Retire… and Do What? Paul McCartney once wrote: “Will you still need me, Will you still feed me – When I’m Sixty-Four?” But what if retirement no longer makes any sense, maybe (instead) we just move on to our next gig. What if we place the idea of retirement on the same shelf as: Pac Man, rollerblades, and the Walkman. Heck, the reason our economy is so strong is because NOBODY retires – nor should they. The retirement paradox includes: living, being a part of the largest buying group, thinking, and having purpose & meaning. Nothing pushes a 24-year-old more than a 64-year-old who outworks them. Don’t Retire… just Turn-the-Page.
The results are in… smartphones have made our kids: sedentary, solitary, anxious, and depressed.
Maintaining your edge… As an organization grows, the uniqueness that was originally instilled by the founders moves toward average. That’s because each new customer, supplier, and employee requires something a little more normal – more often. The drift to normal can only be countered by moving away from scaling.
If asset prices have risen despite the tighter financial conditions… then: “What happens when loose monetary policy returns and global liquidity begins to grow aggressively – again?” The answer is that asset prices will take off, just as we saw in 2020 and 2021. How can our FED be excited about pivoting back to a loose, monetary policy given where the stock market, bitcoin, and gold currently are. Asset prices being at all-time highs during tight conditions – spell disaster for preventing euphoria and speculation when the macro environment improves. Let the games begin.
The Market:
The ART of Building Trust… is everywhere – it doesn’t just include: making a cool demo, sending someone your deck, or delivering a set of bullet points. YOU build trust in YOU. It’s all about YOUR detailed explanation of the idea. Relationships, Tension, and Change are all catalysts for action. And all of those catalysts are based upon Trust.
Are you a Spectator or a Participant? Hint: If you’re not willing to be wrong, then you’re just a spectator. An entrepreneur’s journey is littered with entrepreneur voyeurs.
OpenAI is making moves… to partner with the entertainment industry by pitching its video generation tool (Sora) to Hollywood studios, directors, and talent agencies. It seems that despite Hollywood unions securing a deal on AI protections, there remains a significant amount of uneasiness surrounding OpenAI’s possibilities. After all, OpenAI just announced their ability to duplicate anyone’s voice using just a 15 second clip. So, mark my word, AI’s path forward won’t be without some kicking-n-screaming within our traditional industry structure.
InfoBits:
- Insider selling reached 3-year highs as:
o Jeff Bazos sold $8.5B of AMZN,
o Peter Thiel sold $175m of Palantir, and
o Zuckerberg sold $135m of Meta.
- Florida is banning social media sites… for those under 14, and is requiring parental consent for 14 and 15-year olds.
- WeWork’s former CEO Adam Neumann... has submitted a ~$700m offer to buy WeWork out of bankruptcy. Why is this news?
- March’s FED Manufacturing data showed… business conditions worsening – marking the 23rd consecutive month in contraction territory.
- Another one bites the dust… EV maker Fisker is losing partners, customers, their NASDAQ listing, and money.
- Luxury retailers struggle… as Canada Goose cuts 17% of staff.
- 3 large investors in TikTok… General Atlantic, Susquehanna International Group, and Sequoia Capital - are facing increasing scrutiny from regulators.
Crypto-Bytes:
- Sam Bankman-Fried got 25 years in prison… If he had shown any remorse, a hint of contrition, accepted responsibility, and/or stopped blaming others… maybe he would have gotten the 6.5 years his attorneys wanted.
- “Our government can't stop spending money. Fiscal irresponsibility is the legacy that Donald Trump and Joe Biden leave behind. Until our government stops spending, Bitcoin will keep going higher.” … Mike Novagratz / Galaxy
- “Last year our Bitcoin bull case was $1.5 million/coin. With the SEC green light and if institutions allocate ~5% of their portfolios to bitcoin – we would add an additional $2.3 million/coin to that projection.” … Cathie Wood / Ark Invest
- “My dead clients (with Bitcoin) are doing better than my living ones... So, act like you're dead, and NEVER sell Bitcoin.” … Anthony Scaramucci / Skybridge Capital
- “Bitcoin is our #1 crypto priority. People buy a little Ethereum, but very little else.” … Robert Mitchnick - Head of Digital Assets for Blackrock.
- Bitcoin’s next halving is expected on ~April 19th… and is the most anticipated crypto milestone of 2024 – after the BTC ETF approvals.
- Around the world… London is planning a May listing of BTC and ETH exchange-traded notes for professional investors. Thailand now allows their wealthy to invest in crypto ETFs, and El Salvador is still buying Bitcoin.
TW3 (That Was - The Week - That Was):
Thursday: Charlie B. wrote: "The S&P 500 closed at another all-time high today, its 21st of the year. Over the last 12 years, the S&P 500 has hit a record 368 all-time highs."
Here’s another dose of reality:
1. 401k hardship withdrawals hit all-time highs = triple the pre-pandemic rate.
2. 1 in 7 Americans have a loan against their 401k – with the funds going to avoiding foreclosure and/or paying medical bills.
