Dear New World Investor:
NOTICE: No newsletter next week, as unlike days of yore nothing much happens during Thanksgiving week. The day after Thanksgiving used to be a major tell for the next market move – now it’s a nothingburger. I’ll be back on December 5, more than ready for the Santa Claus rally.
In the near term, I expect inflation to continue to slowly fall – in large part because I still think a brief, shallow recession is coming. But two years from now I think inflation will be higher as Trump tries to undo many of the policies that he believes weakened the country even as they dampened inflation. Tariffs are inflationary, at least until the Chinese move production to places like Vietnam, South India, and Mexico. Closing the border and deporting illegals will give Americans – and costs – a raise.
This chart of the 1970s inflation is circulating and probably is directionally right, although the scale is wrong already (we don’t have a 5%+ current CPI) and it won’t go nearly as high as the 1970s. I vividly recall the day in the 1970s that our fixed income specialist said every holder of US Treasurys had a capital loss. Still, in the coming environment I wouldn’t want to hold long-term bonds, as they will be certificates of confiscation.
Click for larger graphic h/t Kuppy’s Event-Driven Monitor
In the “Who’s Left To Buy?” department, after two years of negativity Morgan Stanley finally turned bullish on US stocks. They expect the recent broadening in earnings growth to continue in 2025 (which is already discounted in the market). They raised their rating on US stocks to Overweight, targeting 6500 at the end of 2025. Their new base target is above their previous bull scenario of 6350. Now they say in their bull scenario the Index could jump as high as 7400 next year.
Click for larger graphic h/t Market Watch
They said valuations are richer than they used to be, but: “Valuations should be richer than six months ago because markets have grown more certain that fundamentals are good. And valuations can be richer in six months’ time when investors see that fundamentals are sustained by solid macro. Our work shows that it’s rare to see significant multiple compression in periods of above-average earnings growth and accommodative monetary policy. We expect the recent broadening in earnings growth to continue in 2025 as the Fed cuts rates into next year and business cycle indicators continue to improve. A potential rise in corporate animal spirits post the election (as we saw following the 2016 election) could catalyze a more balanced earnings profile across the market in 2025.”
It was interesting to read their take on the Department of Government Efficiency and its leaders, Elon Musk and Vivek Ramaswamy. “While many are skeptical they will be able to actually cut spending via efficiency efforts, we think it makes sense to take a more open-minded approach given the individuals involved and the fact that this seems to be a focal point for Trump in his second term.”
The Morgan Stanley quant team examined if we are having a bit of momentum fatigue here. They pointed out that in the four years since 1999 where momentum has been up more than 20% by the middle of November, three out of those four times momentum has risen a further 10%+ by the end of the year. They said historical experience bodes well for the yearend.
I call BS – three out of four is too small a sample to mean anything. This is just some red meat for the sales force to call institutions with something positive after two years of being wrong.
Click for larger graphic h/t The Market Ear
Market Outlook
The S&P 500 climbed back to flat since last Thursday after Friday’s big dump. The Index is up 24.7% year-to-date. The Nasdaq Composite lost 0.7% and now is up 26.4% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) fell 2.7% although it recovered a little from Friday’s low after last week’s wipeout. It is up only 5.6% year-to-date. The small-cap Russell 2000 gained 1.2% as the mean reversion trade continued and is now up 16.6% in 2024.
The fractal dimension consolidated some more as the S&P recovered part of last week’s drop. There are still two to four weeks to go to get fully consolidated for the usual yearend upswing into the new year.
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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
USL United States 12 Month Oil Fund, LP – crude should rise quickly
EQT EQT –natural gas price rebound
FCX Freeport McMoRan – copper shortage
AKBA Akebia Therapeutics – Vafseo launch in January
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 $100,000
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 Atlanta Fed’s GDPNow model estimate for December quarter real GDP growth increased a tenth to +2.6% because housing starts were a bit better than expected. The Blue Chip consensus is still below +2.0%.
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Coming Events
All times below are EST, and most presentations and slides are archived on the companies’ websites so you can listen to them.
Friday, November 22
61st Anniversary of JFK’s Assassination – And we’re about to find out who did it!
Click for larger graphic
What’s your guess?
