Dear New World Investor:
Due to the lack of news, the holidays, and a daughter home from college for an all-too-brief visit, I’m going to do my annual holiday skip of next week’s issue and be back on January 4 for a much better 2024.
The markets are about to extend what is now the longest string of weekly gains since 2017. This has been one of the biggest Christmas rallies in history. On January 3, 2022, the S&P 500 hit a record high closing level of 4796.56, just 50 points away from today’s close. We could see a new record before the end of 2023. I think we’ll go over 5000 in 2024, but probably not much over.
The fourth year of the Presidential cycle usually is marked by high-level churning as the third-year gains are locked in and the usual political acrimony plays out. Bulls will point to the transition from interest rate increases to cuts, arguing that This Stock Market Indicator Has Been 83% Accurate Since 1984. It’s Signaling a Big Move in the S&P 500 Right Now. Bears also will point to the transition from interest rate increases to cuts, arguing that This Indicator Has Predicted Every Bear Market for 40 Years and Could Hint Where the S&P 500 Goes in 2024. Both of those articles were published today by Motley Fool!
This rally has been driven by retail investors. Last Friday, after the Fed pivot, the biggest S&P 500 exchange-traded fund, the SPDR S&P 500 ETF Trust (SPY), had its biggest single-day inflow since its inception in 1993 – $20.8 billion. Total inflows last week alone hit $24 billion, also posting a new record. Monday, SPY saw ANOTHER $10 billion of inflows, putting the total at nearly $35 billion since Friday, December 8. That’s $35 billion in 6 trading days, or $5.8 billion PER DAY. Santa Claus Rally is an understatement.
Click for larger graphic h/t @KobeissiLetter
Of course, that means retail investors already are all-in…something the contrarian in me does not want to see. The CNN Fear & Greed Index hit its highest Greed level since July 26.
Click for larger graphic h/t CNN
And the American Association of Individual Investors sentiment survey shows the ratio of bulls to bears has risen to levels associated with stock market reversals.
Click for larger graphic h/t @themarketear
So, who’s left to buy? Well, as it turns out, the hedge funds have been way too bearish and the least net-long since 2011. Perhaps they were listening to legendary investor Jeremy Grantham last January 24:
Click for larger graphic
This is the worst month for long/short hedge funds since January 2021 and the second worst month in 12 years. The Commodity Trading Advisers were too bearish at the start of November, when the S&P was at five-month lows and the prevailing mood in the Wall Street momentum-chasing echo chamber was apocalyptic, and they’ve been scrambling to get long. The institutions are making their annual pension and 401-K contributions over the next couple of weeks, and a chunk of that goes straight into S&P index funds.
Right now, there is $5 trillion in short-term cash in rolling US Treasury bills that can extend in duration and take more risk. It is very hard to predict when, because it’s animal spirits, and predicting animal spirits is not an easy game. But the moment this happens, you will see a tidal wave of money into longer-duration fixed income, mortgages, munis, and stocks. Added together, there is $7 to $10 trillion in potential buying power to kick off the new year.
The S&P 500 bounced back today from its worst day since September to add 0.6% since last Thursday and closed today 1% under the all-time closing high. It has risen 3.9% this month, and is up 23.6% year-to-date. If the S&P 500 goes on to record an eight-week winning streak this Friday, it would be the 20th time since 1950 and the first since November 2017. Following all prior eight-week winning streaks, in the following six weeks the Index closed higher the last 17 times in a row. (h/t @SJD10304)
The Nasdaq Composite gained 1.4% after snapping a nine-day winning streak yesterday and is up 43.0% for the year, on pace for its best year since 2020. The SPDR S&P Biotech Exchange-Traded Fund (XBI) slipped 1.3% as the new biotech bull market took a breather. It is up 2.0% year-to-date. The small-cap Russell 2000 added 1.6% and now is up 14.5% in 2023. The long/short ratio across the Russell has crashed to new lows, despite Russell’s brutal squeeze. More pain for the shorts ahead!
Click for larger graphic h/t @themarketear</i>
The fractal dimension remains in full-on rally mode, with three to six weeks to go. The last rally did end with the fractals only in the low 40s – they never made it to 30. So we’ll watch that.
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 is up to +2.7% thanks to an increase in expected private domestic investment growth. The Blue Chip economists still are too low and even headed in the wrong direction.
Click for larger graphic
Coming Events
All times below are ET, and most presentations and slides are archived on the companies’ websites so you can listen to them.
Friday, December 22
Personal Consumption Expenditures Index – 8:30am
Monday, December 25
Markets closed – Merry Christmas!
Wednesday, December 27
Short Interest – After the close
Monday, January 1
Markets closed – Happy New Year!
Friday, January 5
December payrolls – 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 – $194.68) is ramping up production of the $3,500 Vision Pro mixed-reality headset for a launch by February, according to Bloomberg. They said production of the new headset is at full speed at facilities in China and has been for several weeks. The company sent an email to software developers on Wednesday encouraging them to “get ready” for the Vision Pro. As you know, I think it will sell out immediately, surprising Wall Street.
Apple, the most highly-valued US company, first closed with a market value above $2 trillion on August 20, 2020. 719 trading days later on June 30, 2023, the stock hit a market cap of $3 trillion and passed $3 trillion again on December 5. Now Wedbush says Apple could hit the $4 trillion mark in 2024.
“Could?” Sure. “Likely?” Nope. As bullish as I am on Apple and the Vision Pro, a churning 2024 is not likely to support a move to $4 trillion. And as soon as Wall Street thinks such a move is possible, they’ll take the stock down with a barrage of negative rumors so they can get in cheaply. That’s when I’ll raise the buy limit.
