Dear New World Investor:

The Fed! The FED!! THE FED!!! Well, I was wrong and we’re all glad that’s over. For the first time in four years, Fed Chairman Powell cut the Fed funds rate. Instead of the quarter-point cut I expected, he bowed to Wall Street’s demands for a half-point cut to a new range between 4.75% and 5.00%, down from a 23-year high of 5.25% to 5.50% Stocks immediately jumped, giving Wall Street a chance to sell or short before Wednesday’s rug pull that gave traders a chance to reload for today’s rally.

The dot plot shows two additional quarter-point cuts this year followed by four more in 2025 and two more in 2026. I still believe future cuts will be smaller and come slower than most expect until an actual recession hits. But despite pessimistic views on global economic growth over the next 12 months (net 42% expect weaker, top chart), a soft landing is increasingly seen as the most likely outcome (bottom chart).

Click for larger graphic h/t Michael Hartnett, BofA

Fed officials now see the unemployment rate ending the year at 4.4%, up from their previous forecast of 4.0%. Inflation is seen ending the year at 2.6% and 2.2% in 2025. They think GDP will grow 2.0% instead of 2.1% this year and hold the 2% level for the next two years.

Powell cast the Fed’s 50bps cut in non-scary terms: “We are committed to maintaining our economy’s strength. This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained.”

Market Outlook

The venerable Dow Jones Industrial Average closed over 42,000 for the first time ever. The S&P 500 added 2.1% since last Thursday to new record highs today over 5700. The second half of September usually is bearish, so don’t be surprised if Wall Street tries to run the Index all the way down to its 200-day moving average at 5194. That would be an almost-10% correction to shake loose some cheap stock for the fourth-quarter rally. The S&P is up 19.8% year-to-date.

The Nasdaq Composite gained 2.5% and also set intraday and closing records, in this case over 18,000. It is up 20.0% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) climbed 3.4% as the biotech recovery rolls on. It now is up a respectable 14.7% year-to-date. The small-cap Russell 2000 soared 5.8% as small-cap finally caught a bid and is up 11.1% in 2024.

This was fast:

Click for larger graphic h/t @chigrl

The fractal dimension is finally up to the 30 level, which usually marks the end of a trend. It has a long way to go in either time or price to get to 55 and be fully consolidated.

Top 5

Changes this week: Removed AAPL – the iPhone 16 is introduced

Near-Term – chronological order
SCYX – ScyNexis – Data releases and resolution of the manufacturing problem
USL United States 12 Month Oil Fund, LP – crude should rise quickly
EQT EQT –natural gas price rebound
CMPS – Compass Pathways – Rebound from negative AdCom review of MDMA and Phase 3 data release in December quarter
FCX Freeport McMoRan – copper shortage
AKBA Akebia Therapeutics – Vafseo TDAPA approval 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 increased to +2.9% as both consumer spending and business investment stay strong. The Blur Chip economists are starting to raise their outlook, too, although they are lagging by a full percentage point.

Click for larger graphic

Real core retail sales hit another record high in August. Consumer spending is supported by rising real wages.

Click for larger graphic h/t @ericwallerstein

Treasury bonds will rally in the short-term, but constantly rising government spending, financed by issuing more Treasury bonds, is a major problem that won’t go away no matter who is President. Only the House of Representatives can fix this. 2024 Treasury bond issuance is expected to hit $1.9 trillion, higher than even the peak of the 2008 Great Financial Crisis levels.

Click for larger graphic h/t @GameofTrades_

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

Sunday, September 22
Fall Equinox – 8:43am

Monday, September 23
PLTR – Palantir – Before the open – Added to the S&P 500

Tuesday, September 24
Short Interest – After the close

Thursday, September 26
June quarter GDP – 8:300am – Third estimate
CMPS – Compass Pathways – 1:20pm – TD Cowen Novel Mechanisms in Neuropsychiatry Summit: Fireside Chat

Friday, September 27
Personal Consumption Expenditures Index – 8:30am – The Fed’s favorite inflation indicator

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 – $228.87) introduced the iPhone 16 and iOS 18.

TF International Securities analyst Ming-Chi Kuo wrote that pre-order sales of an estimated 37 million units are down almost 13% from last year’s iPhone 15 launch as a result of weaker-than-anticipated interest in the Pro model. He added: “One of the key factors for the lower-than-expected demand for the iPhone 16 Pro series is that the major selling point, Apple Intelligence, is not available at launch alongside the iPhone 16 release.”

