus expectations for sales growth are conservative, operating expenditures are declining, and Meta will use artificial intelligence to automate customer service for WhatsApp messaging.

It’s obvious from the two-standard-deviation chart that the best time to buy Meta is when it is two standard deviations below its average price, but it’s also obvious that those opportunities are fleeting. So I am raising the buy limit to $345, still for a $400 target in 2024, and then much higher as the bull market progresses.

Small Tech

PagerDuty (PD – $26.05) presented at the Needham Growth Conference (WEBINAR and SLIDES HERE). Management said their mission is to revolutionize operations and build customer trust by anticipating the unexpected in an unpredictable world. They meet customers where they are – often dealing with problems manually – and lead them through to the preventative level.

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They drive value for customers by demonstrating a fast two-month payback, a 77% reduction in the time needed to respond to issues, and a 74% reduction in unplanned downtime. They see a very large market:

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They have over 15,000 paying customers and another 7,000 using a little bit free. They are pro forma profitable with a 14% operating margin, on track for their 20% long-term model.

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The stock jumped after Bloomberg reported that they have takeover interest from private equity firms and are speaking with advisers about a possible sale. I hope they don’t sell because they can grow for years. They’d have to get ~$40 a share to even think about it. 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 – $4.85) is getting ready for their 43^rd Electron launch, including a recovery mission to bring back the rocket. To help protect against re-entry forces as Electron returns from space, this rocket includes a silver heat protection called TPS, and an extended carbon-composite shield to protect the Rutherford engines.

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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 – $0.29) presented at the Needham Growth Conference today (WEBINAR and SLIDES HERE). They were founded in 2014 to commercialize a technology that allows complex structures to be built by additive manufacturing (AM) without requiring the internal supports needed by all other AM companies. They have over 50 software and hardware patents.

They now have over 40 customers with over 100 installed systems, including 25 at SpaceX. The casting and forging market today is over $100 billion. AM replaces those parts. The AM market is growing more than 20% a year to over $30 billion by 2032. They only need a small percentage to be wildly successful.

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Complex products with many internal parts that are hard to machine and assemble are ideal AM applications. Think rocket and jet engines, fuel delivery systems, heat exchangers, and many more. These can be designed and built (and therefore tested and redesigned, if necessary) much faster with AM – four to six weeks instead of 12 to 18 months.

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Velo3D’s product line now handles nickle and titanium for general manufacturing, aluminum and copper for aerospace, and tool steel for automotive applications.

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The strategic initiatives they announced in the September quarter earnings conference call included a 40% cost reduction to get to profitability this year. To conserve cash they are not buying any new inventory and are only building to order. They’ve expanded customer support and implemented new sales and service programs that have increased bookings.

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They have the liquidity to get to profitability by the end of 2024 and expect improving cash flow every quarter.

For the last two days, they’ve been exhibiting at the Military Additive Manufacturing Summit & Technology Showcase. Kratos Defense & Security Solutions bought a Sapphire printer for rapid prototyping and manufacturing. Kratos said: “It’s important to our team to leverage new, advanced manufacturing technologies so we can maintain our leadership in the defense industry and better serve our customers. With Velo3D’s solution, we expect to be able to further unlock high-speed manufacturing capabilities that reduce lead times and lower costs of the parts we develop. In addition, it will allow us to rapidly innovate and accelerate design cycles for parts used in existing platforms.”

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

Using artificial intelligence to improve drug discovery and development has been the Holy Grail for years, and several techbio companies have built their mission and market capitalizations around it. They include Absci (ABSI), Enzolytics (ENZC), Exscienta plc (EXAI), ImmunoPrecise Antibodies (IPA), Recursion Pharmaceuticals (RXRX), Relay Therapeutics (RLAY), and many others. All of them are at risk of failure.

