How do I like to communicate? In Person. That’s because it’s rare, and because face-2-face meetings are so genuine. Digital can be engaging, inspiring, and challenging – but there’s always something missing. Maybe it’s the handshake, fist-bump, or even the selfie – but there’s something rewarding, trusting, and honest about live. My favorite part of any live meeting is not the content or the decision-making – but rather the pre and post ‘off-the-record’ chats. Trust comes from listening to someone’s journey, and a huge part of my continued motivation.
“I just don’t want to play anymore…” said Magnus Carlsen – the #1 chess player in the world since 2011. He was asked: WHY he wouldn’t defend his world title. It’s simple really: Do what you love, and Love what you do.
What’s in a title? Is “To Kill a Mockingbird” a good title? Can you imagine trying to get that title approved by any risk/social compliance officer today? And yet, the title clearly worked. Starbucks has nothing to suggest its coffee roots, and Nike is easy to mispronounce – yet they both became household names. Your title is simply what you use when you referto some-thing or some-one. Your title is not you. 99% of the time – you will have to speak for yourself.
The Market:
High unemployment means… that most people still have jobs, and often – it’s a job that didn’t exist before they had it. Per SG: Jobs exist because people are productive. When someone produces more value than what they are paid – 2 others keep the difference. The customer gets part of the benefit, and the job’s producer gets the rest. Therefore, jobs are NOT niches to be filled, but rather opportunities for value to be created. Discover the value, and you found yourself a job.
Per Milton Friedman… “Inflation is made in Washington, because only Washington can create money. Inflation is not made by: consumers, producers, manufacturers or importers. Inflation is produced by too much government spending and too much government creation of money - NOTHING else.” Per AP: every time that the money supply grows aggressively, the inflation rate ticks higher. Growing the money supply is a necessary ingredient to rising inflation. The manipulation of interest rates, money printing, and asset purchases by our FED – have created inflation and a gamified market that will become more volatile over time. It will be stopped by a recession.
CEO salaries in 2021… were 231 TIMES that of the average employee. That is NOT a recipe for success or sustainability. If you’re wondering why +40% of our workers will change jobs within the next 3 months – you need to look no further.
InfoBits:
- Last month, U.S. business activity contracted (47.5)… for the first time in 2 years. A slowdown in the service sector drove the decline.
- The Euro Zone didn’t fare much better… contracting to 49.4 in July – its lowest reading since February 2021.
- Homebuilder sentiment fell to a 2-year low… as building permits for single-family homes declined to their lowest level since June 2020.
- Smartphone shipments fell 9% in Q2… causing speculation about whether this was Apple’s way of pre-announcing weaker than expected results.
- Apple and Goldman Sachs… are cutting their workforce, and taking other measures to cut costs and prepare for a further economic downturn.
- SoftBank halts plans for chipmaker Arm’s London IPO.
- V.P. Kamala Harris and Governors Gavin Newsom and Jared Polis… are positioning themselves in case Biden chooses not to run in 2024.
- Hulu is Disney’s fastest-growing streaming service… out-pacing Disney+.
- TikTok has started laying off staff as part of a company-wide restructuring.
- Bank of America sees… funds in full-capitulation mode. Investor expectations of economic growth and corporate profits are at their lowest level on record.
- France is renationalizing Electricite de France... as it looks to take complete control of Europe’s biggest nuclear power operator in a deal worth $10B.
- Europe has surpassed Asia… as the top importer of US oil. Our production isn’t growing fast enough to meet the needs of both continents and our own.
- In China, tanks are protecting some banks… as people continue to protest and demand their money back.
- Amazon bought One Medical for $3.9B… further expanding its reach in the health care sector. They will take advantage of One Med’s know-how, streamlined strategy, and roster of 8K+ medical / business clients.
- Baidu unveiled a new autonomous EV vehicle without a steering wheel.
- Snapchat shares fell 40%... after its awful earnings report. Ad-related stocks took a major hit on fears that declining online ad revenues is industry-wide.
- Twitter’s quarterly revenue declined for the first time since 2020… and swung to a net loss as it struggled to be an advertising destination.