But it will be available in a software upgrade in October, in time for the holiday selling season. It doesn’t make sense that waiting a month to get the AI software upgrade would stop someone from ordering the 16 now. In fact, at T-Mobile’s capital markets day, CEO Mike Sievert said: “I think this one may unfold a little differently in terms of when the word-of-mouth takes off because the principal differentiating feature is coming in later software release. That being said, sales are higher than last year, which is saying something because sales last year were quite strong. I get asked a lot if this is a super cycle. I don’t know what that is and this probably isn’t. But it’s vibrant and is higher than last year, and we suspect it will be drawn out over time, a little more as people get the Apple intelligence features later, start showing their friends, and generate later excitement as opposed to in prior years.”

Later, he told CNBC: “…people are buying Pros, they’re buying Maxs, so they’re buying up the food chain, and they’re buying at a greater rate than last year.”

Wireless carriers are the single largest channel for iPhone sales. They accounted for 43% of global iPhone shipments and 66% of all US iPhone shipments over the past 12 months .

Morgan Stanley said Seifert’s comments are important because they suggest iPhone demand “might not be as bad as feared and are the first positive commentary on iPhone 16 family demand.” They have an Overweight rating and a $273 target price. They named AAPL to their Vintage Values 2025 list of 15 stocks to own for the next 12 months.

Apple just got FDA approval for software to use AirPods Pro as over-the-counter hearing aids. A user can adjust settings without the need of a hearing professional.

They also got approval to use the Apple Watch Series 9, Series 10 and Watch Ultra 2, as a sleep apnea detector. It uses the watch’s accelerometer to detect small movements at the wrist associated with interruptions to normal respiratory patterns during sleep. Every 30 days, the Apple Watch analyzes Breathing Disturbance data and alerts users if a pattern of sleep interruptions is detected, encouraging them to seek medical advice. AAPL is a HOLD – I expect to move back to Buy under $175 for new iPhones.

Corning (GLW – $44.43) hosted a facility visit to their Concord, NC, optical fiber plant this morning (WEBCAST HERE). It is the world’s largest and lowest cost optical-fiber production facility.

CEO Wendell Weeks said: “I’m very pleased with the progress we have made on our ‘Springboard’ plan to add more than $3 billion in annualized sales by 2026. The plan leads to an improving return profile, with profits growing significantly faster than sales. Today, we are sharing our Springboard operating-margin target of 20% by the end of 2026.

Click for larger graphic

“We are implementing price increases in Display Technologies and expect to deliver segment net income of $900 million to $950 million in 2025, and to maintain net income margin of 25%. Additionally, our positive momentum in Optical Communications continues – Enterprise sales are expected to grow by more than 40% year-over-year in the third quarter, driven by the continued strong adoption of our generative AI products.”

They reiterated their September quarter guidance for $3.7 billion in revenues and 50¢ to 54¢ earnings per share. GLW is a Buy under $33 for the 5G cellular buildout, followed by the smartphone upgrade to use 5G services. My target is $60 in 2025 .

Meta Platforms (META – $559.10) and Ray-Ban owner EssilorLuxottica extended their partnership with a new long-term deal to develop multi-generational smart eyewear. Since 2019, their collaboration has produced two generations of Ray-Ban smart glasses, combining EssilorLuxottica’s industry expertise and global retail and wholesale network with Meta’s technological innovations.

CEO Mark Zuckerberg said: “We have the opportunity to turn glasses into the next major technology platform, and make it fashionable in the process.”

D. A. Davidson initiated coverage with a Buy recommendation and a $600 target price. They listed it as a Top Pick Megacap. They believe the company has set itself up to be the open-source leader for the next two major technology platforms – AI Foundation Compute and Spatial Compute. They wrote: “While previous technology innovation was driven by nimble startups, AI and Spatial Compute require unprecedented scale, reach, and capital. While Alphabet, Apple, Amazon, and Microsoft are crowded into the closed garden side of these platforms, Meta has the pole position on the open side.

“ Meta is already reporting how the advancements in AI are driving better ad delivery and yields. This makes it easy to justify not only the investments in AI Compute but also open-source in them to capture the benefits from the developer community.” The brokerage firm highlighted that the billions Meta spent in Reality Labs have strengthened its position to be the open-source winner alongside Apple’s closed garden. META is a Hold – I expect to move back to Buy under $400.