Apple has paused sales of the Apple Watch Series 9 and Apple Watch Ultra 2 due to a patent infringement dispute with medical technology firm Masimo over the blood oxygen sensor. This is no big deal and either Apple will make software changes or it will be settled out of court. AAPL is a Buy under $150 for new iPhone rollouts and augmented/virtual reality products.
Gilead Sciences (GILD – $78.93) signed a potentially big deal with Israel-based Compugen (CGEN), a clinical-stage cancer immunotherapy pioneer in computational target discovery. Gilead exclusively licensed Compugen’s pre-clinical COM503, a potential first-in-class, high affinity antibody that blocks the interaction between IL-18 binding protein and IL-18, thereby releasing natural IL-18 in the tumor microenvironment and inhibiting cancer growth.
Gilead paid $60 million upfront with a $30 million “near-term” milestone payment and a total deal value up to a whopping $848 million plus royalties. That’s what a pre-Phase 1 development-stage biotech can be worth!
Barron’s wrote: Gilead Stock Could Finally Have a Breakout Year. Here’s Why. They said: “…Biktarvy, its HIV treatment launched in 2018, should hit almost $14 billion in 2027, up from just under $12 billion this year. Plus, the company is moving past recent increases in research-and-development costs, so margins should increase and earnings per share should grow at about 6% annually for the next couple of years to $7.60 in 2025…
“What’s more, Gilead has a rich pipeline of oncology drugs with data due next year. Gilead saw just over $1 billion in total Trodelvy sales this year for the treatment of breast cancer. Trodelvy is now being tested for use in treating lung cancer, with results due in 2024…
“As investors wait for these results to come through, there’s little reason to worry about the downside. At 11 times expected earnings per share, the stock is 31% cheaper than the equal-weighted S&P 500, a discount that has steepened in the past few months, according to FactSet. The multiple can occasionally move close to in line with the index’s 16 times, but it hasn’t dipped much below 10 times in the past few years.
“And even if the company doesn’t significantly boost profits, the dividend still looks attractive. Analysts expect dividends per share to come in at $3.19 for 2024, for a roughly 4% yield, a touch above the 10-year Treasury’s 3.8% yield.” GILD is a Long-Term Buy under $80 for a first target of $120.
Meta Platforms (META – $354.09) published a post by Andrew Bosworth, Chief Technology Officer and Head of Reality Labs: Living in the Future. He said Meta’s two long-term bets on technologies of the future — AI and the metaverse — each took major steps forward in 2023 and, more importantly, began to intersect. Generative AI is making its way into the heart of the world’s most popular apps and mixed reality is now at the core of a mass market headset.
True, but…”mass market headset” is corporate speak for “low-end versus Apple’s Reality Pro,” and Zuckerberg must know that as component costs fall, high-end products get cheap enough that they become the low-end competitor. I’ll bet Meta is going hammer and tongs on spatial computing and they need to get there…soon.
Andrew also wrote: “Mixed reality and spatial computing represent another path forward. These aren’t simply incremental improvements on the personal computing paradigm that has dominated for the last 50 years. They represent a fundamental shift that’s just beginning to come into focus. Making these new technologies available to as many people as possible has been a top priority for Reality Labs for many years now…
“…at Reality Labs, our researchers are pushing ahead on some of the most promising technologies that will make the next computing platform possible. Over the years this research has led to breakthroughs like the pancake lenses on Quest Pro and Quest 3 and the amazing Codec Avatars prototype that Mark Zuckerberg and Lex Fridman tried out this year. That’s just the tip of the iceberg, and Reality Labs’ research breakthroughs will enable us to release a string of industry-first products over the coming years.”
That’s what we’re invested for. META is a Buy under $150 for a $400 target in 2024.
Small Tech
Rocket Lab USA (RKLB – $4.43) successfully launched its 42nd Electron rocket deployed a satellite for Japan-based Earth imaging company the Institute for Q-shu Pioneers of Space. The mission was their 10th Electron launch for the year, beating their previous annual record of nine launches in 2022. For the fifth year in a row, Electron retained the title of second most frequently launched US rocket. 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 – $0.49) will need to raise money early next year. As I wrote on the Comments board:
“I read VLD’s last 10-Q easily. It’s not incomprehensible. It’s a simple sales-and-service business. Try it for yourself:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1825079/000182507923000044/velo-20230930.htm”
and
“This 10-Q INCLUDES the effects of the $200,000 revenue adjustment. The company finished the quarter with $71.5 million in cash. They used about $56 million in the quarter so they will need to raise money. Again, the whole story is revenue growth.”
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 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.
Compass Pathways (CMPS – $8.02) said that an initial data readout showed that investigational COMP360 psilocybin treatment was well-tolerated in a Phase 2 clinical trial of people living with post-traumatic stress disorder (PTSD). This is the first study reporting on the feasibility of psilocybin as a potential treatment for PTSD. Participants are being monitored for a 12-week period post-dosing. Safety and efficacy data over that period are expected to be announced in spring 2024. 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
Inflation MegaShift
Gold ($2,057.80) has a new solid support level at $2,000, and maybe at $2,020. The fractal dimension ticked below 55, marking a new trend underway. But a look back to mid-2021 shows a couple of times the fractals got to around 50 and then reversed direction – false signals. So while I’m willing to call this a real uptrend, I’d really like to see it extend enough to send the fractals decisively towards 30.