____ Lee Harvey Oswald
____ CIA
____ FBI
____ Fed/Treasury
____ Cuba
____ Russia
____ Other (tell us below)
Monday, November 25
AG – First Majestic – Through 11/26 – National Bank of Canada CEO Mining Conference, London
Tuesday, November 26
PLTR – Palantir – Before the open – Moves to Nasdaq
Short Interest – After the close
PD – PagerDuty – 5:00pm – Earnings conference call
Wednesday, November 27
Personal Consumption Expenditures Index – 8:30am – the Fed’s favorite inflation indicator
September quarter GDP – 8:30am – Second estimate
Thursday, November 28
Markets Closed for Thanksgiving
No New World Investor Issue This Week
Tuesday, December 3
AG – First Majestic – Through 12/4 – Scotiabank Mining Conference
GLW – Corning – 10:15am – UBS Global Technology and AI Conference
GILD – Gilead – 11:00am – Piper Sandler Healthcare Conference
PD – PagerDuty – 11:00am – CEO Jennifer Tejada keynotes Amazon Web Service’ re:Invent Conference
EDIT – Editas Medicine – 1:20pm – Evercore ISI HealthCONx Conference
Wednesday, December 4
PYPL – PayPal – 8:00am – Earnings conference call
FSLY – Fastly – 10:15am – UBS Global Technology and AI Conference
GILD – Gilead – 11:40am – Evercore ISI HealthCONx Conference
PYPL – PayPal – 12:15pm – UBS Global Technology Conference
Friday, December 6
November payrolls – 8:30am – Let’s all pretend they’re accurate
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 – $228.52) has started to sell Apple News ads directly, cutting out the middlemen, according to Axios. Next year they will sell premium sponsorships of editorially curated content for events like the Met Gala. The News team also is pitching banner placements and video ads, and advertisers will also be able to sponsor specific News feeds. Publishers will earn a 70% cut of the ad revenue sold by Apple within their articles. The move will help Apple widen its advertising revenue stream.
Apple News is one of the most popular news apps in North America, Canada, Australia, and the UK. Apple ad revenue worldwide is expected to reach nearly $11 billion in 2024, up from $8.9 billion in 2023. They want to accelerate growth in 2025. The expansion of advertising opportunities on the News App allows brands another avenue to tap into a highly engaged audience. There’s certainly a huge opportunity:
Click for larger graphic h/t Axios
Meanwhile, holiday sales of iPhones are off to a strong start. According to a KeyBanc survey of cellular carriers, iPhone 16 sell-through in October increased 8% year-over-year, above Wall Street expectations. AAPL is a HOLD – I expect to move back to Buy under $175 for new iPhones.
Gilead Sciences (GILD – $89.76) presented at the Jefferies London Healthcare Conference (AUDIO HERE and TRANSCRIPT HERE). The analyst said: “The good old days of Gilead are back.” CEO Dan O’Day said they’re in a unique position with a robust, growing HIV franchise, rapidly growing oncology and inflammation businesses, and very few patent expirations. The next one is in 2033.
In 2025, the Medicare Part D reform impact on their HIV business – a one-year hit to their growth rate – will be more than offset by growth in the other areas. They’ll file for approval of lenacapavir for HIV protection by the end of 2024 and launch in mid-2025. Lenacapavir is a twice-a-year injection that is essentially 100% effective. They expect the current daily oral Truvada users, of which 50% are taking the generic, to convert. In addition, women can be protected with a discreet visit to the doctor’s office instead of taking a daily pill that they might forget. GILD is a Long-Term Buy under $80 for a first target of $120.
Meta Platforms (META – $563.09) will roll out ads on Threads early next year to monetize another service. Australia introduced legislation for a social media ban for kids under 16 to block access to platforms like TikTok, Meta’s Facebook and Instagram, Snapchat, Reddit, and such. My prediction is they are about to learn how good under-16 hackers really are. META is a Hold – Buy or add at minus 2 standard deviations.
Palantir (PLTR – $61.36) joined the S&P 500 index on September 23. Jefferies wrote: “Retail ownership has decreased 7 points to 42% post the S&P 500 inclusion, while index institutional ownership has increased four points, which may reduce the retail premium going forward.”
Sorry, Jefferies, but that’s not what happens here. The index buying is added to the “retail premium.” Your recent downgrading of the stock from Hold to Underperform and cutting your target price to $28 still makes you look dumb. Palantir will begin trading as a Nasdaq-listed company this Monday, November 26. The way this ends is their revenue growth rate falters, and that is not in sight. Someday, of course – but not yet. PLTR is a Buy under $22 for a $100+ target.
PayPal Holdings (PYPL – $84.82) CEO Alex Chriss sent me and 400 million of his other close friends a nice email pointing out that: “As we all prepare for the biggest days of the retail season, I want you to know that the entire PayPal team is committed to delivering exceptional shopping experiences for you and your customers.
“Together, our checkout innovations are driving conversion with the low-friction experiences that customers expect:
* * Early results from the latest Pay with PayPal experience show an incremental 3-7% lift
* * Fastlane by PayPal, our accelerated guest checkout, drives an average 67% conversion for shoppers with Fastlane profiles
* * PayPal Pay Later increases AOV by up to 55%, giving shoppers flexibility to pay over time
* * Pay with Venmo lets 92M active consumers who love Venmo, pay with their balance
“There has never been a better time to be part of the PayPal community. I’m excited to deliver a solid holiday season for our customers and hope that you’ll take advantage of our latest checkout innovations—the smartest way for your customers to pay.”
Thank you, Alex! PYPL is a Buy under $68 for a double in three years.
Snap (SNAP – $10.63) CEO Evan Spiegel did a CNBC interview:
SNAP is a Buy under $11 for a $17+ target.