Palantir (PLTR – $36.83) joins the S&P 500 before the opening Monday morning. CEO Alex Karp told CNBC: “We believe Palantir is going to be10x bigger” and took a victory lap.

The company signed a multi-year, multi-million-dollar contract with Nebraska Medicine, a $2.5 billion academic health system based in Omaha, to use its Artificial Intelligence Platform (AIP) to enhance patient flow, nurse allocation, clinical supplies, and revenue cycle optimization. In a series of targeted bootcamps, Nebraska Medicine took less than six weeks to put a new workflow in production and as little as 90 minutes to introduce more.

Since partnering with Palantir, Nebraska Medicine has seen a 2000% increase in Discharge Lounge utilization, freeing up beds earlier for patients and decreasing time from discharge order to patient discharge by one hour on average. They’ve sent 1,200+ AI-powered appeal letters to payers in less than three months, helping them more efficiently and effectively respond to claims denials, leveraging AI to combat payer behaviors. Nebraska Medicine also uses AIP to predict Operating Room and Post-Anesthesia Care Unit bed necessity, manage their supply chain, recommend staff movements, and more.

The partnership will also expand Nebraska’s Foundry Ontology and explore new opportunities in clinical research and care to improve patient outcomes.

Palantir also won a five-year $99 million contract with the Army to deploy User-Centered Machine Learning (UCML).

The big Enterprise Resource Planning (ERP) systems from SAP and Oracle are at the center of most large companies today. But Duane Massie, EVP of Associated Materials, said: “Everything that’s in an ERP system, we’re doing in Palantir today. So, if you’re an ERP reseller, I’m sorry, but your time is over. Many of you have legacy systems. You can do more in Palantir in less time than it would take to implement a new ERP system. Implementing ERP across 11 factories would take almost five years. With Palantir, this took less than nine months, and we’ve implemented over ten business use cases already. We are seeing immediate bottom-line results. We are improving on-time delivery, and our customers actually like us.”

GE Aerospace ran an ad in the Future of Defense newsletter:

Click for larger graphic h/t @Elianoayounes

Palantir posted Alex’s opening statement at AIPCON 5:

Bank of America reiterated its Buy rating and raised its target price from $30 to $50. They said Palantir is popular among retail investors, but still misunderstood by many on Wall Street. BofA sees a huge opportunity for the company to become the common data operational system for the U.S. government and large U.S. businesses. They pointed out that a 1980 estimate of cell phone users by 2000 was just 900,000. The actual number of mobile subscriptions that year was more than 100 million. Early forecasts also failed to see the advent of mobile apps and smart devices. BofA wrote: “We view Palantir’s capabilities, technology, and path forward facing a similar fundamental misunderstanding. S&P 500 inclusion provides a watershed moment for institutional investors to revisit what they ‘know’ about PLTR.”

On the other hand, Citi stuck to their $30 target and wrote: “Despite strong bookings in commercial, the early stage of AIP monetization and a lumpy Government business ahead of elections keep us on the sidelines.” See you at higher prices, Citi. PLTR is a Buy under $22 for a $100+ target.

PayPal Holdings‘s (PYPL – $77.57) jumped 6% today. Venmo is an important part of the connection the company is building between their customers and their communities. They launched a new “What’s Your Venmo?” ad campaign to drive brand awareness among consumers and illustrate its utility beyond peer-to-peer payments.

PYPL is a Buy under $68 for a double in three years.

Small Tech

Enovix (ENVX – $8.44) leaned on William Blair to make last week’s password-protected presentation available. The password is wbenovix.912 and is case-sensitive (FIRESIDE CHAT HERE – you can put in my name as your contact). The second password they will ask for is your Zoom password, and the third (!) is “wbenovix.912” again. I’m not saying they are deliberately trying to keep non-William Blair clients out, but…

CEO Raj Talluri said today’s batteries are throttling the performance of smartphones and have to be upgraded for the AI era. Batteries need to be fast-charging with an 800 to 1000 cycle life. Their EX-1M battery meets those goals and they are delivering samples to customers now. Their EX-2M will have samples by the end of this year – it provides 30% more energy density than EX-1M.

