Tesla delivered 241,300 vehicles in Q3 2021. Tesla sold 102,000 (73%) more cars than it did in the same quarter of 2020. Compare that with General Motors and Ford where sales were down 33% and 27% respectively. Auto sales are down because there is a shortage of computer chips, brought on by a combination of the pandemic shutdowns and canceled orders due to anticipated drops in demand. Tesla was affected by that same chip shortage, but Tesla was able to substitute alternative chips and re-write their car’s firmware. In other words, Elon and the other employees at Tesla kept doing what they'd always done – adapt to a changing landscape and find ways to solve problems on the fly. It seems non-entrepreneurial Fortune-500 CEO’s consistently reject solutions that are outside their company’s immediate business model. It’s the entrepreneurial mindset that has permeated Tesla to the point that if you’re faced with something you don't know how to do – just learn how to do it. Tesla employees also believe that your successes and failures mainly result from things you do – not from elements thrust upon you. Kudos to Tesla for a job well done!
Post-college, do you want a job? Here are the Top 5 & Bottom 5 college majors by salary and unemployment rate:
TOP 5:
1. Architectural Engineering: Annual: $90,000, and 1.3% unemployed,
2. Construction Services: $80,000, and 1% unemployed,
3. Computer Engineering: $101,000, and 2.3% unemployed,
4. Aerospace Engineering: $100,000. And 1.9% unemployed, and
5. Transportation Sciences and Technologies: $86,000, and 1.8%
BOTTOM 5:
1. Clinical Psychology: Annual: $49,000, and 3.8% unemployed,
2. Composition and Speech: $42,000, and 4.9% unemployed,
3. Drama and Theater Arts: $41,000, and 4.5% unemployed,
4. Miscellaneous Fine Arts: $38,000, and 5.6% unemployed, and
5. Visual and Performing Arts: $35,500, and 3.6% unemployed.
The Market:
Would the real Jamie Dimon (CEO of JP Morgan) please stand up?
- Jamie Dimon recently said that he remains a bitcoin skeptic because: “It has no intrinsic value. Regulators will eventually regulate the hell out of it. Bitcoin will be around for the long term, but it’s like fool’s gold.”
- Jamie – need I remind you: (a) in February 2019, you started rolling out your own digital currency called JPM Coin, (b) in October 2020, you created a new unit within JPM for crypto-blockchain projects, and (c) in August 2021, you started giving your own wealth management clients access to crypto funds.
- Jamie, it sounds to me like you’re trying to talk Bitcoin lower so that you can buy more of it. Come on man…
Unlike equity markets, sporting events involve true uncertainty. There is no predetermined ending, but a ton of predictions. For these reasons, social scientists study sports to learn lessons about the human mind. If you turn on almost any sporting event, you will hear tales of heroes and villains. Sports broadcasters often use moralistic language like “clutch” and “choke” to explain outcomes. The broadcasters turn games into statements of character, but anybody who watches sports for long enough will notice that these morality plays do not age well. Many athletes or coaches who have been branded as “chokers”: Clayton Kershaw, Andy Reid, Phil Mickelson, Alex Rodriguez, and John Elway, have eventually won championships with “clutch” performances. So, in sports (just like in equities) history is NO predictor of future performance. But, if I were to pick some ‘clutch’ sectors moving forward:
- FinTech: There are no bad choices if you like a company capitalizing on the 24/7/365 digital financial markets and/or the constant disruption of global currencies due to interest rates remaining at zero.
- Healthcare: Healthcare data monitoring & aggregation companies such as: stress & depression mgmt., diet & exercise understanding, and sleep optimization will soon start driving healthcare costs lower.
- Online GDP: Gaming, e-commerce, and robo-financial decision-making (especially in crypto) – will all have the ability to be game-changers.
InfoBits:
- Centralization’s single point of failure… was clearly on display when Facebook’s entire operation went down for over 7 hours last week.
- Netflix soared to all-time highs… as Squid Game continues to be on track to become the company’s most popular show ever.