Small Tech
Fastly (FSLY – $7.61) presented at the RBC Capital Markets Global Technology, Internet, Media, and Telecommunications Conference (WEBCAST HERE and TRANSCRIPT HERE). CFO Ron Kisling said their AI Accelerator can speed up automated chatbots by over 6x while also caching and reusing common answers, thus reducing expensive inquiries to the cloud. Companies can provide better service while reducing costs.
They are seeing better than expected usage by live events, where they have a significant competitive advantage, and non-Top 10 customers offsetting price erosion at the Top 10. That price erosion should end by the end of this year as Edgio exits. In 2025, they will focus on new customer acquisition and accelerating Security growth. They expect free cash flow breakeven in 2025.
Unlike their main competitor, Akamai, all their applications run on the single Compute@Edge platform. That makes it very easy to add features and do upgrades.
For the second time, Fastly was named a Leader in the IDC MarketScape: Worldwide Edge Delivery Services 2024 Vendor Assessment. According to the IDC Worldwide Edge Spending Guide, global spending on edge computing is estimated to reach $228 billion in 2024, a 14% increase from 2023. This includes combined enterprise and service provider spending on hardware, software, professional services, and provisioned services for edge solutions. They forecast sustained strong double-digit growth through 2028, with spending expected to be near $378 billion.
Fastly’s latest annual Global Security Research Report showed a rise in the time it takes businesses to recover from cybersecurity breaches to 7.3 months – 25% longer than expected and over a month past the anticipated timeline of 5.9 months. 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.
PagerDuty (PD – $19.84) is the only recommendation reporting earnings next week. Wall Street expects revenues to be up 7.05% from last year to $116.39 million with earnings down 3¢ from last year to 17¢. That’s a low bar. For the December quarter, they expect $121.42 million in sales and earnings to be sequentially down to 16¢. That’s a very low bar. 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.
QuickLogic (QUIK – $7.52) exhibited at the Space Tech Expo Europe 2024 in Bremen, Germany. QuickLogic’s eFPGA Hard IP solutions are well-suited for the complex demands of the aerospace and space sectors. 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 – $22.41) cut costs and raised its average selling price per launch to $8.4 million in the September quarter. Customers are paying that price happily, as shown by the $55 million worth of new orders in the quarter. With Neutron probably priced at about $50 million per launch, that’s going to accelerate Rocket Lab’s revenue growth rate even more.
Analysts don’t think Rocket Lab will turn profitable before 2027, but that’s wrong. Discussing the earnings report with analysts from Payload Space last week, CEO Sir Peter Beck pointed out that the main reason the company loses money right now is because of the investment it is making in research and development on Neutron. As soon as Neutron switches from the R&D stage to the launch stage, those costs go away and the situation changes. Peter said: “The moment you start throwing customers at that, it flips.”
Does this mean that when Neutron starts launching next year, Rocket Lab’s gross profit margin in space launch will immediately flip from 11% to the 40% to 50% gross margin in their target model, potentially dropping a net profit to the bottom line? Maybe. Only time will tell. 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.
AbCellera Biologics (ABCL- $2.72) presented at both the Stifel Healthcare Conference (WEBCAST HERE) and Jefferies London Healthcare Conference (WEBCAST HERE and 11-SLIDE PRESENTATION HERE).
In the fireside chat at Stifel, management said their partnered antibodies are very diversified in terms of size of partner and drug targets. To be interested in a new partnership, they ask:
* * Do we like the science?
* * Is there a commercial opportunity coupled to an unmet medical need?
* * Is there potential for really differentiating from what others are trying to do in the field? (Ideally to be first-in-class or clearly best-in-class.)
* * Is there a clear development path from discovery through clinical development to approval?
* * Do we think this is a good partner?
* * Do the broad economics make sense? Upfront payment? Royalties? Anything else of strategic value to AbCellera?
The Jefferies Conference was an introduction to a new group of investors. They emphasized their antibody skills based on 12 years of work and $500 million spent, resulting in 100+ partners (including many from Big Pharma) and deals to date:
Click for larger graphic
And, of course, their other initiative to have an internal pipeline:
Click for larger graphic
They emphasized that, unlike so many others, they have the capital to build a pipeline of best-in-class and first-in-class drugs – $670 million in cash and $205 million in Canadian and British Columbia government funding, totaling $875 million. They’ll submit Investigational New Drug (IND) applications for their first two Phase 1 trials in the June quarter. They expect to file one to three INDs a year for the next five years. Buy ABCL up to $6 for a long-term hold to $30 or more.
Primary Risk: Partnered and owned drugs fail in the clinic.
Clinical stage of lead product: Partnered: Various Owned: Preclinical
Probable time of next FDA approval: 2027-2028
Probable time of next financing: 2026-2027 or never
Akebia Therapeutics (AKBA- $1.82) presented at the Jefferies London Healthcare Conference (highly recommended AUDIO & SLIDES HERE). CEO John Butler said they are on the verge of agreeing with the FDA on a path to expand the Vafseo label to non-dialysis chronic kidney disease patients, a market twice as large as the dialysis market where they have approval.