The reason is the Grandmother Effect that killed hot rodding. After my 16th birthday, like many other 16yo males, I spent hours working on my hot rod (’50 Plymouth Convertible, black with a red interior, lowered 2”, nosed and decked, fender skirts, dual glasspacks – total babe magnet). Then Detroit started producing muscle cars, and it seemed kind of silly to work that hard when your grandmother could go to the local dealer and buy a car that could dust you.

Replace “ muscle car” with “comprehensive AI software” and replace “Detroit” with “Nvidia” and you’ll see the problem. Nvidia presented last week at the JPMorgan Healthcare Conference (SLIDES HERE and TRANSCRIPT HERE). Is Nvidia all of a sudden a biotech company? Well…sort of, in that AI will revolutionize drug discovery and the practice of medicine and Nvidia is making a comprehensive AI software suite available to anyone, grandmothers included. Any company that wants to stay relevant can access the software over the cloud or on their own supercomputer, either of which will add to the demand for Nvidia’s AI chips. Seed-round startups can be top-tier AI biotech companies.

Kimberly Powell, Nvidia’s VP: Healthcare, said Nvidia is developing software that any company can use, either in their own data center or on the cloud. Deep Cells REMI is a new platform for cell imaging, sorting, and high dimensional analysis, all in one instrument. It is creating a new field called morpholomics. She showed a video simulating a melanoma cell physically transforming to a functional state that gives it the ability to transmit to other tissues…metastasis.

Spatial Genomics is the study of single cell genomics in 2D and 3D to understand their organization across tissue samples. It helps researchers understand how cells interact and the genes they each express, so it has broad application in basic biology, clinical diagnostics, and drug discovery.

Their NanoStrings CosMx system is capable of taking a tissue of over a million cells and visualizing 600 different gene and protein targets per cell. That’s 600 different genes and protein targets for all one million cells. Nvidia is powering the next generation of drug discovery:

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The company is building a compelling suite of drug development products.

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Industry leader Amgen is building generative AI models – imagine a laser-focused ChatGPT – to find new human data insights for drug discovery. If anyone, including your grandma, can be a techbio company, then what is AI+biotech really worth?

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- $1.40) published the slides from their JPMorgan Healthcare Conference presentation last week (SLIDES HERE). They see a $1 billion opportunity for vadadustat in dialysis.

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Because vadadustat is an oral drug, they have a real opportunity in the over-80,000 US patients who are on home dialysis and the over-100,000 that start dialysis every year. Because it is so effective, they also will get tried for the over-150,000 patients on higher doses of erythropoiesis-stimulating agents (ESAs).

They expect their partner Medice to launch vadadustat in Europe in the first half of 2024. There are at least 325,000 dialysis patients in Europe currently treated for anemia due to chronic kidney disease,

The company has a path to profitability.

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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 date 3/27/24
   Probable time of next FDA approval: March 27, 2024; TDAPA October
   Probable time of next financing: Late 2024 or never

Compass Pathways (CMPS – $8.13) entered another research collaboration agreement, this time with Hackensack Meridian Health, to develop the optimal clinical model for COMP360 psilocybin treatment. Hackensack Meridian is a leading not-for-profit health care organization and the largest, most comprehensive integrated network in New Jersey. Compass obviously is setting the stage for the drug’s launch. Smart. 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: 2025
   Probable time of next financing: Late 2025

Medicenna (MDNAF – $0.33) changed auditors from PricewaterhouseCooper (expensive) to MNP (cheaper). There were no issues with PricewaterhouseCooper. 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

ScyNexis (SCYX – $1.89) said the Donahue family of Federated Hermes bought stock and now owns 19.99% of the company. 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: 2024
   Probable time of next financing: Never

Inflation MegaShift

Gold ($2,025.10) continues to trade over $2,000, even on days the US dollar strengthens because the boffins are worried the Fed might not cut rates as fast as they’d like (Pro Tip: They won’t). The fractal dimension looks like it wants to flip back into consolidation, but it’s too early to make that call. The next few weeks will tell the tale.