30 customers attended the recent Malaysia factory opening event. Raj said the coming milestones for the next year include manufacturing milestones to make the batteries. By the end of this year they’ll be up to 90% yields on the Agility line. The high-volume line will be added in 2025 and uses the same machines – it just runs faster. They have the cash to do that and get into 2026. Malaysia has room for three more high-volume lines.

Then we’ll see samples shipped and more customer announcements. They’ve already announced one smartphone contract and one VR/AR contract and they are “super close to announcing another smartphone contract.”

Raj said he knows they are competing against big companies, but smartphone manufacturers are fast to adopt new technologies that give them a market advantage. Plus, it’s a huge market and Enovix only needs a small slice to be a big company. ENVX is a Buy up to $20 for a 4-year hold to $100+ as their BrakeFlow lithium-ion battery takes market share.
Primary Risk: A new competitor invents a better battery.

Rocket Lab USA (RKLB – $7.17) is #2 to SpaceX in a big, fast-growing market. Market research firms Polaris and Precedence agree that launch services alone will be roughly a $50 billion-per-year business within a decade. Morgan Stanley and Citi both predict that the entirety of the science, technology, and services businesses linked to space will be worth on the order of $1 trillion by 2040.

I picked Rocket Lab out of a small group of space upstarts because it had the best approach to building a big space company and because Peter Best looked like a passionate, world-class entrepreneur. It was cheap because it was doing something new that most investors still don’t fully appreciate. They will.

During its pre-merger SPAC presentation, Rocket Lab predicted it could grow its revenue at a compound annual growth rate (CAGR) of 97%, from $35 million in 2020 to $267 million in 2023. It ended up growing its revenue at a slightly slower three-year CAGR of 91%, from $35 million to $245 million. But they also expected to generate a positive adjusted EBITDA margin of 10% by 2023. That figure actually landed at negative 37%, and that’s why you can buy the stock today for one-third of its IPO price.

Since their very first launch in May 2017, Rocket Lab has put over 190 satellites into orbit. Its Space Systems technology – software, solar panels, radios, etc.- is found inside more than 1,700 different satellites, as well as the James Webb Space Telescope. Jeff Bezos’ Blue Origin Mars probes for NASA will also be flying with Rocket Lab technology on board.

Yet the most impressive thing I’ve seen lately is a rocket that didn’t launch this week. At T minus 0 – literally the last second – Electron’s flight computer aborted on a ground systems sensor trigger and safely shut down the engines. Electron, the launch pad, and Kineis’ payload all remained healthy. The abort was triggered by a piece of ground support equipment not reaching its target in the allocated time. This showed me that Rocket Lab has the systems in place to cope with unexpected problems and create successful launches, unlike most of their smaller competitors.

From 2023 to 2026, analysts expect Rocket Lab’s revenue to grow at a CAGR of 54% to $887 million, but they don’t expect its adjusted earnings before interest, taxes, depreciation & amortization (EBITDA) to turn positive until 2026. I don’t care if they turn positive in 2025 or 2026. They had $497 million in cash at the end of June and the share count only rose by about 10% over the past three years, so they aren’t diluting investors with new stock offerings. 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- $2.74) and two other biotech recommendations presented at the Cantor Global Healthcare Conference (FIRESIDE CHAT HERE). CFO Andrew Booth gave a general review of their history and said they have more collaborations to announce over the next year. They also will open their FDA-certified manufacturing facility for co-developed and internal projects.

In addition to their two lead programs that will enter the clinic next year, they have more than a dozen programs in internal development. At the same time, more of the partnered molecules will be moving into the clinic. Their model for the long term is Regeneron – start with a great technology, develop a couple of winning drugs, and expand into a full-scale biopharna company. 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

Compass Pathways (CMPS – $7.40) also presented at the Cantor conference (FIRESIDE CHAT HERE). Like last week’s Wainwright conference and the week before’s Morgan Stanley conference, they are laser-focused on differentiating themselves from the Lykos Therapeutics MDMA turndown by the FDA. They want Wall Street to understand how COMP360 is different, how their Phase 3 trial design is different, and that they have worked with the FDA every step of the way to be sure significant results are approvable.

One key difference is Compass will contract with a company to train health care professionals to use COMP360. Lykos said they would do it themselves and the Advisory Committee was very skeptical. Compass also has a more robust total package, including extensive preclinical work and manufacturing data.