Click for larger graphic
Vafseo is being launched by a very experienced team led by a nephrologist who has extensive experience treating dialysis patients.
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Akebia already has 60% of the 555,000 US dialysis patients under contract, which effectively means they have to get the other one of the two big dialysis providers under contract by the end of the year.
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Getting providers under contract is necessary but not sufficient for a fast launch. Doctors must want to use it, so in parallel with the contracting effort they are working hard to get doctors on board by showing them how Vafseo meets their wish list for anemia management. 27% of surveyed nephrologists plan to use Vafseo in the March quarter.
Click for larger graphic
The initial US targets are the 80,000 people on home dialysis who now have to come into a center for an erythropoietin-stimulating agent (ESA) and the 150,000 patients on higher ESA doses. Those 150,000 are the most expensive patients for the dialysis center because the extra ESA cost is not reimbursed in the dialysis bundle payment.
Akebia has a pipeline coming after Vafseo, with two new drugs entering Phase 1 trials next year. AKB-9090 is an acute care molecule initially targeting acute kidney injury and AKB-10108 targets rare pediatric diseases.
Click for larger graphic
They have a two-year cash runway. Buy AKBA up to $2 for the vadadustat launches in the EU, UK, and US.
Primary Risk: Vadadustat doesn’t sell in the US.
Clinical stage of lead product: Approved
Probable time of next approval: NM
Probable time of next financing: Never
Compass Pathways (CMPS – $4.45) CFO Teri Loxam and Chief R&D Officer Dr. Michael Gold presented at the Stifel Healthcare conference (AUDIO & SLIDES HERE).
They now expect six-week primary endpoint data from the first Phase 3 trial of 255 patients in the June 2025 quarter. But the second, larger, Phase 3 trial of 570 patients won’t read out the six-week data until the second half of 2026. Given the “Part B” blinded data read out after 26 weeks, FDA approval would be in late 2027 or 2028. I’ve slid the date to 2028.
Click for larger graphic
They had $207 million in cash at the end of September, which will carry them into 2026. But they will need more capital to get through approval and launch. 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: 2028
Probable time of next financing: Late 2025
Editas Medicine (EDIT – $2.37) also presented at the Stifel conference (AUDIO HERE and TRANSCRIPT HERE).
CFO Erick Lucera said they remain focused on their three-pillar strategy, which was refined about two years ago when CEO Gilmore O’Neill came in from Sarepta and began the transition of Editas into an in vivo company. The first pillar is their patent estate that gives them royalties on every FDA-approved genome editing medicine by any company. There are about 100 genome editing programs underway at eight to ten companies. The Vertex deal for one drug was $50 million upfront and then $10 million to $40 million a year through patent expiration in 2033 – all non-dilutive capital. That’s a good model.
The second pillar is reni-cel, their only autologous treatment, for sickle cell disease. They believe it has potential best-in-class efficacy because it both clears hemoglobin and, by design, prevents anemia. They are seeking a partner to take it forward. Their ideal reni-cell partner would have a sales force already calling on transplant centers and available GMP manufacturing capacity.
The third pillar, where they are focused, is proprietary in vivo gene editing medicines. This is still a longshot, and I would not have recommended EDIT if they didn’t have the patent rights to gene editing. In vivo might pay off for them or might not, but we’ll be OK either way. (I believe it will pay off for somebody, so I’ve also recommended Intellia (NTLA), an in vivo-based company already in the clinic, in Biotech Moonshots.)
Editas is targeting sickle cell for their first in vivo drug. That is likely to be part of a bigger deal for reni-cell as a next-generation follow-up. They ended the September quarter with $322 million in cash including the DRI deal signed in October, a cash runway into the June 2026 quarter. EDIT is a Buy under $6 for a double in 12 months and a long-term hold to much higher prices.
Primary Risk: Other companies’ gene-sequencing drugs fail in the clinic.
Clinical stage of lead product: Partnered: Approved; Owned: Preclinical.
Probable time of next FDA approval: 2026
Probable time of next financing: 2026 or never
Medicenna (MDNAF – $1.06) reported a September second quarter loss of C$4.2 million or 5¢ Canadian per share. CEO Fahar Merchant said: “Achieving objective response rates with MDNA11 monotherapy that are comparable to those of block-buster immunotherapies, particularly in patients with advanced solid tumors that are resistant to immunotherapy, is a remarkable testimony to the potential of MDNA11 and our IL-2 Superkine platform…We look forward to sharing additional results from our programs during the next two quarters, as well as our progress with next-generation Superkines for treatment of cancer and autoimmune diseases.”
MDNA11 milestones coming in the March and June quarters include completing the monotherapy expansion and combination dose-escalation enrollment and beginning the combination expansion phase of the Phase 1/2 ABILITY-1 trial.
They ended the quarter with C$30.4 million and recently got C$1.9 million in warrant exercises, maintaining their cash runway through mid-2026. 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
Inflation MegaShift
Gold ($2,672.40) looks like it has a new floor at $2,600 as the world expects higher US inflation. Gary Savage, an expert gold trader among many other accomplishments, said gold is preparing for a B wave bounce following the post-election drop.