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 – $43,774.28) is closing out the year solidly above $40,000. Before the next halving date, estimated as April 17, 2024, I think it could hit $100,000. After each halving it has 10x’d its previous range. The top target was $10,000 after the 2016 halving, and is $100,000 after the 2020 halving. If this holds, we’re looking at $1 million by 2028.
Click for larger graphic
BTC-USD, ETH-USD, GBTC, and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Grayscale Bitcoin Trust (GBTC- $36.29) discount to net asset value has narrowed to 7.5%. The move from a 40% discount to today was free money. I still think it’s the best way to take advantage of the upcoming spot exchange-traded funds, but obviously the advantage of holding GBTC over your own bitcoin in a hardware wallet has diminished. GBTC is a Buy under net asset value.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Oil – $73.99
Oil ended a six-day winning streak today as worries about overproduction returned after the Energy Information Administration reported a 2.9 million barrel increase in crude inventories compared to the expected 2.5 million decline. US oil production over the past four weeks has averaged ~13.011 million barrels a day with a slight fall to ~12.8 million barrels a day expected in the March quarter. US oil production is expected to peak after 2025.
Click for larger graphic h/t @HFI_Research
OPEC exports are down in the month of December about one million barrels a day from November. Saudi Arabia is averaging just below ~5.7 million barrels a day so far this month, down ~500,000 barrels a day from November. Today’s news that Angola, Africa’s second biggest oil producer, is quitting OPEC after 16 years because they don’t accept their recent quota cut is a small negative for oil prices. Angola’s 1.2 million barrels a day of production represents only about 2% of the total output of OPEC+. The country has been battling to turn around declining production for nearly 10 years.
Angola walked out of an OPEC meeting in June, but eventually agreed — along with Nigeria and the Republic of Congo — for its production baseline to be reviewed by an independent third party. Following that review, all three countries’ baselines for 2024 were lowered at the last OPEC meeting in November, yet the United Arab Emirates was allowed to increase its baseline for 2024. Angola’s President João Manuel Gonçalves Lourenço was miffed.
Far more seriously, Red Sea shipping remains a dicey proposition as Houthi attacks intensify. Red Sea routes account for about 8% of global oil trade. Shippers will divert vessels away from the Red Sea and go around Africa, but that burns a lot more – guess what?
Tonnage levels entering the Gulf of Aden already are down 70% as shipping responds to the Red Sea attacks. The US just announced that it will lead an international coalition of 10 navies against Yemen’s Iran-backed Houthis. Then Mohammed Abdul Sallam, the senior Houthi negotiator, promised to strike at US-led Red Sea maritime troops if they sought to prevent the militia from implementing its embargo on all Israel-bound ships. It looks like the Houthis have chosen to have other people raise their sons and daughters. The U.S. Navy is coming…
Click for larger graphic
The must-follow HFI Research wrote Speculators Gone Wild:
“Sentiment has now reached its lowest level in recent history, as measured by net speculative length. Traders are now more bearish than during the Covid lockdowns that resulted in the biggest demand shock in history, and the paper market is now only net long 12 hours of oil demand! Commodities bottom when sentiment bottoms…”
Net length in barrels and dollars:
Click for larger graphic h/t @HFI_Research
The managed money short percentage now is at the highest level since the initial Covid lockdowns. Combine the Red Sea headline risk with speculators HEAVY on the short side and the Fed pause/pivot and you get a very attractive long set-up.
Click for larger graphic h/t @WarrenPies
@HFI_Research again:
“Speculators have so far been winning the sentiment battle this year. Supply-side surprises from Iran and the US have led to persistent weakness in the physical balance. Without the large inventory draws, the tailwind is absent to sway sentiment meaningfully in one direction. But with speculators positioning back to the lows, you don’t need a lot to go right before prices meaningfully jump higher.
“We believe tighter compliance from OPEC+ will easily swing balances in Q1 and as a result, the market will be surprised to see the lack of builds. While the physical market remains weak for now, crude tightness will return, and inventories will draw. This should once again help the bulls.
“We all know how the story ends. Speculators are winning for now, but oil is a physical commodity. At the end of the day, balances will win, and speculators will reverse their peak bearish positioning. We believe oil has found its bottom here.”
The refining crack spreads – the difference between the price of a barrel of crude and the price of its refined components – has increased enough to support a move in crude into low $80s. If speculator positioning reverses just a touch, we should get there before yearend.
The July 2026 Crude Oil Futures (CLN26.NYM – $67.70) are a Buy under $70 for a $200+ target. Only buy futures for all cash; do not use margin.
The United States 12 Month Oil Fund, LP (USL – $36.28) is a Buy under $40 for a $100+ target.
Energy Fuels (UUUU – $7.57) rose 8.8% today after China banned the export of technology for extracting and separating rare-earth metals as well as technology to prepare some rare earth magnets. Energy Fuels already has technology to do that. More important, this probably is part of an ongoing squeeze on US and European companies that need these metals, which are used in electric vehicles, wind turbines, electronics, and many other products.
The US, Japan, and France all have separation technology, but China has the highest efficiency technology and a cost advantage. Currently, China separates 99.9% of global heavy rare earths, such as dysprosium, which is used in permanent magnet motors for EVs. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.
Freeport McMoRan (FCX – $42.23) declared a 15¢ dividend payable February 1 to shareholders of record as of January 12. Half is their base dividend and half is variable.
Robert Friedland, the highly respected founder and executive co-chairman of Ivanhoe Mines, says copper prices need to hit about $7.50 a pound in order to stimulate the industry into building costly new mines. In that scenario, Freeport would be close to $100 a share. FCX is a buy under $44 for a $65 target within two years.