- For Mark Cuban, “Shark Tank” has been good for business… but he has yet to profit from his investments on the show.
Crypto-Bytes:
- Tesla sold 75% of its Bitcoin holdings… but Elon said that it was about company liquidity more than the asset.
- Congress may rebuff U.S. regulators… who wanted stablecoins to be the exclusive territory of banks.
- Dubai unveiled a metaverse strategy… aiming to attract over 1,000 blockchain and metaverse firms as well as supporting more than 40,000 virtual jobs by 2030.
- Microsoft made it very clear… there will be no NFTs in Minecraft. The NFT model "can create models of scarcity and exclusion that conflict with our guidelines and the spirit of Minecraft."
- JPM and Citi said crypto demand among retail investors is improving… as the intense phase of deleveraging is over. Improved investor sentiment and increased demand before the Ethereum Merge have sparked a market recovery.
- Blockchain.com is cutting 25% of its workforce.
- South Korea postponed plans to tax crypto earnings until 2025.
- 3AC’s founders Kyle Davies and Su Zhu said… a series of bad trades were to blame for their fund’s catastrophic failure and loss of over $12.8B. The founders have been on the run, but reportedly plan to move the business to Dubai.
TW3 (That Was - The Week - That Was):
Tuesday: The euro jumped ~1% against the Dollar after a report that the ECB may consider raising interest rates by 50bps due to the worsening inflation backdrop. US retail gasoline prices fell below $4.50/gal. for the first time since mid-May. Housing starts fell 2% instead of rising 1.4% as estimated. Stock buybacks start up again on the 22nd, and somewhere north of $5B a day will be spent buying back big-company stocks. The NASDAQ has taken out its 50, and the DOW is right there – so we could run for a bit.
Wednesday: Yesterday was a powerful move; however, it lacked volume. The problem is that today starts a flood of earnings, and for the most part they're not going to be stellar. All 3 major indexes got over their respective 50-day moving averages, and held them into the close. The only thing standing in their way, is going to be reactions to earnings.
Thursday: The ECB just hiked interest rates by 50bps, so they can fight inflation. This is their first rate-hike in 11 years. That has bumped the Euro higher against the dollar.
Friday: Last night I saw several warnings across various sectors with SNAP posting a big miss, slow growth, and no guidance in the social media space. STX guided sharply lower in the chip related sector. SAM cut guidance in the beverage space. ISRG missed in the MedTech sector. SIVB missed earnings in the banking space, and COF missed in the credit card space. Markets have climbed a “wall of worry” all week, ignoring any warning signs of a broader consumer spending slowdown. History shows us that often the Friday and Monday ahead of a two-day FED meeting are down days. So, losing some altitude here wouldn't surprise me. We've just come through a couple good weeks for the market. Of course, everyone's preaching that the bottom is in and it's clear sailing. Maybe they're right, but I don't think so. I do think we're in a good bear market bounce, and it could surely go further.
AMA (Ask Me Anything…)
Is ETH off to the races again? Currently, 45% of ETH supply is in profit, but it reached lows of 27% (2020) and 23% (2018). There is a strong chance that the market will inflict similar pain levels during this bear cycle. Thus, it might pay to exercise caution at current levels. In the short term, ETH is likely to take out the liquidity levels at $1,700; however, for ETH to reach $4,000 is a stretch indeed. With the Proof of Stake (PoS) merge narrative taking precedence, Ethereum has entered a volatile phase. Until Sept. 19th (the proposed merge date) and in the absence of bullish catalysts for Bitcoin, Ethereum will likely lead the price action. Watch the ETH/USD and ETH/BTC pairs to understand the short-term market moves.
How high could Bitcoin surge? I think the BTC could make a quick run toward $24,000 and possibly $25,250. Those targets are only possible if Bitcoin breaks above its 200-week = $22,700. If the upside fails, we will hit $19k, and if that falls then $16,500 becomes achievable.