Compass is working hard on commercialization. They know they can’t just announce a new, effective drug for treatment-resistant depression. They are signing partnerships with major treatment centers to both understand what they need and start training them in what they need to do. Compass has engaged with the VA. They already got a reimbursement code and are working with insurers. CMPS is a Buy under $20 before they announce the first Phase 3 results by the end of this year 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: 2026
   Probable time of next financing: Late 2025

Editas Medicine (EDIT – $3.91) presented at the Wells Fargo Healthcare Conference and the Morgan Stanley Global Healthcare Conference that I covered a couple of weeks ago, and was another Cantor presenter (FIRESIDE CHAT HERE and TRANSCRIPT HERE). To my delight, CEO Gilmore O’Neill focused more than usual on out-licensing their intellectual property for non-dilutive financing as one of their three pillars. Wall Street doesn’t pay any attention to that.

Their second pillar is driving reni-cel to approval in sickle cell disease. Reni-cell promises to be best in class, as every clinical trial patient had zero vaso-occlusive incidents after dosing and showed a durable positive response after five months. Gilmore said they are a “fast follower” into this market, and a “fast, better.”

Their third pillar is in vivo gene editing, where it can up-regulate instead of just knocking out a malfunctioning gene. Today’s computational power lets them interrogate large genetic databases to find targets where in vivo editing is especially useful. Gilmore said: “So our immediate priorities…are to really build in vivo medicines that would be first-in-class and best-in-class…you want to be differentiated and have a high impact. So the way we do that is by first, our editing strategy, which is to drive towards functional upregulation. Many, if not most in the space are using editing to knock down gene expression, with a particular focus on toxic gain of function proteins. We’re using a totally different approach. We are actually, functionally up-regulating…proteins that can compensate for loss of or a dysfunctional protein.

“…the important thing about Reni-cel is…It has enabled us to develop a therapy which is clearly highly efficacious and indeed differentiated, and I believe best-in-class, largely because it doesn’t just functionally up regulate fetal hemoglobin levels at meaningful levels that completely control VOEs. We have seen no VOEs since transplant. Once a patient’s been transplanted, they have gone from having a mean of 4 serious vaso-occlusive events to zero events…and in addition, every single patient at five months and beyond has a sustained correction of their anemia…within the normal physiological range for hemoglobin. And why does that matter? Because beyond patient’s complaints and distress, and frankly, the huge adverse impact on their lives and the economic impact on the health care system of vaso-occlusive events, fatigue – lack of energy – are enormous sources of problems for patients, and anemia is a key driver of such events.”

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: 2025
   Probable time of next financing: 2026 or never

TG Therapeutics (TGTX – $25.28) presented new five-year data from the Phase 3 trials of Briumvi at the 2024 European Committee for Treatment and Research in Multiple Sclerosis (ECTRIMS) annual meeting. It showed that 92% of patients with relapsing multiple sclerosis were free from disability progression after five years of treatment. During Year 5, the annualized relapse rate was 0.020, equivalent to one relapse occurring every 50 years of patient treatment. There were no new safety signals emerging with prolonged treatment.

Also, new data from the ENHANCE Phase 3b study showed rapid 30-minute infusions of Briumvi are well tolerated. Infusion-related reactions in patients receiving 30-minute BRIUMVI infusions were all mild (Grade 1) and resolved completely. These rapid infusions were accomplished with non-drowsy pre-medications and no required post-infusion observation time. Data also demonstrated that patients switching from prior anti-CD20 treatment can successfully eliminate the initial four-hour Briumvi infusion. TG will work with the FDA to start a label-enabling trial. Buy TGTX under $12 for a target price in a buyout of $30 or more.
Primary Risk:Briumvi, the MS drug, fails to sell.
   Clinical stage of lead product: Approved
   Probable time of next FDA approval: NM
   Probable time of next financing: Never

Inflation MegaShift

Gold ($2,611.70) jumped to a new intraday high after the Fed cut, promptly fell to a loss on the day, and closed at an all-time high over $2,600 today. I believe that’s the 35^th record close for Comex gold futures this year.