Primary Risk: Copper prices fall.
* * * * *
* * * * *
Your realizing there’s no evidence that higher CO2 levels cause global warming Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Priced 12/21/23. Check out the complete Portfolio page HERE.
Buys
These are the stocks everyone needs to own because transformative events are happening over the next year or two, and I expect to hold them long-term.
Tech Dominators
Apple Computer (AAPL – $194.68) – Buy under $150 for new iPhones
Corning (GLW – $30.18) – Buy under $33, target price $60
Gilead Sciences (GILD – $78.93) – Buy under $80, target price $120
Meta (META – $354.09) – Buy under $150, target price $400
SoftBank (SFTBY – $21.35) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $13.85) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $53.96) – Buy under $40; 3- to 5-year hold
Fastly (FSLY – $18.34) – Buy under $20; 2- to 5-year hold to $80+
PagerDuty (PD – $23.88) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $13.54) – Buy under $10, target price $40
Rocket Lab (RKLB – $4.43) – Buy under $13, target price $30+
Velo3D (VLD – $0.49) – Buy under $6, target price $50
$20-for-$1 Biotech
Akebia Biotherapeutics (AKBA – $1.20) – Buy under $2, target $20
Aptose Biosciences (APTO – $2.26) – Buy under $10, ultimate target $300
Compass Pathways (CMPS – $8.02) – Buy under $20, hold a long time for a 10x return
Inovio (INO – $0.41) – Buy under $7, hold a long time
Invitae (NVTA – $0.64) – Buy under $10, first target $50, then $100+
Medicenna (MDNAF – $0.31) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.87) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $17.15) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($24.77) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $25.34) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $29.80) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $19.15) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $28.78) – Buy under $30, target price $50
Coeur Mining (CDE – $3.54) – Buy under $5, target price $20
First Majestic Mining (AG – $6.32) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.36) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.06) – Buy under $10, target price $25
Sprott Inc. (SII – $33.34) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $43,774.28) – Buy
Grayscale Bitcoin Trust (GBTC – $36.29) – Buy
Ethereum (ETH-USD – $2,239.50) – Buy
Grayscale Ethereum Trust (ETHE – $18.56) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $67.70) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $36.28) – Buy under $40; $100+ target
EQT (EQT – $39.02) – Buy under $35; $70 first target
Energy Fuels (UUUU – $7.57) – Buy under $8; $30 target
Freeport McMoRan (FCX – $42.23) – Buy under $44; $65 target within two years
International & Other Recommendations
EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $31.35) – Buy under $38 for a $66 target in 12 to 18 months
KraneShares Bosera MSCI China A Share Fund (KBA – $20.09) – Buy under $40 for a three- to five-year hold
Morgan Stanley China A-Shares Fund (CAF – $12.14) – Buy under $18 for a three- to five-year hold
KraneShares CSI China Internet ETF (KWEB – $26.96) – Buy under $40 for a double over the next three years
Acreage Holdings (ACRDF – $0.19) – Buy under $2 for the Canopy Growth merger
Mongolia Growth Group (MNGGF – $1.01) – 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 – $7.75) – Hold for buyout
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First
Merry Christmas!
Merry Christmas!
JGMD
Reply to Steve
December 19, 2023 9:11 am
AKBA is due for FDA approval in March 2024. MM implied that the FDA told them how to dot their I’s and cross their T’s for their resubmission. But why did MM drop AKBA from his top 5 list of near term movers? I am getting a little nervous, although it might start moving up in Feb.
MM?
1
Reply
Michael Murphy
Author
Reply to JGMD
December 20, 2023 7:53 pm
It’s not likely to take a big jump until the Add-On payment is approved in September. But little risk until then.
0
Reply
MM, it would be much appreciated if you’d spend a little time reviewing this one. It seems to be getting close but I’m really not sure what to expect and when. I was under the impression that this spring would be significant, but now I’m hearing September? I have no idea what an add on payment is. Please do a review on AKBA.
Yes. MM–what is your target for late March when the anemia drug likely gets approved. Target for Sept, also, please. Some posters on YMB say that since AKBA is a poor marketer as evidenced by Auryxia, they better have sales ready to go immediately after approval, or else the stock will decline after March. Please evaluate.
I don’t know if anyone bought ARDX when I mentioned it several months ago, but I have done very well with it this year. They had a very similar situation with the FDA screwing them over, but recently got approval. I have bought this around $1 and $3 and it’s currently over $6.
I hope the US Navy just kicks the Hootie’s bootie! Why we haven’t hit them before this is mine numbing. They have already captured a ship from Japan and one from China. Yet neither one of them has done anything in response. If they are allowed to shut down international shipping in this critical sea lane the world’s economic outlook is in grave territory. AKA runaway inflation. Each trip around the cape will add 7 to 14 days to the transit time and each vessel will incur millions of additional expenses in extra fuel and labor to deliver the same goods. And fossil fuel is no exception. Together with the production cuts from Russia and the Saudi government that’s a crisis waiting to happen. That’s exactly what they hope to accomplish. We are now in a turning point where we will be forced to act. IMO. And the options are all ugly.
I hope the US Navy just kicks the Hootie’s bootie! Why we haven’t hit them before this is mind numbing. They have already captured a ship from Japan and one from China. Yet neither one of them has done anything in response. If they are allowed to shut down international shipping in this critical sea lane the world’s economic outlook is in grave territory. AKA runaway inflation. Each trip around the cape will add 7 to 14 days to the transit time and each vessel will incur millions of additional expenses in extra fuel and labor to deliver the same goods. And fossil fuel is no exception. Together with the production cuts from Russia and the Saudi government that’s a crisis waiting to happen. That’s exactly what they hope to accomplish. We are now in a turning point where we will be forced to act. IMO. And the options are all ugly.