Miners & Related

First Majestic (AG – $4.65) said they produced 6.6 million silver equivalent (AgEq) ounces in the December quarter, up 6% from the September period, consisting of 2.6 million silver ounces and 46,585 gold ounces. Total production for the full year of 2023 consisted of 26.9 million AgEq ounces, consisting of 10.3 million silver ounces and 198,921 gold ounces.

On a conference call (AUDIO HERE), they guided for 2024 production between 21.1 to 23.5 million AgEq ounces, consisting of 8.6 million to 9.6 million ounces of silver and 150,000 to 167,000 ounces of gold. The decrease in forecasted gold production is primarily due to the temporary suspension of the Jerritt Canyon Gold Mine in Nevada announced in the first quarter of 2023. They expect cash costs of $13.69 to $14.46 per ounce, with All-In Sustaining Costs of $19.32 to $20.58 per ounce.

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 – $4.68) has several key development mines in construction today. These mines will contribute to over 60% growth in Sandstorm’s production in just a few years. One is the Greenstone Gold Mine located in Northern Ontario, Canada. Once in production, Greenstone will be one of the largest open-pit gold mines in the world.

SAND is a Buy under $10 for a $25 target.
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 – $40,956.70) is waffling after the SEC’s spot bitcoin exchange-traded fund approvals as the “sell the news” traders supply the new ETFs. In the first three days, investors have poured $1.9 billion into the 11 new exchange-traded funds, with BlackRock and Fidelity pulling in the lion’s share of the flows. BlackRock alone hit $1 billion in assets under management and held 25,067 coins this morning. With the 2024 halving coming in about three months, I think demand is just getting underway.

As Franklin Templeton says: “Bitcoin as EZ as ETF.”

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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.

The Grayscale Bitcoin Trust ETF (GBTC- $36.29) is not losing assets to lower-fee ETFs, probably because many of those who took advantage of the ridiculous discounts to net asset value would have to pay capital gains taxes to move their money. The discount has turned into extra profit, as I expected.

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Grayscale only cut their management fee from 2.0% to 1.5%, far above the 0.25% of competitors. I’m looking at the Invesco, Fidelity, and BlackRock ETFs as alternatives, but there’s no big hurry. GBTC is a Buy under net asset value.
Primary Risk:.Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.

Commodities

Oil – $74.10

Oil had a good week due to continued Houthi attacks in the Red Sea and an unexpected crude draw in the US. The preliminary crude forecast for next week shows an even large crude draw. The cold blast/freeze-off will materially impact both refinery throughput and crude production. In North Dakota, the top oil-producing state, oil output fell by 650,000 to 700,000 barrels per day because of extreme cold weather. By the week ending February 2, US commercial crude storage will be about 36 million barrels below last year.

Oil prices rose after OPEC forecast relatively strong growth in global oil demand this year and next, even though they obviously are talking their book. They expect demand growth of 2.25 million barrels per day this year, unchanged from their December forecast. Then oil demand is expected to rise by a robust 1.85 million barrels per day in 2025 to 106.21 million barrels per day.

But today the International Energy Agency agreed, lending some extra credibility. The IEA now expects oil demand to grow by 1.24 million barrels per day in 2024, up 180,000 barrels per day from its previous projection. The agency cited improved economic growth and lower crude prices in the fourth quarter.

Oh – The Wall Street Journal, may I introduce you to Bloomberg:

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The July 2026 Crude Oil Futures (CLN26.NYM – $65.71) 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 – $35.93) is a Buy under $40 for a $100+ target.

EQT (EQT – $35.21) announced another tolling agreement, this one with Texas LNG to produce 0.5 million tons a year of LNG under a 15-year tolling agreement. Texas LNG anticipates a final investment decision on their project in 2024, with first cargo deliveries expected in 2028.