What are start-up entrepreneurs like? Here are some recent poll results for start-up entrepreneurs and early-stage investors:
1. Sports watched (in descending order): #1 = Basketball, Soccer, Football, Tennis, and #5 = F1 racing.
2. TV shows watched: #1 = The Wire, Silicon Valley, Sopranos, Succession, and #5 = Breaking Bad.
3. Books read: #1 = Snow Crash, Dune, The Lean Startup, Ender’s Game, and #5 = Moneyball.
Next Week: More Volatility is Coming…
- Our FED is back for an additional 75bp increase in rates… also the ECB raised their rates by 50bps. This should put us right back into the volatility box – reflected by the SPX breaking down through the 3931 level.
- Sector Recap:
o Next week we have our FED raising rates, mega-cap tech earnings, economic data releases (GDP, Consumer Confidence, etc.), an on-going interest rate inversion (2.97 vs 2.75 = recession coming), and geo-political saber rattling = a market accident waiting to happen. Increased volatility is somewhat of a no-brainer.
o The SPX, XLF (financials), XLE (energy), and QQQ (tech) all settled on the upper edge of their expected moves – with ultra-high correlation.
- Respect the move in SNAP… and how it reflects on Facebook and Google. It will only take one Google (@ $1.4T) – to take the entire S&P 500 apart.
- Fear the moves in T and VZ… when AT&T talks about eating $2B worth of consumer, un-paid cell phone charges == the consumer is ‘tapped-out’.
- Big week for tech earnings & a packed calendar… with AAPL, META, MSFT, FOMC, durable goods, monthly GDP, jobless claims, and Consumer Confidence.
- Dollar weakens, Bonds strengthen, and Equities weaken… The ‘fear trade’ will leave the Dollar. Bonds will be strong as longer-term rates continue to fall (inverted yield curve) – causing lower equities – driving volatility (VIX) higher.
- Metals could make a comeback… TIP #1: Due to the price action in the Dollar / $1,700 Gold – Buy the Sept. out-of-the-money (OTM) Call Spread.
- Watch for a VIX trade as low VVIX won’t last… TIP #2: If you’re going to buy volatility – now is the time. Buy the Sept. OTM $30 / $35 Call Spread.
- SPX Expected Move (EM)
o Last Week EM = $88
o Next Week EM = $97 … we continue to have $100 moves in a day - look at this as a sign that volatility is moving higher.
Tips:
SNAP and Verizon announced earnings that missed on every single metric and made me fearful of a contracting consumer. That hit other social media outlets, telecom, and advertising companies in sympathy. We’re racing towards a FED rate hike, in a slow economy, with lousy earnings, and worsening economic reports. Bank earnings were ‘meh’ at best. Add in some historical glitch days approaching our FED release, and you have a recipe for increased volatility. Play things cautiously - with controlled risk.
HODL’s: (Hold On for Dear Life)
- CASH == Nexo @ 8% on USDC, but wait for their acquisition dust to clear.
- PHYSICAL COMMODITIES == Gold @ $1,725 / oz. & Silver @ $18.66 / oz.
- AllBirds (BIRD = $5.11 / in at $4.82)
o Sold Aug $5 CC’s, and
o Sell Sept. $7.50’s when BIRD touches $6
- **BitFarm (BITF = $1.34 / in at $4.12)
o Selling more CCs for income,
- **Bitcoin (BTC = $22,700 / in at $4,310)
- **Ethereum (ETH = $1,600 / in at $310)
- GME – DRS’d and HODL
- **Grayscale Ethereum (ETHE = $11.09 / in @ $13.44)
- **Grayscale Bitcoin Trust (GBTC = $14.48 / in @ $9.41)
- Innerscope (INND = $0.0104 / in at $0.0052)
- SPY: Bot Aug 29: $385 / $375 PUT Spread for $2
- XHB: Bot Aug 19: $60 / $58 PUT Spread for $0.82
** Denotes a crypto-relationship
Trade of the Week: TIP #3 = INND is not a $10 stock. It’s a 3-cent stock that went sub penny. If the FDA rules within 30-days, that non-medical hearing aids can be sold over the counter – the buzz could take INND to $0.10. It has sales deals with major corporations and could move in short order (this week doubled = $0.0046 to $0.01)
Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
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