MERRY CHRISTMAS
TO ALL
MM – happy holidays, enjoy the time with your daughter. Question – is it accurate to say that GBTC will move in correlation with bitcoin, meaning the same percentages up from current price? If so, then isn’t it still advantageous to own GBTC over BTC for many reasons such as ease of buying and selling like an equity thus more liquidity, no need for a cold storage wallet or a crypto account that are more prone to hacking and other risks (lose your keys, etc)? I’m curious what the advantage of owning BTC over GBTC actually is if any?
Happy Holidays to all! And to MM, enjoy the father time with your daughter.
Found this podcast between a lady who represents an SCI organization and a lady engaged in conducting the NervGen trial:
https://open.spotify.com/episode/7DtcTYszUVxzpMbpYBYzc1?si=UzJm3a9-QFGbjxsbL1aGPA
At 42:12 : , the hostess says, “Another one of our families who has been involved, they don’t know if they have the placebo or the real peptide or not, but they’ve just been thrilled by the hour that they’ve had everyday at the Shirlrley Ryan by the assessments, what they’ve learned about their son’s body AND they believe there has already been improvement and it was only days then and now weeks (LAUGHTER)
The lady involved with the trial: We don’t know who has the placebo and who has the peptide but obviously there’s speculation when we see individuals making gains. Is it the placebo effect? Is it the drug?
I can’t imagine the placebo effect working in anyone with chronic SCI, so I bought more today.
If anyone knows of research as to the effectiveness of a placebo in chronic SCI, please share. Steve, this could be your 3-bagger in 3 months.
There are anecdotal cases of hysterical paralysis, with improvement after psychiatric management. This improvement is an example of a placebo effect, which is very real. Usually, SCI has been clearly confirmed with objective evidence of neurological impairment, like CT, MRI imaging, nerve conduction tests. An astute clinician can differentiate between true neurological findings and faking.
Another common situation is chronic pain from an organic cause, such as arthritis, neuropathy from diabetes. Antidepressants sometimes give some relief. Pain is generated from the local pathology which is transmitted to the brain, so the antidepressant which works at the brain level can partially help.
In this NervGen trial, is there any hint in the interview of objective signs of improvement, not just subjective pain or other symptoms? I can’t get Spotify on my present computer.
I finally heard the podcast this AM, and agree with your impressions. Too bad there was no graceful way to buy today at a reasonable price. The rumor is probably true, but someone on YMB said that the market cap of $100 million is too high for this early human stage trial. The drug could be worth $ billions, and they will have to raise lots of money for extensive trials. They can’t just depend on grant money, or can they? How much dilution do you foresee? Suppose even that the rumor is true, and that patient got the real drug. That would be only one data point, and we want to see much better improvements overall compared to placebo. I happen to agree with you that placebo is likely to show no improvements. Is the good rumor commensurate with the 40% jump since it was publicized?
Rocket Lab shot up 22.8% today after they won a US government contract from an unnamed customer worth up to $515 million. The contract has a base value of $489 million, with incentives and options totaling $26 million, to design, manufacture, deliver, and operate 18 “space vehicles” – probably satellites. Work will begin immediately, with the deliveries for launch starting in 2027. The deal also includes agreements to operate the satellites through 2030, with an option to operate them through 2033.
Rocket Lab is establishing itself as a one-stop-shop for the space industry – one company with the ability to design, build, launch, and maintain satellites for customers. This deal is a massive validation of their business plan, and provides predictable revenue for years out.
Grayscale Chairman Barry Silbert has resigned. @BTC_Archive says SEC approval of Bitcoin ETFs expected by January 10
The bad news from VLD continues: https://ir.velo3d.com/news-events/press-releases/detail/134/velo3d-inc-enters-debt-amendment-agreement-with-existing
MM–this deserves a flash alert. Obviously your buy price of up to $6 needs to be revised. The burning question is why defense sales have been lackluster lately, and what will it take for sales to resume in order to save the company from bankruptcy.
I understand the 20% dilution by the printing of 36 million shares, but I don’t understand another agreement for cash payments from VLD. Considering the two pieces of news, is their cash runway now longer? What is a current fair share price? Please, no more pie in the sky hopium.
There was a new Seeking Alpha report on VLD that came out on the 19th. The author thought VLD was positioning itself for a buyout but thought they were too small & unprofitable to attract much interest and felt a buyout price of $1.30 was about what they could get. But that was prior to the news on the 27th that VLD is selling 36M additional shares before year-end so that buyout price would be even lower now.
The link above also indicates that VLD received a listing rule failure notice so they are now are on the clock to get the price over $1 or likely reverse split.
https://seekingalpha.com/article/4658749-velo3d-takeover-target
I bought lots more VLD today around 10 AM, getting my average cost down to 72 cents. With a 33% plunge today, a buyout around $1.00 is suggested. That assumes mediocre sales. With recovery in sales, this could be a multi bagger from here. With poor sales, BANKRUPTCY.
MM needs to carefully analyze the financial situation and business prospects.
NervGen continues rocketing up. (NGENF)
I hope some of you followed up on my comments about NervGen over the last few months and bought some shares. I was an early investor after I learned about the company from Biopub.co in 2020 and participated in a few private placements and watched patiently as the company struggled through a hold in their Phase 1 trial and manufacturing issues and a series of CEOs. Despite the long slog, I continued to buy more whenever progress was made and/or shares were available at prices far below average.