- Having a bad week? Connecticut Senator Blumenthal called on Mark Zuckerberg (CEO of FB) to act and take responsibility. “Mark Zuckerberg ought to be looking himself in the mirror today. But rather than take responsibility and showing leadership, Mr. Zuckerberg is going sailing… Mark Zuckerberg, you need to explain to Frances Haugen, to us, to the world, and to the parents of America what you were doing and why you did it.”
- Volvo, owned by the Chinese auto giant Geely… plans to raise $2.9B in an IPO in Sweden to accelerate its EV plans.
- JPMorgan is banning business travel for unvaccinated employees… and it will deduct extra pay from unvaccinated staff to cover COVID-19 tests.
- Oil cracked the $80/barrel mark for the first time in 7 years… and could hit $100 by winter. Small businesses especially will suffer due to high gasoline costs.
- Amazon-owned Twitch not only saw… its source code hacked and leaked online, but also revenue data on how much the various streamers were making.
- Tesla is worth 10X GM… even though it delivered 10X fewer cars. Tesla is a tech company – not like a carmaker. GM owns Cruise, and it’s gunning for its own sky-high tech valuation as an EV car maker tapping revenue streams like robotaxis and driverless delivery services.
- California passed a law requiring food-delivery giants… like DoorDash, Uber Eats, and Grubhub to pay out 100% of tips to gig workers.
- Gen Z accounts for half of the retail shoppers in the US… and a whopping $140B in spending power. 60% of Gen Z males use StockX, a sneaker-bidding marketplace where a rare pair of Jordans can cost over $500.
- Tesla is moving its headquarters from Palo Alto, Ca. to Austin, Texas.
- Google and YouTube will no longer allow digital ads bought on its… platform to appear next to online content that denies climate change.
- WeWork’s September revenue reached $228m… and occupancy rates improved. They’re prepping to list on the NYSE via a $9B SPAC merger.
- Global startups raised an all-time-high… $158B in Q3.
- The median price of next year’s California home is set be: $800,000.
Crypto-Bytes:
- Mr. Goax (crypto-trader) has earned 21% YTD: To trade his crypto portfolio, the hamster rotates the crypto trading wheel until he reaches his preferred crypto. He then leaves the crypto-wheel and signals his preferred path by running through either the ‘buy’ or ‘sell’ tunnel. Are you earning 21% YTD?
- Crypto is welcoming “Uptober.”
- Fueled by NFTs… Polygon’s count of unique daily active addresses rose to a record high of 566,516 on Saturday, surpassing ETH for the first time.
- Corporate NFT Partnerships: Last week, TikTok announced its first foray into the world of NFTs with “TikTok Top Moments” – a set of digital collectibles tied to short videos.
- Trading in NFTs climbed 700% in Q3 to $10.7B.
- Hive Blockchain, a BTC and ETH crypto mining company… reported its Q1 profit surged 10-fold higher than a year earlier.
- Our FED is set to release… its review of a potential central bank digital currency (CBDC) as early as this week. Chair Powell said that a CBDC would only launch if there are “clear and tangible benefits that outweigh any risks.”
- The Bank for International Settlements’ conclusion on CBDCs was… that a digital currency could have a manageable effect on the banking system.
- The Bank of England said crypto assets… are becoming more integrated into the U.K.’s financial system.
- Bitcoin broke above $50K this past week… and is now up 77% YTD. The boost is even more surprising considering China’s recent decision to ban crypto.
- SEC Chairman Gary Gensler told Congress… that the agency has no plans to ban crypto.
- Rep. Patrick McHenry (R-NC)… introduced a bill that would provide a “safe harbor” for crypto startups looking to raise capital through token sales.
- This year’s Forbes top 400 richest people… count 6 new Billionaires from the crypto world – up from just 1 last year.
- This week Bank of America proclaimed Bitcoin and crypto… “too large to ignore. Bitcoin is important, but the digital ecosystem is so much more.”