3. Household debt hit another all-time high, and credit cards are still charging 24%.
4. Approximately 150 large tech-companies have had significant layoffs YTD.
Morgan’s Moments…
If you need a ‘low cost’ AI helper … try:
- RenderNet-AI: A consistent character image generator = https://rendernet.ai/
- Creatie-AI: turns ideas into stunning designs = https://creatie.ai/
- Jack-AI: AI Marketing = https://supertools.therundown.ai/content/jack-ai
- Zapier-AI: An intelligent AI-powered chatbot = https://zapier.com/ai/chatbot
- Vetted-AI: AI shopper - best products at the best prices = https://vetted.ai
Who wins a debate between a human and GPT-4?
- If GPT-4 knows your background, it wins the debate ~82% of the time.
- Without your personal information, GPT-4 still wins – but to a lesser degree.
- This substantiates the growing concern that AI chatbots could be weaponized to effectively spread targeted, personalized propaganda at scale.
Crypto Tips:
- Aerodrome Finance (AERO) above $0.60,
- Velodrome Finance (VELO) above $0.22 w/ targets of: $0.33, 0.52,
- Neon (NEON) above $2.10 w/ targets of: $5.70, 8.60, and
- Chainlink (LINK) above $16.
Next Week: “It’s a Good Time to Hedge…”
Background: The S&Ps closed up +3.1% in March, placing them up 10.2% YTD (10.6% including dividends). With markets calmly drifting higher, implied volatility (i.e. the price of options) has been moving lower. Investor allocations to defensive stocks are at all-time lows. 82% of traders expect a small correction, but are calmly looking at it as a buying opportunity rather than as something to hedge. The average stock (a small cap) has seen record underperformance, and honestly – they’re cheap for a reason, as 28% of small caps have yet to make a profit.
There was NO End-of-Quarter volume. We started the week at 5234 on the SPX and ended at 5254 – so basically unchanged. The Nvidia / tech gamma-squeeze did not make an appearance. All of the Q1 gains basically came from: NVDA +90%, META +40%, and AMZN +20%. The Q1 underperformers included: GOOGL +9%, TSLA -30%, and AAPL -8%. It seems that every ounce of market cap that Apple lost – found a home in Nvidia and Meta. It’s hard to believe that the S&Ps gained 10% in a quarter where AAPL lost -8%.
Higher degrees of correlation are hitting the marketplace. During the entire tech rally, we had (at best) a 50/50 advance/decline correlation. Now, we’re regularly seeing a 75/25 correlation. Tip #1: With volumes and complacency this low and correlations this high - this market is readying itself for higher degrees of selling.
Watch the Financials (XLF) and Energy (XLE)… as the Financials have gained 34% since November, and Energy (which is incredibly inflationary) has gained 19% YTD.
Tip #2: Watch Retail, specifically WMT (+23%) and COST… as both are excellent barometers of J.Q. Public. Both stocks are moving lower right now, but watch them going forward for further economic head-winds.
Tip #3: It’s time to hedge the portfolio… because there’s change in the air due to: complacency, low volume, low volatility, and a non-existent, technology gamma squeeze. I’m doing this by Selling Out-of-The-Money (OTM) Call Options (spreads) and Buying some inexpensive OTM Put Options (spreads) between 60 and 90 days out.
SPX Expected Move –
- Last week: $54.11 (4-day week), and we gained all of $20.
- Next Week: $62.52 (5-day week)
TIPS:
HODL’s: (Hold On for Dear Life)
- 13-Week Treasuries @ 5.3%
- PHYSICAL COMMODITIES = Gold @ $2166/oz. & Silver @ $24.8/oz.
- **Bitcoin (BTC = $69,900 / in at $4,310)
- **Ethereum (ETH = 3,500 / in at $310)
- **ChainLink (LINK = $19.1 / in at $7.78)
- **COIN – Coinbase = ($265 / in at $125)
- **MARA – Marathon Digital = ($22.4 / in at $12)
o Sold June $40 Covered Calls
- **IBIT – Blackrock’s BTC ETF ($40.4 / in at $24)
- INDA – India ETF ($51.5 / in at $50)
o BOT Nov, +$53 / -$55 CALL Spread
- LUNR – Intuitive Machines: ($6.25 / in @ $6.40)
o SOLD: June $7.50 Covered Calls
- **RIOT – Riot Bitcoin Mining ($12.3 / in at $12.5)
o Sold June $25 Covered Calls
- **MATIC – Polygon ($0.99 / in at $0.94)
- Various Bull Call Spreads:
o RS – Reliance Steel: Sept = BOT $350 / SOLD $370
§ Now @ $7.70 – in @ $6.20
o NUE – Nucor Steel: Jan. = BOT $220 / SOLD $240
§ Now @ $5.60 – in @ $5.35
o MARA – Marathon Digital: Jan. = BOT $25 / SOLD $50
§ Now @ $4.22 – in @ $3.50
o XLE – Energy: April = BOT $92 / SOLD $94
§ Now @ $1.30 – in @ $0.90
** Crypto-Currency aware
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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