They initiated a small Phase 2 in chronic Spinal Cord Injury (SCI) a couple months ago which is approaching full enrollment. While some people with SCI are fortunate enough to experience substantial or even full improvement, others are less fortunate. In almost all cases, improvement tapers off after the first few months and after the first year, improvement is rare. In any event, I continued to add shares as a readout for the Phase 2 is expected in the summer and on the possibility of a leak of good news.
On Friday an SCI podcast had a guest who is involved in the trial and the podcaster said that some of the families involved are already seeing improvement. The lady involved in the trial agreed that it is very exciting, but they don’t know if those improving patients are receiving the drug or a placebo.
I know that the placebo effect is a truly powerful thing that can work wonders, but I am very skeptical that chronic SCI trial participants getting a placebo will show improvement, so I conclude that the drug is probably effective.
I added more shares on Friday. Someone suggested they haven’t found a graceful entry point since then. I say it doesn’t matter whether your entry is well-timed. I have shares in one account with an average price of $1.93 (when I have added on weakness, it was in other accounts). If this drug is effective (and we’ll know for sure in just a few months) then even though NervGen’s market cap has grown to 163M (nearly doubled in the past week) it is still worth much much more. I bought it because it was cheap and it’s my biggest investment. It is STILL cheap. They show more promise than almost any biotech with a mkt cap under $250M.
Their drug has also shown fantastic efficacy in animal models of stroke and MS. I used to say every $1 invested could return $100 (Rich Macary said it could return $1,000). Now I will say every $2.50 invested could return $100. In other words the stock is still cheap, given its potential and rapidly becoming de-risked. Success in this trial will easily push shares over $10. But for now its huge moves aren’t even noticed by Wall Street. I would tell anyone buy a small position now and add to it if it drops as we get closer to the data drop in the summer.
Chris, thanks for the update. Would appreciate hearing more ideas from you as well as continuing updates on this one. Not to infringe on MM site, I’d like to find a way to exchange emails (if interested) but don’t want to post on a public site. Ideas?
ChrisLemos1@yahoo.com
My gut says the drug works. Today’s stock action was interesting. It HAD TO break out to all time highs because of this plausible rumor of efficacy. Although the stock still gained on the day, an early plunge reversal suggests that there will be cheaper entry points soon. Huge 3 day spikes like this usually show retracements. Or the stock is just pausing on its trek upwards.
How did you get involved in private placements?
Harold Punnett, co-founder of Nervgen, was a subscriber to Biopub.co and he contacted the head of that site about his brand new company. Dr KSS at Biopub did his due diligence and did a webcast with NervGen which was looking to raise additional funds. I have taken part in several such placements with Biopub, though not all. Generally I don’t like early private placements due to their lack of liquidity, but the potential for outsized gains in these seemed very worthwhile.
Private placements enable buyers to get large loads of shares at better prices. However, the likely best strategy is to read the stories of NWI (or biopub) stocks, wait years or short them from initial giddy promotions. Then buy after enough data show promise, when the stock price is down over 90% from the recommended price. Does biopub follow the same pattern as NWI?
No, we discuss some very early stage companies like Nervgen and Acurx, but others (like ACHV) have been around a while and were starting to look interesting. Others (like APTO or ARCH) seemed interesting but when it became apparent that management was untrustworthy, were dropped unceremoniously. Shortly before AUPH’s Phase 2 results, I was persuaded by Biopub to take a stake and rode it from about $2 to $30. AXSM was also introduced around $2 and it went to $100. The brutal biotech bear market that began in 2021 was tough on a lot of Biopub stocks, but winners like those mentioned above and ALBO, MIRM, SLNO more than make up for the laggards. The truth is, the vast majority of biotech stocks are really uninvestible junk and it helps to have someone who is a very intelligent and honest Duke MD PhD with experience as a clinician, researcher and trial coordinator giving his opinion on various situations and developments. Plenty of physicians from a wide variety of specialties subscribe and chime in with their two cents as well.
Sounds great. I like the educated subscriber base. If a biopub subscriber threw darts and put 2% of investible money into each of 20 biopub stocks, how many of these 20 would result in 90% losses? How many would be fantastic winners as you describe?
On NGENF, it seems the 1st patient was dosed Sept 25. At 2 months, there was no news, and the stock bottomed around $1.25. This phase 2a chronic SCI trial has 20 patients–10 drug, 10 placebo. The trial gives daily injections for 12 weeks followed by 4 week further observation. The rumor of a noticeable response was leaked last week at the 12 week point. The timing seems suspicious. Despite the claims that “individualS” and not an “individual” are responding, my guess is that only ONE or a FEW are responding. This will likely still be better than placebo, where we think NONE will respond. This may explain the large correction from the spike to $2.51. So I think this deserves a small entry soon even lower than today’s close of $1.89.
Chris,
Yippee, I got some NGENF today at $1.75. A firm bottom would be at $1.20, last seen 1 month ago. At that time, there was despair that after 2 months, no rumors of efficacy were posted. Perhaps the stock is dropping because of fear of slow enrollment. Do you know how many patients out of 20 have been dosed to date?
A few weeks ago they hit 10 people enrolled I don’t know the current number. I don’t expect all 10 people getting the drug to have significant improvement, but I do expect that some will.