- The Federal Deposit Insurance Corp. (FDIC)… is studying whether certain stablecoins might be eligible for its coverage.
- Remittance giant MoneyGram… has partnered with Stellar and USDC for blockchain-based payments.
- The Mexican Stock Exchange is considering listing crypto futures… on its derivatives exchange.
- “There’s a huge opportunity out there to bridge two very different worlds – traditional financial systems and the new systems from a crypto perspective…” Moneygram’s CEO Alex Holmes
Last Week:
Monday: This downtrend is NOT what the bulls had in mind for the start of Q4. I still like energy and especially Uranium. England has said they have no choice but to rely on nuclear, and I think that's something that will resound around the world. I like URA > $25.45, CCJ > $23.25, DNN > $1.53, and UROY > $4.45.
Tuesday: Do we put our money to work chasing tech and hoping that we’re right? Or do we keep grinding with things that make fundamental sense like oil and energy. MRO and BTU are going great. How about SLB? I’m liking SLB > $31.58.
Wednesday: It’s all about 4,300 on the S&P. If we lose that on a closing basis, this market will implode. So, they will defend that level with all they got, and they have a lot. What’s weighing on the markets this morning? Everything:
- We have a civil war going on between the jabbed and unjabbed.
- We have teachers, firefighters, police, nurses and doctors walking off the job.
- We have ports loaded with product, but we can't seem to unload.
- We have Generals in China asking XI for the green light to go take Taiwan.
So, there are a ton of reasons for the market to be struggling, and only ONE for it to be up – our insider trading FED. Some tech is trying to remain strong, but there are undercurrents there. Facebook went down for hours, and while they say it was nothing nefarious – no one seems to believe that. Because of a "surprise" build in crude and gasoline, the oil patch is down today. We'll see a surprise draw down next week – so prices will come back. At 1:20pm the Republicans saved the day: “Mitch McConnell will offer a short debt limit extension.” From that moment on, the markets moved higher.
Friday: So, everyone is happy because they kicked the debt ceiling can down the road to December 3. Only in American can markets rally on the notion that going further into debt – on debts that can never be repaid – is a good thing. Today is jobs day, and with all of the Government unemployment assistance gone – people are probably going to have to face the idea of working again. September payrolls rose by 194k, wages were up 0.6%, and the unemployment rate fell to 4.8%. Everyone was a bit surprised it wasn't stronger, since the extra unemployment benefits went away. So, the first reaction was to sell the news. My guess is that they built a lot of market momentum yesterday, and today we ride it out flat.
TW3 (That Was - The Week - That Was):
Crypto has re-named October == Uptober. The difference in the crypto markets has a lot to do with the age of the average participant, experience level, and general attitude. Per HL: “Crypto is public venture capital, and the best investors need to rethink and ‘rewire’ themselves for the evolution.” Factually:
- 1. Analysts are optimistic that Bitcoin ETF approvals are finally approaching.
- 2. FED Chairman Powell clarified he has “no intention to ban” cryptocurrencies.
- 3. Inflation may be making BTC more enticing as a gold-like store of value.
- 4. And, the rapid adoption of the Lightning Network is helping Bitcoin scale.
Why does this matter? It was around this time last year, that crypto began its race from less than $11,000 to $60,000 in just 5 months. Crypto’s fundamentals are arguably stronger now than they were a year ago. More people are using crypto than ever before. Crypto is being used in more ways: from NFTs and DeFi to buying groceries in El Salvador and soon – Brazil. Place your bets.
Next Week: Where are the Dip Buyers?
Market Update:
- Sector Analysis and Expected Moves: For the week: the SPY gained / the QQQ’s were flat / the IWM was mildly lower / and the XLF and XLE exploded higher. The overall market is experiencing a fair amount of divergence, and therefore “Buying the Dip” will be extremely difficult through the end of the year.
- Volatility Check: The VIX abated under the 20, but market volatility is settling in. It’s becoming a more volatile market. If you need a hedge – act now or forever hold your peace. The VVIX is also just below 110 telling us that now is the time to re-hedge.
