“Now that’s a Big Idea!” But don’t worry – no one is going to steal it. According to SG, one thing big ideas have in common is that they’re almost impossible to give away. I remember when: you could have bought Amazon stock for lunch money, financed part of Spike Lee’s first movie for a song, had front row seats to Hamilton for $5, and even bought Bitcoin for $2. It’s funny, even company insiders usually take cash instead of stock options. When big ideas show up, almost no one sees the possibilities. They only see: risk and wonder how failure will affect their career(s). So, don’t worry about someone stealing your Big Idea – if it truly IS a Big Idea.
“Well that’s seeing the glass half-full.” Generally, we are prone to being either optimistic or pessimistic as our first response to an external event – independent of knowing the facts surrounding the event. Optimism is a problem-solving tool – often used to bring enthusiasm, inspiration, and hope to a project. Pessimism is a tool that accompanies budgeting and scheduling. Optimism will be infectious, and cause increased focus, energy, and solutions. Pessimism is often used to enforce accountability and timeframes. Use your tools wisely.
“Will this be on the test?” This is a cornerstone of traditional education because it’s so effective at confinement. Over the years, we’ve spent a lot of time rewarding the status quo. Consider the following:
Follower vs Leader
Copier Innovator
Authority Responsibility
Competition Co-Operation
Comply Invent
Answer Ask
Correct Possible
Fast-growing organizations are looking for those people who have the second column of skills, but work very hard at encouraging the first. What words are on your resume?
The Market:
Graham Duncan coined the phrase “Time Billionaire”. The idea is that time is the only asset in the world that can’t be purchased. Warren Buffett is worth over $100B, but young people will not switch lives with him – if they had to be in their 90s. It’s because of Time, that young people view themselves as being wealthier than Warren Buffett.
Data from China is showing inflation running 13.5% YoY – the fastest pace in nearly three decades. This is adding to concerns that supply chain disruptions, record high energy prices, and loose central bank policies will stoke consumer price pressures well into next year. The real issue with inflation is that it can be a self-fulfilling prophecy. The mere expectation of inflation – makes inflation worse, and causes prices to rise unnaturally. If people expect higher prices, they're more likely to demand higher wages and accept inflated costs. Our 3-year inflation targets are 4.2% - the highest in decades. Economists believe that inflation will remain elevated long after supply bottlenecks ease.
InfoBits:
- Peloton announced a hiring freeze… and the stock fell 35%. Peloton has grown at an insane rate over the past year, and as Americans return to the gym – Peloton has some soul searching to do.
- US EV sales soared 57% YoY… and the Biden admin wants to extend the $7,500 EV tax credit and build more public charging stations.
- Nextdoor, the social media app for neighbors… will go public via a SPAC at a $4.5B valuation.
- General Electric is breaking itself into 3 publicly traded entities… one for aviation, one for healthcare, and one for its power business.
- Twitter rolled out a new subscription service, Twitter Blue: For $3/mo. you can undo tweets, create a custom navbar, and access ad-free articles from the Washington Post, LA Times, Rolling Stone, etc. Twitter plans on using the fees to help “fund journalism” – and to build out their crypto team.
- Apple will need to allow app developers to link out to alternative payment websites… enabling software companies to eliminate / reduce the 15% to 30% fee that Apple charges through its App Store.
- Rivian, an electric truck maker… went public this week. It was founded in 2009 by MIT graduate R.J. Scaring. R.J. only has a 2% ownership stake in the company with Amazon owning 20% of the business. I wonder who’s in control?
- ADT, the home-security company… is buying solar-panel company Sunpro Solar for $825m – in order to offer rooftop energy systems to its customers.
- Panera will return to the public markets again… via Shake Shack’s founder Danny Meyer’s SPAC.
- Keeping up with China… U.S. consumer prices jumped 6.2% in October – the largest inflation jump in over 30 years. Unfortunately for the working-class, inflation is closer to triple that number due to what people actually purchase.
- Disney+ gained 2.1m subscribers last quarter… the smallest increase since Disney+ launched two years ago.
- Beyond Meat is proving that novelty builds brands… just not loyalty or sales. Due to low sales, Dunkin dumped Beyond, McDonald’s is only serving Beyond’s “McPlant” burgers in 8 of its 14,000 locations, and KFC has not given Beyond’s chicken nuggets a permanent spot on its menu as of yet.
- In less than 75 days, student loan payments will resume… to over 43m borrowers – as over 70% of U.S. college-grads have student loans to deal with.
- Tesla just increased the price of its Model Y… for the 8th time this year. And Elon sold over $5B worth of his Tesla stock. I guess I buried the lead… again.