Fed cuts make the dollar weaker – at least so far – which pushes up precious metals, stocks, bitcoin, and other risk assets. Of course, as soon as other central banks cut, their currencies weaken against the dollar, and that pressures risk asset values. Goldman Sachs wrote: “While we see some tactical downside to gold prices under our economists’ base case of a 25bp Fed cut on Wednesday [oops], we reiterate our long gold trading recommendation and our price target of $2,700/oz by early 2025.”

Goldman noted that while a structurally higher demand from central banks has reset the relationship at this price level, changes in interest rates continue to drive fluctuations in gold prices. It also indicated that exchange-traded funds backed by physical gold are consistently rising as the Federal Reserve’s policy rate diminishes.

Until recently, Saudi Arabia’s gold demand would decline when the gold price went up and strengthen when the price went south. When the gold price went up in 2016, 2017, 2019, and 2020 the Saudi’s cut back imports and actually became net exporters. This dampened volatility in the gold market. But ever since the West immobilized Russia’s dollar assets in February 2022, those with diplomatic disagreements with that decision are increasingly exchanging their dollars for physical gold. Saudi Arabia is the latest country with cross-border trade statistics showing it has shifted from being price sensitive to a price driver. Since 2022, gold prices escalated yet the Saudis continued to import gold during the entire rally.

Click for larger graphic h/t @JanGold_

The fractal dimension nailed this move up. It is heading towards trend exhaustion at the 30 level, but there’s still enough energy for more time and points.

Miners & Related

Coeur Mining (CDE – $6.91) presented at the Gold Forum Americas (SLIDES HERE). Management said they have multiple near-term catalysts converging in 2024:

Click for larger graphic

The construction, commissioning, and ramp-up of Rochester is now complete. Rochester placed 2.7 million tons of rock on the new Stage VI leach pad in August, a 39% increase over July. The mine remains on track to place 7 million to 8 million tons per quarter during the second half of 2024. Rochester is expected to increase mining rates by 2.5x at significantly lower costs per ounce.

The mine has a 16-year life based on Proven and Probable reserves, and they have numerous potential expansion sites on their 43,441 net acres. This successful expansion project is a huge win for Coeur. In addition, they continue to make significant drilling investments at Palmarejo and Silvertip targeting resource expansion, and at Kensington and Wharf targeting reserve increases.

Click for larger graphic

CDE is a Buy under $5 for a $20 target as gold goes higher.
Primary Risk: Prices of precious metals fall due to US dollar strength.

Sandstorm Gold (SAND – $6.03) reported on the drilling and exploration activity on their portfolio of royalties and streams. Lundin Gold announced additional results from its 2024 near-mine drilling program, with recent intercepts continuing to delineate the new Bonza Sur gold deposit at the Fruta del Norte mine. Sandstorm holds a 0.9% net smelter returns (NSR) royalty on the precious metals produced at Fruta del Norte.

Bonterra Resources announced additional drill results on the Phoenix JV with Osisko Mining. Sandstorm holds an NSR royalty ranging between 0.5% and 3.9% on portions of the Phoenix JV property, and also holds a 1.0% NSR royalty on the neighboring Gladiator (West Arena) gold deposit.

Awalé Resources reported several high-grade intercepts from its ongoing drill program at the Odienné project in Côte d’Ivoire, with significant assay results. Sandstorm holds a 2.0% NSR royalty on the Odienné project.

Sandstorm is well on its way to having a huge portfolio of gold streams with no further investment. SAND is a Buy under $10 for a $25 target.
Primary Risk: Prices of precious metals fall due to US dollar strength.

Cryptocurrencies

Cryptocurrencies are a diversifying asset that offer a unique opportunity to make (or lose!) a lot of money quickly. You can easily buy bitcoin and other cryptocurrencies at Coinbase, Block, or Robinhood.

Bitcoin (BTC-USD on Yahoo – $63,216.53) rallied sharply with other risk-on assets after the Fed decision. Longer-term, Coinbase just introduced cbBTC, a 1:1 bitcoin token on the ethereum and Base blockchains. Although bitcoin is the most valuable cryptocurrency in the world, it doesn’t have smart contract capabilities like ethereum. Without smart contracts, bitcoin holders can’t directly participate in the rapidly-growing decentralized finance (DeFi) economy. By creating cbBTC, Coinbase lets users leverage their bitcoin in DeFi while keeping the original bitcoin fully backed.