I own fewer than 20 Biopub stocks. I am not a big fan of diversification, but rather try to select a few that have a potential to go up several hundred percent. As for losing 90% of an investment, if share price drops and I still think the story is good, I’ll usually try to buy more while it’s on sale. I did have one big bust with Lexagene, where the CEO mismanaged the company and its creditor ended up owning all the assets and is taking it public again, but I also sold some at the top and it was a small loss for me.
So far there are at least 5 people getting the drug, and the same number getting placebo. If they don’t get all 20 (10 +10), will they delay reporting until they get the full enrollment of 20? Or, if 3 out of 5 get significant results from the drug and 0-1 placebo get some results, will they report that? That would be nice as a phase 2a. It could always be extended to phase 2b with more enrollment. Even this small successful phase 2a would encourage more funding. In this field, even a 20% success rate would improve lots of lives. That’s better than many blockbuster cancer drugs with their added baggage of severe side effects.
I like the comment from a YMB poster that if a SCI patient merely recovers the use of one finger, he can operate a motorized wheelchair by himself, certainly a big improvement in his quality of life.
The only thing that is keeping them from uplisting to the NASDAQ is the share price being below $4. They could do a 1 for 3 reverse split and be listed almost immediately, but they prefer just to let the share price rise organically. They (and I) believe that will happen the week they announce results from this trial in the summer.
I like the concentrated strategy of a few stocks you know well and have confidence in. Peter Lynch called the conventional strategy, “deworsification.” El Capitan also follows our approach.
Aptose has posted a new corporate presentation. Looks like the TUS/VEN doublet registrational trial is now expected to run well into 2026 and no indication of starting a TUS/VEN/HMA triplet registrational trial through 2025. So no FDA drug approvals happening in 2025 and maybe not even 2026.
https://www.aptose.com/investors/company-information/presentations
Money runs out Q3 of 2024. More dilution, dilution, dilution.
JGMD What is your take on MDNAF ? By the way have you read the bookThe Glutathione Revolution by Patel. I heard him speak recently very impressive.
He is a humble approachable guy Is what I mean by impressive in addition to his research.
Dilution appears to be their business model. Look at the 5 year chart. Only down about 98% since March 2020.
Thanks Chris They have only recently had success with their drug. Does that look good to you?
Management is untrustworthy, imo.
Yes, glutathione (GSH) enhancement is very important for chronic disease and acute illness recovery. Patel is a pharmacist offering transdermal GSH. Search pubmed.org, “transdermal glutathione” for technical info. This article is no. 4 out of 190. If the link doesn’t work, you can get the full text from Pubmed Central (PMC) for free. The rest of the articles aren’t relevant.
A clinical trial of glutathione supplementation in autism spectrum disordersThis study of autistic children compared blood levels of pre- and post- reduced GSH, oxidized GSH, GSH breakdown products of sulfate, taurine, cysteine. A group of 13 kids got oral lipoceutical GSH, another 12 got transdermal GSH. Mg/mg doses of GSH were an apple/orange comparison, since absorption of oral lipo and transdermal aren’t equal. It was reported that oral lipo gave somewhat higher changes in reduced GSH levels than transdermal. But no clinical results in symptoms of autism were reported for either group. Patel’s glutaryl GSH is probably better than the transdermal product in the study, since it is nano sized particles which have better absorption. But there is no information about how much GSH you get in the dosage of 4 sprays 2x/day on the skin. (I hate this about proprietary products which keep critical info secret, but Quicksilver reveals that you get 100 mg in 2 sprays.) At about $100/month, Patel’s product is expensive, although Quicksilver is also expensive. As a practitioner, I can get discounts for orders of 6 of Patel’s product. Well, it’s worth trying to judge for yourself. For serious chronic and deteriorating problems like Parkinson’s disease and Alzheimers’ it is important. Mainstream medicine offers nothing except drugs which have limited efficacy and don’t alter the inexorable decline of disease. There is a nice video from Dr. David Perlmutter on a patient with Parkinson’s disease 3 minutes after IV injection of 3000mg of GSH. Before injection, the 66 year old man walks with a shuffle of 1 foot steps, and his voice is similarly jerky. After injection, he walks normally with 2-3 foot steps and the voice is smooth and fluent. Many years ago, I read Perlmutter’s book on treating these terrible neurologic diseases. He used IV GSH 1400mg 3x/week. I met him once at a meeting. PRICEY. If Patel’s product has some benefit, it is worth $100/month, a lot cheaper than getting IV GSH at probably $1000 to 2000 a week.
Patel correctly says that aging people have big declines in GSH. We all need GSH for optimal health. The real market demand is from billions of people worldwide. Economies of scale would drop the price to make GSH somewhat affordable. Instead, mainstream insurance drug medicine takes the money away from real, natural substances that have benefit and rarely do harm, unlike the agents of mainstream medicine that waste big money on mainly harmful approaches. All this money wasted is magnified by political, regulatory bureaucracy.
As for MDNAF, I am negative on these hot shot scientists who think they can manipulate body substances like cytokines using proprietary unnatural smart drugs. At best, these terrible diseases may be only temporarily improved in symptoms. If root causes of this inflammation gone bad resulting in cancer, are not addressed, failure is the likely result. Case in point, MDNAF. Another stupid example is the flawed theory that since Alzheimers’ is associated with plaques, push billions of bucks into designing plaque dissolving drugs. All these trials have failed. No thought is given to figuring out WHY the plaques have formed. You know that the real answers are given in Dr. Dale Bredesen’s book THE END OF ALZHEIMERS’.
Thank You JGMD as I said before you are a treasure. I am taking the sprays of Glutathione and it seems to be helping me with energy. My sister who has early dementia is taking it and it seems to be helping her.