- Bearish Bonds threaten to Stall Markets: Bonds are seeing unbelievable volume right now, and have broken lower. This is pushing interest rates higher, and is showing no signs of abating. Tip #1: Do NOT step in and sell PUTS on the Bonds – as this could get quite serious.
- Energy gets a Scary Bid: Oil prices have steadily risen since September, and the XLE (Energy Sector ETF) has risen over 12% in a month.
Merry-Go-Round of Risks = Headwinds for the Dip Buyers
- China: The real estate crisis (EverGrande) is continuing to worsen as they will default on their bonds this weekend.
- The other RISKS that we will hear about are: (a) Interest Rates, (b) Inflation (leading to earnings decay) (c) our FED tapering, and (d) Supply Chain constraints into the Holiday season. These risk fears will continue to disturb the bond market. As long as the bond market has a downward trend, it will put pressure on big TECH.
- Lower Highs and Lower Lows continue to draw the Retail trader into the markets. So, if you want to “Buy the Dip” – be aware that the headwinds you’re going to feel via the BOND and other markets are quite severe.
Trade Opportunities:
- DOW Performance vs Goldman Sachs: The DOW is a price weighted index. Therefore, the highest priced stocks in the DOW get hit the hardest as the DOW declines. So, watch the United Healthcare (UNH +17% YTD), Goldman (GS +48% YTD), Home Depot (HD +27% YTD), and Microsoft (MSFT +35% YTD). I’m looking for a pullback in the DOW that will impact GS. Tip #2: On Goldman Sachs (GS) + BUY the Nov. $375 PUT and – SELL the Nov. $355 PUT. If the DOW breaks down over the next 40 days, GS will be a recipient of that downward momentum. This a lower probability / less expensive trade that can be used as an excellent hedge if the market place retreats.
- Watch out for an Energy Sector Pull Back: We’ve had 3 (almost 4) breaches of the expected move (higher) in the last 3 to 4 consecutive weeks within the XLF. That’s a ton of forward momentum. Tip #3: Looking for a small pullback in the XLF. Buy a Put-Spread out into November. I am NOT long-term bearish on energy, but rather just looking for a short-term pullback.
SPX Expected Move (EM):
- Last week’s EM was $89. We ended the week slightly higher.
- Next week’s EM is $80. We have a ton of options expiring this week, so I think we will move ‘at minimum’ $80 this coming week. We are in a downtrend, and therefore, I would NOT be Buying the Dip until further notice.
Tips:
HODL’s: (Hold On for Dear Life)
- Algorand (ALGO = $1.89 / in at $1.75)
- AMC – Holding
- Cosmos (ATOM = $35.18 / in at $33.18)
- Bitcoin (BTC = $54,800 / in at $4,310)
- B2Gold (BTG = $3.66 / in at $4.16)
o Waiting to sell CCs for income,
- Englobal (ENG = $2.48)
o Sold Nov. & Dec. $2.50 Calls for income,
- Ethereum (ETH = $3,550 / in at $310)
- Express (EXPR = $4.52)
o Sold Oct $5’s and Nov $5’s
- GME – Holding
- Grayscale Ethereum (ETHE = $34.75 / in @ $13.44)
- Grayscale Bitcoin Trust (GBTC = $42.34 / in @ $9.41)
- Grayscale Trust (GDLC = $34.30 / in @ $22.75)
- Hyliion (HYLN = $7.82 / in @ $0.32)
o Sold Oct. $10 CCs for income,
- Infinity Pharma (INFI = $2.71)
o Sold Oct $3 and Nov $3 Calls for income,
- Solana (SOL = $156 / in @ $141)
- Transocean (RIG = $3.92)
o Sold Nov. $4 Calls for income,
- Exela Tech (XELA = $1.65)
o Sold Oct $2 and Nov $2 Calls for income,
- Yamana Gold (AUY = $4.10 / in at $4.53)
o Waiting to sell CCs for income.
Thoughts: 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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