His read agrees with the fractal dimension – more consolidation is needed after the meteoric rise from ~$2300 to ~$2750. I don’t expect full consolidation until the March quarter if it’s through time and not price. Having said that, another big red candle or two also would do the job.
Click for larger graphic
Miners & Related
Dakota Gold (DC – $2.25) founder Robert Quartermain has now succeeded fellow founder Jonathan Awde as CEO, so he’s essentially taking full control. Dakota has control of a massive package of private land surrounding the historic Homestake Mine, with the initial targets for exploration being the Richmond Hill and Maitland projects a few miles north of the Homestake pit. Barrick Gold, which was the last owner of the Homestake Mine and controls much of the surrounding property, is also a DC shareholder and has royalties on some of the property that they’ve essentially optioned to Dakota Gold through a series of deals. DC is a Buy under $2.50 for a $6 target as gold goes higher.
Primary Risk: Robert Quartermain doesn’t find enough gold. Secondary 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 – $98,080.41) dropped below $17,000 two years ago following the collapse of crypto exchange FTX. It cleared $98,000 today after last week’s $1.67 billion surge of inflows to the exchange-traded funds. That was the sixth week in a row of positive net inflows totaling $27.46 billion. Plus, Michael Saylor’s MicroStrategy bought another $4.6 billion, his largest purchase ever, to bring his total holdings above $29 billion.
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- $55.90) options began trading with huge volume. It 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- $25.44) 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 – $70.11
Oil recaptured the $70 level as the physical market tightness began to impact the paper oil traders. It’s hard to stay bearish when, as HFI Research wrote: “Recent news flow in the oil market suggests that higher oil prices are imminent, as data consistently points to a more constructive supply/demand balance than what is implied in consensus expectation.”
The dramatically overstated supply forecasts by the International Energy Administration are believed by the paper oil market, even though their past forecasts have been way off. For example, in January 2024 they forecast additional oil production of one million barrels a day in each of the June, September, and December quarters. No wonder traders didn’t want to buy oil or even decided to short it!
The actual production increase in each of those quarters: zero. Nada. Nothing. Bupkis. Yet a quality firm like Argus Research will write: “The core drivers behind oil prices over the long term come from Econ 101: global supply and demand. According to the U.S. Energy Information Administration, there has been modest excess demand for oil in 2024: global consumption is estimated at 103.1 million barrels per day, while global production is estimated at 102.6 million barrels. But forecasts for 2025 call for supply to exceed demand, which is likely to provide a ceiling to oil prices.”
S-u-u-r-r-r-e.
The IEA currently expects Brazil’s production to grow from approximately 3.25 million barrels of oil equivalent a day (boe/d) as of September 2024 to nearly 4.0 million boe/d by the end of 2025. That’s more than 700,000 boe/d of expected growth over 15 months. But Petrobras, Brazil’s national oil company that accounts for over 85% of Brazil’s production and nearly all of its production growth, just pushed back the extent and timing of its planned production increase over the next few years. Their new five-year plan calls for production to increase from 2.8 billion boe/d today to 3.2 million boe/d by 2029. The 300,000 boe/d is nearly all of Brazil’s growth over that timeframe.
So while the IEA forecasts Brazil’s oil production to increase by 700,000 boe/d of growth over the next fifteen months, Petrobras forecasts just 300,000 boe/d of growth over the next five years. And, incidentally, Petrobras has routinely failed to meet the its annual production growth expectations due to higher-than-expected decline rates on legacy production, delayed startup of new projects, and overly optimistic internal growth forecasts that get cut and pasted each year into the IEA’s projections.
So much for supply. What about demand? Wall Street thinks Chinese oil demand is “sluggish.” But preliminary data indicate China has quietly tapped “internal” or “friendly” tanker capacity as Kpler tracks November oil imports to an all-time high – and the month isn’t over yet!
Click for larger graphic h/t @lh_barstad
The July 2026 Crude Oil Futures (CLN26.NYM – $65.91) 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 – $37.34) is a Buy under $40 for a $100+ target.
Vermilion Energy (VET – $10.84) is a Buy under $11 for a target price of $24 or more.
Primary Risk: Oil prices fall.
EQT (EQT – $46.89) moved up as US liquefied natural gas (LNG) exports to Europe are set to jump in the coming weeks after the price spread between domestic natural gas and Europe’s main gas pricing hub hit one-year highs. The price differential between US Henry Hub natural gas futures and the TTF gas trading facility in The Netherlands has widened by over 30% from the 2024 average for delivery during the coming winter. That’s signaling bumper profit potential for US exporters of LNG, who are increasing the volumes of gas flows to export facilities.
Click for larger graphic h/t Tracy Shuchart
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.