Fantastic news! So you and your sister are taking the glutaryl transdermal spray from Patel, or the Quicksilver product? How many sprays of which? The video on Patel’s site of a young well built man spraying the glutaryl GSH on his front right flank is silly. This young man has plenty of his own GSH, but we old fogies are deficient and need it. Of course, good looking young people sell products better.
Steroid hormones like typical cortisone creams, estradiol, testosterone have about 5-10% absorption into the body from the skin. GSH is composed of 3 amino acids and has a molecular weight of about 400, similar to the steroid hormones. But the steroids are fat soluble molecules, whereas GSH is more of a water soluble substance, so I have no idea of how the skin absorption of GSH compares to the steroids. We know that Quicksilver’s GSH has high absorption if you are able to hold the liquid in your mouth for a few minutes so that you swallow only tiny amounts. Too bad Patel doesn’t let you know exactly how much GSH is in the glutaryl.
For your sister, the more GSH the better. The only limitation is the cost. Chris Shade of Quicksilver advocates high dose pulse dosing, like hammering a nail into the wall instead of just pushing on it, which won’t do anything. She could experiment with doubling her dose twice a day, vs the same dose 4x a day. David Perlmutter takes the pulse strategy for IV GSH–high dose 1400mg 3x/week. Look at the video I mentioned for the Parkinsons patient before and 3 minutes after 3000mg.
This antioxidant anti-inflammatory GSH strategy is the same for dementia and Parkinsons disease. Mainstream doctors don’t grasp this concept. Both conditions involve brain inflammation, but all the mainstream doctors do is give drugs to treat different symptoms of the diseases. The results are limited at best. More drugs to treat side effects of the original drugs. What a mess.
I’ve seen posts about ACHV. Does anyone have any of this? I was considering buying it after the FDA set back, but I also saw that they have done 3 reverse splits. Just curious of everyone’s opinion on this.
Those reverse splits were long ago. I have ACHV and consider this a great entry point.
ACHV’s drug is great and will succeed. However, the stock was $5.00 to 5.50 before the FDA setback. Recently the stock was $3.20, which I thought was realistic in view of the uncertainty of the Q1 meeting with the FDA to develop a plan to monitor drug safety. The ideal situation is phase 4 postmarketing of safety. If that is the outcome of the Q1 meeting, then the stock is fairly valued now at $4 up to $5. But if the FDA asks the company to do more work which will delay approval, then the stock could fall back to $3. The company is running out of money, so a capital raise/dilution is highly likely, and will depress the stock short term. Medium/long term, yes, a good buy now.
Just like NGENF had news leak out that chronic SCI patients are seeing results in its Phase 2 trial and the share price doubled in a week, ACHV could announce a Big Pharma deal at any time after they meet with the FDA in Q1. I hear people regretting they weren’t in NGENF before it popped up.
While I think NGENF’s share price appreciation is just in its embryonic stage, once ACHV announces a BP deal, it will pop up and likely be time to sell. Earlier this week someone was paying 30 to 40 cents per share for the right to buy ACHV for $10 within the next 6 months. You can even get 10 cents per share if you give someone the right to buy your shares for $5 within the next 3 weeks. Ten cents (2.5%) in 3 weeks on a $4 investment is a pretty good return. Especially if you can do it every month. If called away at $5, that’s a quick 25%.
For the conservative side of your portfolio, consider NAT. Its business model is simple. It owns 20 Suezmax tankers and shares profits with shareholders via quarterly dividends. There are good times and bad times in the tanker industry, but Suexmax day rates for the past month are the highest they have been since their post-Covid spike. YOY shares rose about 30% and paid 49 cents in dividends (pretty sweet for a company you could have bought below $3 a year ago). Recent Red Sea troubles are not reflected in today’s share price, but I note container freight prices have risen 40% in a week. https://shippingwatch.com/carriers/Container/article16718233.ece?utm_campaign=ShippingWatch%20Newsletter&utm_content=2023-12-29&utm_medium=email&utm_source=shippingwatch_com
The shortage of tankers will continue at least into 2025 giving strength to pricing with an aging fleet in the industry and few new ships coming online for years (we know because new ships take years to build).
Can you buy NAT cheaper? Maybe, but even at these prices it will make you money over the next year, even more if you know how to juice the dividend income by trading options. Speaking of which, people are offering good money today for the option to buy shares at $5 between now and Jan 19, 2024. I just sold some of those and earned an extra 6 cents per share.
Is anyone invested in CKPT – Checkpoint Therapeutics? It looks like it might be a buy after their recent set back.
HAPPY BIRTHDAY
MR. Murphy
Trust you had a Wonderful
Birthday, Christmas and
looking forward to GREAT
NEW YEAR!!!
Happy New Year to all.
SCYX – GSK revises Scynexis licensing deal for antifungal agent
GSK amended its license agreement for Brexafemme due to the commercialization delay. The amended deal lowers the milestone payments but the royalty terms are unchanged.
https://seekingalpha.com/news/4051930-scynexis-stock-falls-gsk-amends-deal-brexafemme
Who is responsible for correcting the manufacturing problem, GSK or SCYX? If GSK, could GSK have been scheming to delay the correction so they could reduce the milestone payments to SCYX? On the other hand, there is no money coming in to either GSK or SCYX until the manufacturing problem is resolved. GSK still gets most of the VVC revenue. The MARIO trial for invasive candidiasis has to start, which if successful will provide SCYX with the real revenue.
MM, please comment.
New World Investor for 1.4.24 is posted.