“I’m all in…” It’s easy to get hooked on the philosophy. It produces an infinite supply of competition, and goals that are constantly out of reach. The entrepreneur (on the other hand) is always looking for the customer where their product / service can make a difference, and they can end-the-day satisfied. Entrepreneurship is NOT an All-In or Hibernation experience, but rather one measured by how we handle transitions and variations. Learn to gauge yourself on the contributions – not the adrenaline.
“I can see the enemy…” It seems that situations now-a-days always call for an opponent because having an enemy serves to focus our attention. For many people the enemy is the authority figure, maybe another super-power, or potentially a co-worker. My advice = pick your enemies carefully because you may be picking your future.
“A Day of reckoning is coming…” Bear markets destroy the ill prepared. Learn how to: trade less, trade with small size, and watch for new leadership. Per JB: “The S&P finished the month below the 200-day for the first time in 2 years. Higher volatility is the new normal. Virtually all of the S&P’s 50 best and worst one-day returns occurred while it was below its 200-day.” 3 trading ideas to remember:
- (a) Things are not cheap because they are down 70%,
- (b) Companies will forever be valued on FCF (free-cash-flow) and earnings, and
- (d) The Quality of a company’s revenues and earnings really does matter!
The Market:
- Worker productivity… fell 7.5% in Q1 – the fastest decline since 1947.
- Worker labor costs… soared 11.6% inn Q1 - the fastest in 40 years.
- People are behaving like deer in headlights… because they believe we’re just experiencing a healthy, downward BLIP in the markets.
Paul Tudor Jones… “I can’t think of a worse investing environment than right now. Our FED is raising interest rates in the face of worsening financial conditions.”
Per HL… “There is no returning to normal. We are living in a manipulated, FED-run market. If you think people were pissed when they had to pay more money for the same everyday items WHILE their investment portfolios were increasing in value – just wait until you see their reaction when their investment portfolios are losing money and prices are still high.”
Per DT… “I don’t think the FED has a winning hand to play. It is impossible for any group of humans to navigate an economy between high inflation and recession using simply interest rates and contracting the money supply. Free markets solve that problem, but we no longer have free markets anymore.”
It seems: “The only way to win is … not to play”… Joshua … War Games.
InfoBits:
- Rest-In-Peace selfie sticks… Snap is launching a mini drone called Pixy that follows you around snapping pics before landing back in your palm.
- May the Fourth be with you… a Vegas chapel celebrated Star Wars Day with wedding packages dubbed: “I Chewse You”, and with Princess Leia officiating.
- Streaming with Ads has something for everyone… consumers love the price, advertisers love the targetability, and media companies (like FOX) love the back door into the streaming race. Disney+ and Netflix are considering it.
- US job openings hit a record 11.5M… showing continued tightness in the labor market. At the same time, another 4.5m Americans quit their jobs, seeking more flexibility and higher pay.
- Hold on to your sweatpants… offices are becoming optional. Work-from-anywhere is now a perk among workers and a hiring strategy for flexible employers that could inspire an applicant to work for Airbnb instead of Apple.
- About 150k Ukrainians are using SpaceX’s Starlink Internet Service… and that makes it harder for Russia to interfere with Ukrainian communications.
- Meta (FB) said in an internal memo… that it is pausing hiring for the rest of the year.
- California's population fell last year… triggered by San Jose losing over 1m residents.
- 3 months after Wordle’s sale to The New York Times… the paper announced that the game created over 10m new readers of The Times.
- The Bank of England hiked rates… to 13-year highs, and sees inflation hitting 10%.
- #Shrinkflation… Frito Lay took chips from each bag, Mondelez rebranded Oreos as “Limited Edition”, and Pepsi shrank its Gatorade bottles.
- U.S. homes are overvalued… and could fall by 10% over the next few years.
- Spending like it’s 2019… as consumers return to their pre-pandemic spending behavior. U.S. ecommerce sales have dropped 3X compared to 2020 levels.
- Budweiser saw quarterly profits nearly double.
- April’s global VC funding… reached its lowest level in the past 12 months. The dip isn’t massive, but does signal the start of a longer-term shift – particularly applicable to later stage companies.
Crypto-Bytes:
- Yuga Labs, the startup behind the popular Bored Ape NFT series… sold >$300m of virtual metaverse real estate. There was so much demand that they crashed the ETH network.