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Your learning about the unsung hero of the smartphone Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Priced 11/21/24. 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 – $47.84) – Buy under $33, target price $60
Gilead Sciences (GILD – $89.76) – Buy under $80, target price $120
Palantir (PLTR – $61.36) – Buy under $22, target price $100+
PayPal (PYPL – $84.82) – Buy under $68, target price $136
Snap (SNAP – $10.63) – Buy under $11, target price $17+
SoftBank (SFTBY – $27.90) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $9.10) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $63.21) – Buy under $60; 3- to 5-year hold
Fastly (FSLY – $7.61) – Buy under $14; 3- to 5-year hold to $80+
PagerDuty (PD – $19.84) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $7.52) – Buy under $10, target price $40
Rocket Lab (RKLB – $22.41) – Buy under $13, target price $30+
$20-for-$1 Biotech
AbCellera Biologics (ABCL – $2.72) – Buy under $6, target $30+
Akebia Biotherapeutics (AKBA – $1.82) – Buy under $2, target $20
Compass Pathways (CMPS – $4.45) – Buy under $20, hold a long time for a 10x return
Editas Medicines (EDIT – $2.37) – Buy under $6 for a double in 12 months and a long-term hold to much higher prices
Inovio (INO – $4.06) – Buy under $14, hold a long time
Medicenna (MDNAF – $1.06) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.19) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $34.55) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($30.84) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $30.06) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $37.92) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $24.73) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $36.29) – Buy under $30, target price $50
Coeur Mining (CDE – $6.63) – Buy under $5, target price $20
Dakota Gold (DC – $2.25) – Buy under $2.50, target price $6
First Majestic Mining (AG – $6.44) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.38) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.80) – Buy under $10, target price $2538.87
Sprott Inc. (SII – $44.01) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $98,080.41) – Buy
iShares Bitcoin Trust (IBIT – $55.90) – Buy
Ethereum (ETH-USD – $3,368.56) – Buy
iShares Ethereum Trust (ETHA- $25.44) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $65.91) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $37.34) – Buy under $40; $100+ target
Vermilion Energy (VET – $10.84) – Buy under $11; $24 target
Energy Fuels (UUUU – $7.06) – Buy under $8; $30 target
EQT (EQT – $46.89) – Buy under $35; $70 first target
Freeport McMoRan (FCX – $43.76) – 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 – $228.52) – Expect to move back to Buy under $175 for new iPhones
Meta (META – $563.09) – Expect to move back to Buy
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First
Lee Harvy Oswald
The CIA or the FBI.
RE JFK – definitely LBJ and associates; LBJ was set to be tossed from the 64 ticket as revelations about his corruption were set to hit the newspapers; but he lucked out. This is from Robert Caros book
Allen Dulles engineered it having been fired for the Bay of Pigs disaster
CUBA/Russia. Definitely. Canada , AKA, Justin Trudeau, was Joe Biden on steroids before Joe was a wannabe. He took in millions of immigrants (starting 9 years ago) and now the people of Canada are paying the price. The inflation rate in Canada ran up to 8 percent. Housing in Canada is worse than in the US as a result of immigrants taking up apartments and housing in Canada. A small one bedroom apartment in a reasonably good neighborhood in Toronto will set you back from $2900 to $4900 . And if think groceries are expensive here, try filling your grocery cart in Canada!! Trudeau’s approval rating are in the toilet bowl with elections just around the corner. It’s so bad now guess what JT is planning now? You guessed it , a government hand out/stimulus check. Sounds familiar? BTC 99,300, ETH 3,356, XLM up 140 percent, SMCI $29.70 SOFI $15.01. TGTX $34.35
The consequences of socialism in Canada.
Amen. To you and Jesse. And all the Oprah’s of the USA wanted that crap to continue . Note that she is currently missing since the Diddy scandal has come to light!! Also a message to Chris from 11/14 RR about SMCI. The issues SMCI has been having stems from a disgruntled ex-employee who wanted to strike back since his firing for being worthless. He called the powers that he, saying he was a whistle blower and that SMCI was cooking the books. Then they started an investigation, the auditors(previous) got wind of that and decided they didn’t want to possibly tarnish their stellar reputation and opted out. SMCI was able to get a new auditor on board in relatively short notice. Which tells me that the darkness is overstated. Just my opinion. And other investors are thinking the same because my position is now up 50 percent since .
We agree on one thing, I’ve read your posts in the past and the national debt is atrocious. It’s went up 78 times since 1960. 49 times with a republican president and 29 times with a democrat president. I was surprised. I thought it would be the other way around. percentage wise Reagan raised the debt more than any other almost tripling it from 700 million to 2.1 trillion.In hindsight I agree with hiring defense contractors to come up with laser guided missiles. His opponents called it star wars and didn’t believe it could be done. The other part of raising the debt was he wanted to give billionaires a 30% tax cut. He believed in trickle down economics.I used to too. Congress would only give him 25%. It didn’t work. 2 years later unemployment soared. Companies don’t make decisions based on wither they saved 100 million this year in taxes.They are capitalist and they should be. They build factories and hire thousands of workers to make money. Back to the debt Clinton was the only President in 60 years to have a surplus for 1 year on the budget. Of the 35 trillion we have Trump to thank for 7.8 trillion, the most debt by by any 4 year term President. I was astounded when he cut corporate tax from 35% to 21% . He wants to cut taxes more especially for billionaires. We don.t need to cut taxes. We need to raise taxes.We need to pay our own way. We don.t need to leave it to the next generation, our kids or grandkids. .39 cents of every dollar we pay in taxes is for the interest on the debt. What happens when the debt rises or the interest recalibrates to market value.I know I won’t change your mind or half America but when was the last time America voted for a felon, accused by 26 women of sexual assault and filed bankruptcy 6 times. I guess I’m one of the Oprah’s. God help us, were going to need it. We do agree on one thing, the atrocious national debt.