Crypto-Bytes:
- Solana can’t stop moving higher… just this week it rose over 30% to $258. It surpassed the market capitalization of Tether – the world’s #1 stablecoin.
- The new infrastructure bill contains a crypto tax requirement: It expands the definition of “broker” to potentially encompass crypto-entities that don’t actually facilitate transactions. “Here’s yer sign.”
- X-Citigroup CEO Vikram Pandit said: “In the coming year, every bank and/or securities firm is going to consider enabling crypto trading.”
- Huobi Global will move its spot trading services to Gibraltar… after receiving approval from the FSC to begin the transition.
- Sequoia Capital is backing a 7-figure token round… for DeFi lending project Parallel.
- Apple CEO Tim Cook has disclosed he owns cryptocurrency… “as part of a diversified portfolio,” but that it is not indicative of Apple having crypto ambitions.
- Ripple will launch the “Ripple Liquidity Hub”… allowing access to BTC, ETH, LTC, ETC, BCH and XRP from a range of global exchanges, market makers, and OTC desks.
- Per the ECB, Central Bank Digital Currencies (CBDCs) will probably… become legal tender in the jurisdictions of their issuance. That would give generic fiat monies an edge over private payment options.
- The Swiss National Bank… should be ready to launch a Central Bank Digital Currency (CBDC) in January, 2022 – using their new Six Digital Exchange.
- Coinbase trading volume was down… and it signaled a pivot from Bitcoin and Ethereum – to altcoins and tokens that captured 60% of the volume. Total assets grew by 41% YoY as crypto fans are HODLers.
- Major game publishers are considering NFT gaming. Electronic Arts called NFTs an “important part of the future of our industry.” Square Enix recently experimented with anime-based NFT digital trading cards that sold out in a day.
- NYC’s mayor-elect Eric Adams… wants schools to offer crypto education.
- OVER $3T… was the total value of the crypto market on Monday – an all-time-high.
- 49% of millennials… are more than “somewhat comfortable” owning crypto.
- 13 years… is the age of Satoshi Nakamoto’s Bitcoin 7-page, whitepaper – which outlines the core mechanics of cryptocurrency.
- Twitter is launching a dedicated cryptocurrency team… and has already integrated BTC Lightning. It plans to integrate NFT functionality, and is working on a decentralized social protocol called Blue Sky.
- The City of Miami will give out a “bitcoin yield” to its citizens… which comes from the staking of the city’s own cryptocurrency – Miamicoin. It was introduced early this year and has earned over 20% of Miami’s total tax revenue.
Last Week:
Monday: Gold and silver caught a bid last week, and if that continues, there is no shortage of beaten down miners to watch. IAG comes to mind. Chips remain strong and I’ll be watching: AMD, LRCX, NVDA, and NXPI. Remember BTU? I’m watching those purveyors of dirty, smelly coal. After running up to $20, the air came out and they drifted back down to $11. They should start inching higher as China is devouring every lump of coal they can find. I like BTU over $11.76 and IAG over $3.08.
Tuesday: GE is splitting into 3 separate companies. NVDA has teamed up with LAZR to work on self-driving vehicles. I think uranium stocks will have legs. CCJ is my favorite, followed by: UEC, DNN, UROY, and UUUU.
Wednesday: Gold and silver are catching a bid because of the horrendous PPI reading that showed raging inflation. I could be interested in HL over $6.54. I also like: IAG > $3.21, DRD > $9.78, and AUY > $4.51. If you take one of these, babysit it. I'm still wondering if T is trying to put in a bottom here?
Thursday: Yesterday they hated materials like: AA, RIO, VALE, FCX, & BHP. Today, those same names are on fire. I like uranium, materials, and energy. I just don't like gap ups all that much. That said, I like UUUU > $11.12, and UROY > $5.85.
Friday: On the heels of GE splitting, JNJ says they will split into 2 companies. An insider at AT&T (T) bought $500,000 worth of it – so keep an eye open for a move.
TW3 (That Was - The Week - That Was):
“How do you buy crypto?”
- 4 years ago, my answer was: “Open a Coinbase account and buy Bitcoin.”
- 2 years ago, it was: “Open a Coinbase account and buy Bitcoin and Ethereum.”
- Per FW, a year ago it became: “Open a Coinbase account and buy a diverse set of crypto assets.” Those crypto assets could include:
o Layer One blockchains: Bitcoin, Ethereum, Solana, Flow, Avalanche, Polkadot, and Algorand,
o Some major Defi protocols like: Uniswap, Aave and Compound,
o Some storage protocols like: Filecoin and Arweave,
o Some telecom protocols like: Helium,
o Some Layer 2 protocols like: Stacks and Polygon,
o Some gaming assets like: Axie and Decentraland,
o And a couple NFTs – just for grins.
