Wrestle, Dance, or Fight – it’s your choice. We can wrestle with a problem and find energy and possibility while doing it. Per Seth G: we can dance with something in order to find a mutual way forward. Or we can fight – which tends to be more brutal, final, and hurtful than productive. Don’t fight … because words matter.
Hope and Expectations are NOT the same things… Hope can fuel us, it be refilled, and it opens the door to possibility. Expectations (however) are a trap because they make us brittle and lead to disappointment. When we raise our hopes and lower our expectations, we establish a resilient way forward.
The Market:
The Face of Finance… Just as international relations have moved on from Henry Kissinger, we need to find the next Face of Finance? Is it Brian Armstrong from Coinbase or Charles Hoskinson from Cardano? Is it Lex Friedman, Vlad Tenev or Stephanie Kelton? We don’t know who will step up, but we do know that it’s time to move on. The financial industry is ready for fresh new faces, new role models, and new visions.
“Google (AI) has built three versions of Gemini… The largest, Ultra, is designed to tackle complex tasks and will debut next year. Pro, the mid-tier offering, will be rolled out starting this week into the Bard chatbot. This week, Nano (the smallest version) will begin to power features on its Pixel 8 Pro smartphone such as suggesting text responses in WhatsApp. Gemini is a Large Language Model (LLM) which is a complex mathematical system that can learn skills by analyzing vast amounts of data. By identifying patterns in that data, the LLM learns to generate text on its own. That means it can write term papers, generate computer code, and even carry on conversations.”
InfoBits:
- Over 70% of Americans are ‘doom spending’… to ease their anxiety levels.
- The real estate market is beginning to roll over... due to a ton of price cuts in winter-warm markets. This won't stop for a while.
- US Factory Orders in October… plunged the most since COVID lockdowns.
- Spotify is cutting 17% of its workforce… its third round of layoffs this year.
- Pending home sales just hit their lowest level in history… down 6.6% YoY, and ~10% below 2010 levels.
- Institutions ($3.6T) and retail ($2.2T) are building cash positions: When searching for a catalyst for higher stock prices – think about the ~$6T in money market funds that has missed this rally and needs to rotate into risk assets.
- The latest math scores for Americans dropped to all-time lows… equivalent to missing three-quarters of a year of learning.
- Moody’s cut China’s credit rating to negative… citing rising debt levels.
- X is licensed for payment processing in a dozen states... as Elon plans to turn X-Twitter into an app that will include its own payment system.
- How can the average American student’s grades be rising… and their international test scores be falling? Duh…
- Taylor Swift’s Eras Tour became the first to gross over $1B… as it generated ~$17m in revenue from each of its 60 concert venues at an average ticket price of ~$230/ticket.
Crypto-Bytes:
- Bitcoin is surging and… hodlers are refusing to sell.
- Bitcoin topped $40K this week… its highest level since April 2022.
- Crypto miners like Riot (RIOT) and Marathon Digital (MARA)… saw their stocks surge last week. Shares of Coinbase (the largest US crypto exchange) also rose.
- In Coinbase CEO’s Brian Armstrong’s eyes… Bitcoin can help traditional currencies like the Dollar, Yuan, and Euro shake off their inflation woes. Nations are warming up to crypto as their go-to inflation shield.
- Brazil’s largest lender has launched a crypto-trading service… initially focused on BTC and ETH.
- El Salvador’s bitcoin bet has turned profitable… with BTC soaring above $44,000.
- The crypto market is… up +106.68% YTD and +93.37% YoY.
TW3 (That Was - The Week - That Was):
Hopscotch: The crypto wallet you can talk to:
- Finally, crypto is: (a) simple to use and (b) easy to manage. With the Hopscotch wallet, simply type what you want to do. For example, "Convert 100 USDC to ETH on Polygon" and be presented with 1 button to make it happen.
- All you need is an email address to get started.
- Available on mobile and desktop -> Check it out:
AMA (Ask Me Anything…)
Good Riddance to VC Money-Ball… Per Howard L: during the 2012 to 2022 era, founders continued to take money off-the-table in interesting ways, and because of that – there are a ton of broken cap tables and zombie companies out. Throughout history some of biggest companies in world started off as being boot-strapped / highly capital efficient / (aka not taking VC investment capital):
- 1970’s: MSFT bootstrapped until pre-IPO,
- 1980’s: Dell bootstrapped until pre-IPO,
- 1990’s: eBay raised minimal $’s, and
- 2010’s: Instagram and WhatsApp remained lean.
Currently, we are in an era of higher interest rates and de-globalization. The art-and-creativityassociated with seed-stage company building – is back – and will cripple entrepreneurs who believe that the way to grow-a-company is to raise-more-money.
Next Week: Stuck in the Middle w/ the SPU’s…
Background: SPU is the original ticker for the S&Ps, and this week the S&Ps are stuck in the middle of a 50-point range.
Low VIX but high Volatility: The VIX (volatility index) is focused on 30-day volatility. The interesting issue we’re all living thru is that all of the movement is occurring in huge, hourly swings. For example, on Friday, within the same hour, we moved 50 S&P points – while we had a VIX in the 12’s.
Isn’t a good JOBS number – Bad for our FED? On Friday, we had a good JOBS number with 199,000 jobs being created, and a drop in the unemployment rate from 3.9% to 3.7%. I thought that a lot of JOBS being created and a drop in the unemployment rate were bad for our FED because they are inflationary? They are.
Risky Business and our FED: The probability of a FED Rate Cut at the March meeting is still ~44%, and at the May meeting has jumped to ~50%. To me, these numbers are absolutely shocking, but I’m firmly in the ‘higher-for-longer’ camp. We will learn more about this on Wednesday – with the latest FOMC announcement and the Q&A that follows. Our FED will be forced to play chicken with the market’s desire for rate cuts in 2024.
The Dollar and Bonds have reversed… We’re seeing a slight rally in the Dollar as it moves into the 104 area. Tip #1: Watch the Dollar over 105 – as that will cause the S&Ps some heartache and pause. Markets are nervous. Tip #2: If our FED comes out and denounces (out-of-hand) a March / May rate cut – these markets will fall instantly.
Watch Citi and LULU… (A) Citibank guided lower in their estimates for next quarter, but said that they would ‘buyback’ stock; therefore, their stock moved higher. Remember – they guided lower J. (B) Lululemon also had a rough quarter, guided lower, and used the ‘buyback’ word in order to move their stock higher. Tip #3: If our FED comes out hot and denounces a March / May rate-cut, ‘buybacks’ will become more costly and therefore both C and LULU should move lower on the news.
SPX Expected Move (EM):
- Last Week’s EM = $57
- Next Week’s EM = $65
TIPS:
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $2020/oz. & Silver @ $23.3/oz.
- 13-Week Treasuries @ 5.4%
- **Bitcoin (BTC = $43,900 / in at $4,310)
- **Ethereum (ETH = $2,350 / in at $310)
- **ChainLink (LINK = $16.30 / in at $7.78)
- AAPL – Apple = ($196 / in at $181)
- **COIN – Coinbase = ($148 / in at $125)
- **MARA – Marathon Digital = ($17 / in at $12)
- **RIOT – Riot Platforms = ($16 / in at $12.5)
- UEC – Uranium Energy Corp ($6.75 / in at $4.8)
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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