I appreciate and respect your different opinions. Yes, the government leaders all have their part of the stupid debt we find ourselves in. Both Democrats and republicans . I also liked Clinton . Greatest surplus ever. My question is why can’t the rest of them do the same? And why do we have term limits ? We could have put Clinton in there 2, 3, to 4 more terms and had the same surplus for 16 years!! As for all the changes you mentioned against Trump , thanks to all the lies from the liberal media , no one was buying any of that crap. It was just more of the same political horseshit from the democrat elite leadership. Harris was right about one thing we need change. We need to change from the lawlessness policies of the George Soros elected DA’s, we need to change from the unbridled immigration crisis (even with all the illegal immigrants who have come here that only represents about 1 percent of the worldwide population of poor and vulnerable people). Are we taxpayers supposed to take them all in? At some point we just need to say , we are sorry but we can’t take any more. We have millions of our own people here who need the help more than they do. Thanks to the missteps of all the red ink presidents who came before, financially because of the outrageous debt we can’t do it anymore.
You are missing the growth acceleration caused by lowering taxes and regulations. Private companies with entrepreneurial vision make investments with better payoffs than govt entities making investments with money stolen from taxpayers. Do you trust anyone on the street who tells you he is smarter than you and therefore justifies holding you up at gunpoint to hand over your wallet so your money will make greater returns in his hands rather than your own? In essence, the govt is the thief on the grand scale.
Reagan had to clean up the inflationary mess of the late 1970’s under Carter. It took time to grow the economy from giving private companies more freedom while the debt surged. But Reagan unleashed rapid growth which increased tax receipts from higher economic output and productivity, not from raising tax rates. This lowered the debt/GDP ratio, which benefitted every future govt whether Dem or Rep, especially Clinton.
The convicted felon label of Trump is only from a corrupt banana republic justice system under Biden. Pam Bondi, the new AG will expose them for what they are. Listen to Alan Dershowitz, one of the few lawyer Dem’s who knows what he is talking about.
To set the record straight, I had no comment on your SMCI post.
It is good to see so many divergent theories about JFK’s death. Americans are the perfect subjects for disinformation campaigns because apparently we will believe anything these days. Investing for the Trump administration will be tricky. Tariffs will raise prices for consumers of any goods using inputs from other countries, especially China and will squeeze profits for those selling those goods. Tariffs also facilitate crony capitalism as the executive can grant waivers to any person or business he prefers. I also see unemployment rising and do not believe our farm labor can be replaced by American workers. Good luck to us all.
I see the tariff situation a little differently. I believe Trump uses the threat of them as leverage to get what he wants. If/when a country doesn’t comply, then he will actually implement the tariff until they do. It hurts them as much, if not more than the US and has proven to be very effective.
Exactly, that’s what happened last time. Mexico said the same thing two weeks before the tariffs were to take effect. Then just before it happened they changed their minds and were much more cooperative with his efforts to stem the tide in the immigrant invasions. Now China is trying to steal our top engineers in the tech world by offering them a salary that’s 3 times the amount they are getting paid now!
Right on tariffs. As for engineer traitors who go to work for our enemy China, giving them US intellectual property, I would revoke their US citizenship and let them see how they like living under CCP dictatorship with their triple salary. Let them see how long the extra money brings them happiness until they realize they are working for murderers. Then they can gratefully get in line to re-apply for legal US citizenship.
Evil thumbs down poster. Relocate to China and see how you like it. Then get back in line while you beg to return to the US.
I seriously doubt any of those people at Intel will jump ship especially for China. They have worked for Intel for decades and are extremely loyal. I can’t say that for the rest of the tech world. But you bring up a good point. Who wants to take the risk of moving to China or even working for China remotely with all the media coverage of this their darker side?
My bad, That was intended for Steve. My apologies.
To the thumbs downer–the Canadian socialist horrors are coming to a theater near you if Dems regain their tyranny. How many stabs in the back will you endure before you learn?
Excellent Post, answers many questions about what the Democrat Impoverishment Party did to America.
Good for you.
Those interested in dividends and LNG should check out FLNG
what is LNG ? see FLNG is around $ 26 – divedends and good potential if drill baby drill is executed – makes it sound good – would appreciate any suggestions and enlighhtment …
Interesting! 10 full-time employees. Be sure to check new LNG ship deliveries to competitors over the next few years.