The company also sold $750 million of 5.75% 10-year senior notes due in 2034. They will use the net proceeds to repay a portion of their borrowings under their term loan facility, which were used for the acquisition of Tug Hill and XcL Midstream. The term loan facility will be amended to extend its maturity date from June 30, 2025 to June 30, 2026.

The blockbuster merger of Chesapeake Energy with Southwestern Energy will create the largest natural-gas-focused producer in the US. It’s an all-stock deal that values Southwestern at $7.4 billion. The combined company’s market capitalization would be $17 billion, bigger than EQT, which currently is the largest natural-gas-focused producer.

The very cold weather – a blizzard in some places – sent US natural gas demand to a new record high.

Click for larger graphic h/t @HFI_Research

At the same time, freezing conditions sent Lower 48 gas production tumbling to an 11-month low.

Click for larger graphic h/t @HFI_Research

Higher demand + lower supply = $$$ gas.

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.

Energy Fuels (UUUU – $7.60) will make bank from the uranium boom.

Click for larger graphic h/t KEDM

The largest producer, Kazatomprom (KAP), says whoops, sorry, production problems:

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Kuppy asked: “Have we reached the stage where utilities finally step into the market? Look, there are a number of public RFPs out there where not a single producer has even responded. There’s hardly any lbs in the next few years from CCJ or KAP that aren’t spoken for. If you need lbs, you need to do venture capital and back a junior and hope the damn thing produces. The spot market has been cleansed of lbs and now the producers are missing their targets too. Imagine how scary that must be for a utility when your inventory is drawing down and no one will even pick up the phone. There’s an old saying, ‘If you’re going to panic, make sure you panic first.’ We think that someday soon, a utility will sweep the book for a few million lbs, then every other utility is going to be forced to follow.”

BofA’s metals and mining team said tightness in uranium markets could extend well into 2025. They increased their uranium spot price price targets to $105 per pound in 2024 and $115 in 2025. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.

Freeport McMoRan (FCX – $35.21) reports earnings next Wednesday. Analysts are looking for $5.87 billion in revenues, up just 2% from last year, and 23¢ earnings per share, down from 52¢ last year. Those are pretty low bars and Freeport should be able to beat both.

The consensus expects guidance for $5.62 billion in sales, up 4.2% from 2023, and a snap back in earnings to 38¢ (the March 2023 quarter also was 52¢). FCX is a buy under $44 for a $65 target within two years.
Primary Risk: Copper prices fall.

International & Other Recommendations
It is important to hold some non-US assets, especially in China. China’s nominal (including inflation) GDP growth is the lowest since 1976, excluding the Covid year of 2020. You can see what happened after 1976 through the mid-90s – the government goes all-out to stimulate the economy.

Click for larger graphic h/t The Market Ear

EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $28.98) is a Buy under $38 for a $66 target in 12 to 18 months.

KraneShares Bosera MSCI China A Share Fund (KBA – $19.26) is a Buy under $40 for a three- to five-year hold.

Morgan Stanley China A-Share Closed-End Fund (CAF – $12.28) is a Buy under $18 for a three- to five-year hold.

KraneShares CSI China Internet Exchange-Traded Fund (KWEB – $23.71) 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.

* * * * *

Pretty incredible to see Covid-like deficits being run at a time when unemployment is at secular lows and the economy is growing above potential. In the short-term this helps delay any recession incoming. Long-term it will make managing an eventual recession difficult.