- MicroStrategy is offering employees access to Bitcoin retirement plans.
- Major BTC investors authored a letter sent to the EPA… aiming to defend bitcoin mining and discuss the misconceptions about its environmental impact.
- FIFA has selected blockchain and cryptocurrency platform Algorand… as its official partner before the World Cup in Qatar in November.
- Argentina’s Banco Galicia has launched a crypto trading feature… that will now allow users to buy and sell bitcoin, ETH, USDC, and XRP. The feature will not allow users to withdraw or send crypto.
- SEC member Hester Pierce voiced her opposition… to the regulatory agency’s plans to bring on 20 people to its new crypto enforcement division.
- Coinbase ended talks to buy Mercado Bitcoin… a Brazilian crypto exchange backed by SoftBank and Tribe Capital.
- Coinbase’s new marketplace for NFTs is now officially open to all… and off to a very slow start.
- Binance, Sequoia Capital, Fidelity and 16 others… are committing $7B to help finance Elon Musk’s $44B purchase of Twitter.
- The New York bill aimed at curbing proof-of-work crypto-mining… is facing opposition from industry leaders, lobbyists and lawmakers.
- Gucci plans to accept crypto as payment.
- Analyst Marcus Sotiriou said… “If we do go into a recession and see growth slow significantly, our FED will be forced to become less aggressive and adjust their monetary policy so bitcoin and crypto will be able to rise again.”
TW3 (That Was - The Week - That Was):
Tuesday: We are in ‘deeply-oversold’ territory on any short-term scale. That means that anything perceived as good news, could squeeze this market violently higher like a beachball being held underwater. So, you can expect that at some point, we will start roaring higher. The staying power will be questionable, but it could be dramatic for a couple days. The FED starts its 2-day FOMC meeting today, and we'll hear their decision tomorrow. I feel we may get a fairly strong sideways and up rally after the FED meeting that could last a few weeks or so. But ultimately, in the months farther out – I think we have much lower to go.
Wednesday: May the 4th be with you! Oil prices are rising over 3% on reports that the European Union intends to ban Russian crude imports over the next 6 months and refined fuels by year-end. The FED announced it would raise interest rates by 50-bps and begin to shrink its $9T asset portfolio next month, with up to $30B in Treasury’s allowed to run off in June, July and August - followed by $60B in subsequent months. This did not come as a big surprise; however, markets soared after the Fed Chair said he wasn’t “actively considering” raising interest rates by 75 bps at a future meeting.
Thursday: Well, I guess that J. Powell's happy talk wasn't all that happy after all. He said many times that our FED was going to slay inflation, even if it causes pain. Just because he said 75 bps were off the table, what the heck is the difference? Isn't 50+50+50 the same as 75 +75? So, what to do in here? Is it worth nibbling if you really see them sprinting us higher? It could be, but don't get silly. This market is so damaged that we could plunge even further. The volatility will be nuts, so be prepared.
Friday: Yesterday, no sector was safe from the selling. Even defensive utilities, staples, and healthcare succumbed to the pressure just a day after the FED’s first 50 bps rate hike since 2000 – designed to attack a 40-year high in inflation.
AMA (Ask Me Anything…)
“Will our FED continue to save-the-day?” Our FED is ‘All In’ to stopping inflation. Just last week our FED laid out its plans to begin rolling assets off its $9T balance sheet starting in June. Stocks moved higher on Wednesday as the FED played down the chance of a 75-bps rate hike at future meetings. But, the ‘all-clear’ sign was waved off when 10-Year Treasury yields moved above 3.1% on Thursday. Then Friday’s Jobs Report said that we gained 428k jobs – which was actually good. Unfortunately, the labor force participation rate fell two tenths – which was really bad. Right now, it's a high-volatility, directionless mess out there.
Many are still under the impression that our FED will only hike until people feel a little pain and then they will reverse course. I think this time differs from prior FED rate hikes. This time our FED may not bow to the stock market. Having said that, we're probably due for a bear market bounce of 8 to 10% during the month of May. I would view that as a selling-and-shorting opportunity. In my opinion, our markets will be heading lower mid-summer, and if our FED doesn’t have to save-the-market – then all heck could break loose.