My stake in TGTX has just passed half a million dollars, over $400,000 of that is profit. I expect much more after the buyout. Thank you MM for this life changing recommendation.
I believe the Treasury/Federal Reserve were involved in the JFK assassination, along with the Italian Mafia, and others.
JFK committed the cardinal sin against the deep state that few ever talk about.
He went around the Federal Reserve and issued US Notes (with the red stamp on the currency bills to distinguish them from Federal Reserve Notes), so he didn’t need the Fed to borrow (create) money (debt).
This was an unforgivable sin and he had to be eliminated. The mafia was brought in to help with the deed. The mafia was more than happy to help because JFK’s Attorney General RFK was putting pressure on the mafia infiltrated unions, like The Teamsters and Jimmy Hoffa, who was up to his ears in bed with the mafia.
Oswald was just what he said he was, a Patsy. Mafia accomplice Jack Ruby was ordered by the Boss Sam Giancana to take out Oswald because he knew too much and he might talk. A nice tidy clean up. Nobody stood trial . The Warren Commission had to know the facts. Many witnesses heard a shot from the grassy knoll, because there was a shooter there, that fired the final head shot. The single bullet theory is preposterous.
Remember when Donald Trump at a rally implied that he and Gaetz “had a secret.” The nomination of Matt Gaetz was absurd. Trump knew that he would never get confirmed. His reason was to smoke out the RINOs so he would know which Republicans not to trust to support him. He found this out. He is making up for the mistake in his first term of trusting many of the wrong people.
Once Trump had this information, Gaetz quickly stepped down from the nomination fir AG. Trump now nominated the person he wanted all along for AG.
As for Gaetz, what does he get for playing ball and resigning from the House? DeSantis appoints him to Marco Rubio’s Senate seat. Voila! Checkmate.
Nice to hear how well you are doing with tgtx,i in turn went into nvta with the same expectation but..it turned out to be a life changing event that went thee opposite way.
Go for AKBA now, before Jan 1. I expect it to pay for my big loss in VLD many times over. On Stocktwits, follow hsainu. Also, buythehornz, who has a $2.5 million position with his company.
Thank you and yes I have been able to accumulate a few shares of akba in hopes of a win,happy Thanksgiving to you and your family
Duane, thanks for the education. It all makes sense about JFK and Trump/Gaetz. So both JFK and Trump believed that the govt can’t be trusted. The mainstream media then and now won’t tell the truth. Take note, StephKam and all followers of the leftwing media. I didn’t know that JFK supported sound money.
Nice going about TGTX. I am holding my shares for much higher prices, but am not buying more at these prices. Today I added to my AKBA position, believing that it offers much more upside than TGTX. GSK withdrew Daprodustat from the US effective 12/19/24. The FDA announced this on 11/19/24. So Vafseo will have a monopoly in the US for Vafseo as an innovative HIF treatment to become the standard of care for anemia in dialysis patients. On Stocktwits, poster hsainu has a target of $30 in 1 year, and $100 later if Vafseo is approved for non dialysis patients. AKBA will do another trial for this under FDA guidance soon.
SMCI @$38.41 up $5.26. A double in 6 business days. From Thanksgiving to the end of the year the S&P 500 has climbed 71 percent of the time in our history. (Bank of America-Stephen Suttmeir)
Congrats John. I hope for your sake it continues to go up.
Thanks Rick. My thinking is it will. Also, Intel got 7.865 billion in the Chip Act funding today. (In addition to the $3 billion contract from the military) .
Shares of SpaceX competitor Rocket Lab USA (RKLB) climbed to a record high Monday as the space satellite services provider announced two successful launches and finalized a multimillion-dollar grant from the government.
Rocket Lab said its “Ice AIS Baby” mission blasted off from its New Zealand launch site on Monday and deployed five satellites in low-earth orbit for Kineis, a France-based internet of things (IoT) constellation operator. That happened less than 22 hours after the company sent up a rocket from its Virginia complex.
Founder and CEO Peter Beck said launching two missions in such a short period of time showed the company’s “unprecedented capability in the small launch market.” The company has had a total of 56 successful space missions since its inception.
Along with the launches, Rocket Lab reported it closed on a $23.9 million award from the Department of Commerce under the CHIPS and Science Act of 2022. The money is to be used to increase its compound semiconductor manufacturing capability and capacity at its Albuquerque, New Mexico plant.
Rocket Lab shares jumped after the opening bell Monday before paring back some gains later in the the session. They were up about 3% at $23.94 in intraday trading and have more than quadrupled in value since the start of the year.
Does anyone have any good recommendations in quantum computing? Are there specific companies with an edge or is it better to play the whole field with an ETF (QTUM)?
Good question StephKam, hope someone replys. MM?
Add to calendar:
Tuesday, December 3
ABCL – AbCellera – 2:30pm – Piper Sandler Healthcare Conference
I’m thinking of loading up with Sand stock. Buy under $10 for a target of $2538.81. Too good to pass up. What’s the target time?