“Who will be the 1st politician to accept their salary in Bitcoin?” That was asked by Bitcoin influencer A. Pompliano. Miami mayor Francis Suarez said he’d take his next paycheck fully in BTC. Two days later, New York mayor-elect Eric Adams replied that he’d take his first 3 paychecks in BTC. In quick succession, mayors from Jackson, TN and Tampa Bay, FL hopped on the bandwagon. The crypto industry is booming, with an unprecedented $15B in fundraising so far this year – and cities across the country are hungry for the crypto worker. Adams came back with: “NYC will be the center of the cryptocurrency industry – you just wait!”
“Who knew NFTs would be a $10B industry…” and everyone from Hollywood to fast-food franchises are looking for ways to participate. Gaming is an especially natural fit as developers of some of the world’s most popular games embrace crypto and incorporate NFTs into their games. Gamers could eventually onboard a massive audience to the crypto-economy as there are over 3B gamers worldwide.
Next Week: Is Big Tech all that Matters?
Tech Continues to Dominate:
- The S&Ps were unchanged for the week – leaving ‘big tech’ to dominate once again. The stocks that are moving the markets are the top 10 ranked by: Market Cap * Implied Volatility. At the top of that ranking are: Tesla and Nvidia. The ‘monsters of tech’ have grabbed hold of this market, but even MSFT, FB and AAPL are asking: “What are Tesla and Nvidia doing?”
- As long as we’re under the ‘spell’ of technology, market internals don’t matter.
Inflation, CPI, and Consumer Sentiment:
- The CPI number (inflation) came out ‘hot’ – to the tune of 6.2% inflationary hot. Consumer sentiment came out later in the week, and it was very poor indeed.
- They were buying Bonds this past week, as the TLT finished toward the lower end of its expected move – which pushed rates higher. Gold, the Dollar, and crypto all moved higher. Everything tracked toward a risk-off environment.
- But then the JOLTS number (which measures the number of people who quit their jobs) came out. It showed us that 6% of the entire workforce quit their jobs in August and September. That’s incredible given the current flight to quality going on within the markets. Where did the 6% go?
Volatility Update:
- VIX = The current volatility index (VIX) is at 16.29. 39 days from now the experts are predicting the VIX to be 25% higher == 20.12. The 67-day volatility is 22, so Tip #1: Continue to sell SPX and SPY premium +60 days out.
- The VVIX continues to be above 110. We are currently seeing one of the highest SKEW readings (ratio of Put buying to Call buying) over the past decade. So, FEAR is out there – it’s being clouded by ‘happy talk.’
Markets are Operating at a Fever Pitch:
- Tip #2: Watch the options market volume. In 2020, the average option volume was 34m contracts / day. In 2021, it’s been 39m per day. In November of 2021, it’s averaging 46m per day. It’s not a complete stretch to think that the 6% of the workforce that quit – are now at home trading options.
- The options market is driving all of this tech madness. Over half of the options bought in Tesla and Nvidia were purchased by retail traders / using market orders / ‘at the ask or above’.
SPX Expected Move (EM):
- Last Week’s expected move was $62.50, and although we ended flat – during the week we actually broke thru the lower edge of the expected move.
- Next Week’s expected move is $60.41. Expect much of the same volatility, because we will also have a monthly options expiration day to contend with.
Tips:
HODL’s: (Hold On for Dear Life)
- Activision (ATVI = $69.69 / in at $65.41)
- **Algorand (ALGO = $2.11 / in at $1.75)*
- AMC – Holding
- *BitFarms (BITF = $8.51 / in at $5.12)
o Sold Nov, Dec, Feb, May and Dec: $5, $7.50 and $10 Calls for income,
- **Cosmos (ATOM = $32.80 / in at $33.18)
- **Bitcoin (BTC = $64,000 / in at $4,310)
- Energy Fuels (UUUU = $10.96 / in at $11.29),
o Sold Dec $11 Calls for income,
- Englobal (ENG = $2.41)
o Sold Nov. & Dec. $2 and $2.50 Calls for income,
- **Ethereum (ETH = $4,600 / in at $310)
- GME – Holding
- **Grayscale Ethereum (ETHE = $45.77 / in @ $13.44)
- **Grayscale Bitcoin Trust (GBTC = $51.47 / in @ $9.41)
- Hyliion (HYLN = $7.80 / in @ $0.32)
o Sold Nov. $9 CCs for income,
- **Solana (SOL = $237 / in @ $141)
- Uranium Royalty (UROY = $5.50 / in at $4.41)
o Sold Nov and Jan $5 Calls for income,
- Yamana Gold (AUY = $4.48 / in at $4.53)
o Waiting to sell CCs for income.
** Denotes a cryptocurrency
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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