Next Week: Volatility Storm Trackers
Market Update:
- The FED run-up and smack-down to end the week - ‘massively unchanged’. Tip #1: With this level of volatility, stop trying to handicap every single move.
- This level of Volatility causes pain on both sides of the aisle.
- Bonds have been crushed, and the 10-Year (TNX) has soared – at its fastest rate in history. The 10-Year (sitting at 3.1%) is up 92% YTD. When you compare interest rates (TNX) exploding to the S&Ps (SPY = currently at 411), we need to reduce the S&Ps by 50% simply to come in line with the TNX.
- Tip #2: The TNX or SPY will be dramatically lower very shortly.
What’s Oversold and What’s Not:
- Oversold: AMZN (-33% YTD), NVDA (-38%), TSLA (-27%), and FB (-39%)
- Not Oversold:
o AAPL (-13% YTD) & MSFT (-18%)
o XLP (-1%) and XLU (+2%)
o CAT (+3% YTD) & WMT (+3%)
- Volatility, percentages and correlation == Volatility doesn’t normally subside until we reach a ‘happy medium’.
- Mutual Fund redemptions haven’t really started as of yet – because Apple and MSFT are relatively unscathed when compared to other mega-techs. Tip #3: This is NOT the time to be loading-up on Apple.
- When marketplaces capitulate – everything gets taken down.
- Tip #4: If rates remain high, short: CAT, WMT, XLP, XLU, AAPL and MSFT.
Gauging Risk:
- We are at a very scary place on the S&Ps. If you’re going to sell premium – wait for volatility to hit the 40-level.
- Tip #5: If rates do NOT come down, buy 30-day, In/Out (controlled risk) PUT Spreads on: CAT, WMT, XLP, XLU, AAPL and MSFT.
SPX Expected Move (EM):
- Last week’s EM = $168
- Next week’s EM = $136
- Volatility declined from last week to this week. Why? Because markets have seen this movie before. Once the SPX (4,123) breaks through the 4,000 level, then the VIX will move above 40 – and with high volatility comes chaos.
Tips:
HODL’s: (Hold On for Dear Life)
- CASH == Nexo & Celsius == @ 8 to 12% yield
- PHYSICAL COMMODITIES == Gold @ $1,896 / oz. & Silver @ $22.79 / oz.
- **BitFarm (BITF = $2.71 / in at $4.12)
o Sold May, Dec ‘22: $5 CCs for income,
- **Bitcoin (BTC = $34,700 / in at $4,310)
- CPG (CPG = $7.39 / in at $6.44)
o Sold Jul $7.50 CCs for income,
- Energy Fuels (UUUU = $6.91 / in at $11.29),
o Sold June $8 CCs for income,
- **Ethereum (ETH = $2,550 / in at $310)
- GME – Holding
- **Grayscale Ethereum (ETHE = $19.61 / in @ $13.44)
- **Grayscale Bitcoin Trust (GBTC = $25.02 / in @ $9.41)
- Uranium Royalty (UROY = $3.32 / in at $4.41)
o Sold July $5 CCs for income
** Denotes a crypto-relationship
Trade of the Week:
Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. Culbertson, contributing sources and those he interviews. You can learn more and get your subscription by visiting: <http://rfcfinancialnews.blogspot.com/>.
Please write to Mr. Culbertson at: <rfc@culbertsons.com> to inform him of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <http://rfcfinancialnews.blogspot.com/>.
If you'd like to view R.F.'s actual stock trades - and see more of his thoughts - please feel free to sign up as a StockTwits follower - "taylorpamm" is the handle.
If you'd like to see R.F. in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing:
https://www.youtube.com/watch?v=K2Z9I_6ciH0
Creativity = https://youtu.be/n2QiPSe_dKk
Investing = https://youtu.be/zIIlk6DlSOM
Marketing = https://youtu.be/p0wWGdOfYXI
Sales = https://youtu.be/blKw0zb6SZk
Startup Incinerator = https://youtu.be/ieR6vzCFldI
To unsubscribe please refer to the bottom of the email.
Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Please make sure to review important disclosures at the end of each article.
Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.
PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.
Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.
All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.
Remember the Blog: <http://rfcfinancialnews.blogspot.com/>
Until next week – be safe.
R.F. Culbertson
No comments:
Post a Comment