Click for larger graphic h/t @BobEUnlimited

* * * * *

Your checking the REAL banned book list Editor,

Michael Murphy CFA
Founding Editor
New World Investor

All Recommendations

Priced 1/18/24. 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
  Apple Computer (AAPL – $188.63) – Buy under $150 for new iPhones
  Corning (GLW – $30.16) – Buy under $33, target price $60
  Gilead Sciences (GILD – $86.40) – Buy under $80, target price $120
  Meta (META – $376.13) – Buy under $345, target price $400
  SoftBank (SFTBY – $22.36) – Buy under $25, target price $50

Small Tech
  Enovix (ENVX – $9.60) – Buy under $20; 4-year hold to $100+
  First Trust NASDAQ Cybersecurity ETF (CIBR – $55.05) – Buy under $40; 3- to 5-year hold
  Fastly (FSLY – $17.80) – Buy under $20; 2- to 5-year hold to $80+
  PagerDuty (PD – $26.05) – Buy under $30; 2- to 5-year hold
  QuickLogic (QUIK – $13.48) – Buy under $10, target price $40
  Rocket Lab (RKLB – $4.85) – Buy under $13, target price $30+
  Velo3D (VLD – $0.29) – Buy under $6, target price $50

$20-for-$1 Biotech
  Akebia Biotherapeutics (AKBA – $1.40) – Buy under $2, target $20
  Aptose Biosciences (APTO – $2.20) – Buy under $10, ultimate target $300
  Compass Pathways (CMPS – $8.13) – Buy under $20, hold a long time for a 10x return
  Inovio (INO – $0.72) – Buy under $7, hold a long time
  Invitae (NVTA – $0.45) – Buy under $10, first target $50, then $100+
  Medicenna (MDNAF – $0.33) – Buy under $3, first target $20, then maybe $40
  ScyNexis (SCYX – $1.89) – Buy under $3, target price $20, then $50
  TG Therapeutics (TGTX – $15.14) – Buy under $12 for buyout at $30+

Inflation
  A Short-Sale or REO House – ($415,400) – Hold
  Bag of Junk Silver – ($22.88) – hold through silver bull market
  Sprott Gold Miners ETF (SGDM – $22.58) – Buy under $28, target price $50
  Sprott Junior Gold Miners ETF (SGDJ – $26.87) – Buy under $39, target price $100
  Sprott Physical Gold and Silver Trust (CEF – $18.57) – Buy under $18, target price $30
  Global X Silver Miners ETF (SIL – $25.06) – Buy under $30, target price $50
  Coeur Mining (CDE – $2.62) – Buy under $5, target price $20
  First Majestic Mining (AG – $4.65) – Buy under $11, next target price $23
  Paramount Gold Nevada (PZG – $0.37) – Buy under $1, first target price $10
  Sandstorm Gold (SAND – $4.68) – Buy under $10, target price $25
  Sprott Inc. (SII – $35.08) – Buy under $40, target price $70

Cryptocurrencies
  Bitcoin (BTC-USD – $40,956.70) – Buy
  Grayscale Bitcoin Trust (GBTC – $36.29) – Buy
  Ethereum (ETH-USD – $2,465.75) – Buy
  Grayscale Ethereum Trust (ETHE – $19.25) – Buy

Commodities
  Crude Oil Futures – July 2026 (CLN26.NYM – $65.71 – Buy under $70; $200+ target
  United States 12 Month Oil Fund, LP (USL – $35.93) – Buy under $40; $100+ target
  EQT (EQT – $35.21) – Buy under $35; $70 first target
  Energy Fuels (UUUU – $7.60) – Buy under $8; $30 target
  Freeport McMoRan (FCX – $38.21) – Buy under $44; $65 target within two years

International & Other Recommendations
  EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $28.98) – Buy under $38 for a $66 target in 12 to 18 months
  KraneShares Bosera MSCI China A Share Fund (KBA – $19.26) – Buy under $40 for a three- to five-year hold
  Morgan Stanley China A-Shares Fund (CAF – $12.28) – Buy under $18 for a three- to five-year hold
  KraneShares CSI China Internet ETF (KWEB – $23.71) – Buy under $40 for a double over the next three years
  Acreage Holdings (ACRDF – $0.20) – Buy under $2 for the Canopy Growth merger
  Mongolia Growth Group (MNGGF – $1.16) – 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 – $5.25) – 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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