It’s easy to use. Bitcoin holders send their BTC to a Coinbase-controlled bitcoin address. Once the transaction is confirmed on the bitcoin blockchain, an equivalent amount of cbBTC is minted on Ethereum or Base and sent to the user’s wallet. When redeeming, users send cbBTC back to Coinbase, which burns the tokens and transfers the equivalent amount of BTC to the user’s bitcoin address, completing the process in reverse.

It’s a simple, seamless process completed without leaving the Coinbase platform and likely to unlock billions in dormant bitcoin capital. It should result in a significant inflow of bitcoin into DeFi markets, driving bitcoin’s value higher. The more bitcoin is used in DeFi, the higher the demand for it becomes, driving up its price as the available supply plateaus. Unlike ethereum, the number of bitcoins that can ever be minted is fixed at 21 million.

Click for larger graphic

From August 6 to September 12, Michael Saylor at Microstrategy bought another $1.1 billion bitcoin, 18,300 coins at an average of $60,408 each, his largest buy since February 2021. Microstrategy now owns 244,800 bitcoins worth over $15.4 billion. He thinks each coin will be worth $13 million by 2045. He just announced a $700 million debt offering of convertible senior notes due in 2028, his third this year, to buy more coins. He’ll use $500 million to pay back existing senior secured notes, while the rest will go for more Bitcoin and company expenses.

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- $36.01) 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- $18.67) 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 – $72.07

Oil rose 4.5% from last week to move back over $70 as Libyan exports continued to slump. United Nations-led talks failed to break an impasse over control of the central bank, which has spilled over into its oil industry. And, of course, the Fed cut. Plus, around 12% of current oil production in the Gulf remains shut in after Hurricane Francine hit the Louisiana coast last week.

@ericnuttall wrote: “We are in a fear-driven oil market where negative stories get more clicks. One such story yesterday said that US shale, despite 8 months of flat production, will grow by 400k-500k bbl/d exit’24-exit’23 due to a new gas pipeline coming online. This feeds the false narrative of surging US production = Saudi/OPEC+ in fear of losing further market share will soon flood the market to restore ‘discipline.’ I’ve spoken with both analysts and producers, and none corroborate the thesis of this story, all stating that minimal production growth potential has been impacted. With much of 2025 non-OPEC production price sensitive <$70WTI (US shale and Canada) we think the market is too optimistic on 2025 non-OPEC growth prospects, implying a tighter-than-consensus market, and in the words of a wise man "gravity will take care of itself."

If a supply glut is about to happen, producers sure aren’t ordering the machinery, pumps, valves, compressors, etc. needed to make a supply glut happen.

Click for larger graphic h/t The Crude Chronicles

We still have record negative positioning. With speculative positions in Brent turning net-short for the first time, trend-following funds are near their most bearish levels in the oil market ever, according to EA Quant Analytics. I think speculators who are currently short oil are Living On Borrowed Time or, to quote him, about to get their faces ripped off.

The July 2026 Crude Oil Futures (CLN26.NYM – no trades – June closed at $66.54) 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 – $36.78) is a Buy under $40 for a $100+ target.

Vermilion Energy (VET – $9.61) is a Buy under $11 for a target price of $24 or more.
Primary Risk:Oil prices fall.

EQT (EQT – $34.73) will benefit from the AI revolution. From Florida to Oregon, utilities are racing to meet a surge in demand from power-hungry AI data centers, manufacturing facilities, and electric vehicles. They are planning new natural gas-fired power generation at the fastest pace in years. In the first six months of the year alone, companies have announced plans to build more new gas power capacity across the US than they did in all of 2020, data from Sierra Club show.

If the second half looks anything like the first, 2024 will mark the most new gas-power generation announced since at least 2017. In total, more than 200 gas units are in various stages of development across the US with plans to start up between now and 2032, for a total of about 100 gigawatts of power, or enough to power close to 80 million homes. Natural gas overtook coal as the No. 1 US source of electricity in 2016.

The U.S., once an importer of liquefied natural gas (LNG), has surpassed Qatar as the world’s top exporter, with booming LNG exports to help wean Europe off Russian gas and Asia move away from coal. EQT has several supply deals in place with LNG exporters. 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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RIP JD Souther

Souther co-wrote some of the biggest hits for the Eagles, including Best of My Love, Heartache Tonight, and New Kid in Town.

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Your Editor,

Michael Murphy CFA
Founding Editor
New World Investor

All Recommendations

Priced 9/19/24. Check out the complete Portfolio page HERE.

Buys
These are the stocks everyone needs to own because transformative events are happening over the next year or two, and I expect to hold them long-term.

Tech Dominators
  Corning (GLW – $44.43) – Buy under $33, target price $60
  Gilead Sciences (GILD – $83.90) – Buy under $80, target price $120
  Palantir (PLTR – $36.83) – Buy under $22, target price $100+
  PayPal (PYPL – $77.57) – Buy under $68, target price $136
  SoftBank (SFTBY – $29.89) – Buy under $25, target price $50

Small Tech
  Enovix (ENVX – $8.44) – Buy under $20; 4-year hold to $100+
  First Trust NASDAQ Cybersecurity ETF (CIBR – $58.53) – Buy under $60; 3- to 5-year hold
  Fastly (FSLY – $7.15) – Buy under $14; 3- to 5-year hold to $80+
  PagerDuty (PD – $18.17) – Buy under $30; 2- to 5-year hold
  QuickLogic (QUIK – $7.39) – Buy under $10, target price $40
  Rocket Lab (RKLB – $7.17) – Buy under $13, target price $30+

$20-for-$1 Biotech
  AbCellera Biologics (ABCL – $2.74) – Buy under $6, target $30+
  Akebia Biotherapeutics (AKBA – $1.37) – Buy under $2, target $20
  Compass Pathways (CMPS – $7.40) – Buy under $20, hold a long time for a 10x return
  Editas Medicines (EDIT – $3.91) – Buy under $6 for a double in 12 months and a long-term hold to much higher prices
  Inovio (INO – $6.69) – Buy under $14, hold a long time
  Medicenna (MDNAF – $1.54) – Buy under $3, first target $20, then maybe $40
  ScyNexis (SCYX – $1.63) – Buy under $3, target price $20, then $50
  TG Therapeutics (TGTX – $25.28) – Buy under $12 for buyout at $30+

Inflation
  A Short-Sale or REO House – ($415,400) – Hold
  Bag of Junk Silver – ($31.13) – hold through silver bull market
  Sprott Gold Miners ETF (SGDM – $31.07) – Buy under $28, target price $50
  Sprott Junior Gold Miners ETF (SGDJ – $36.54) – Buy under $39, target price $100
  Sprott Physical Gold and Silver Trust (CEF – $24.16) – Buy under $18, target price $30
  Global X Silver Miners ETF (SIL – $35.03) – Buy under $30, target price $50
  Coeur Mining (CDE – $6.91) – Buy under $5, target price $20
  First Majestic Mining (AG – $6.05) – Buy under $11, next target price $23
  Paramount Gold Nevada (PZG – $0.44) – Buy under $1, first target price $10
  Sandstorm Gold (SAND – $6.03) – Buy under $10, target price $25
  Sprott Inc. (SII – $42.41) – Buy under $40, target price $70

Cryptocurrencies
  Bitcoin (BTC-USD – $63,216.53) – Buy
  iShares Bitcoin Trust (IBIT – $36.01) – Buy
  Ethereum (ETH-USD – $2,445.02) – Buy
  iShares Ethereum Trust (ETHA- $18.67) – Buy

Commodities
  Crude Oil Futures – July 2026 (CLN26.NYM – no trades – June closed at $66.54) – Buy under $70; $200+ target
  United States 12 Month Oil Fund, LP (USL – $36.78) – Buy under $40; $100+ target
  Vermilion Energy (VET – $9.61) – Buy under $11; $24 target
  EQT (EQT – $34.73) – Buy under $35; $70 first target
  Energy Fuels (UUUU – $4.95) – Buy under $8; $30 target
  Freeport McMoRan (FCX – $45.14) – 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 – $228.87) – Expect to move back to Buy under $175 for new iPhones
  Meta (META – $559.10) – Expect to move back to Buy under $400

Publisher: GwynRose LLC, 5348 Vegas Drive, Suite 868, Las Vegas, NV 89108

New World Investor does not act as a personal investment adviser or advocate the purchase or sale of any security or investment for any specific individual. The recommendations and analysis presented to members are for the exclusive use of members. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time. Nothing in this presentation should be considered personalized investment advice. No communication to you by Michael Murphy or any of our employees or contractors should be deemed as personalized investment advice.

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