Time has taught me that leading from the heart is very powerful. Per FW: A leader can be the most brilliant product person, strategist, entrepreneur, and/or business builder, but if they cannot get people to care, follow, engage, and trust – they will not be effective. This is a difficult lesson to learn. It’s a natural tendency to hold your emotions in check when you are in front of groups – as we are taught to project strength. It is also natural to hold back ‘bad news’ like a dysfunctional fundraising process, conflicts in the board room, the loss of your largest customer, or a co-founder / supplier relationship that is at risk. Yet, it is in these exact moments where leaders develop fellowship, trust, engagement, and caring from their team. If you are struggling to build trust – try a little more transparency, vulnerability, and honesty in your communication style.
The Market:
Allow me to quantify the level of financial unpreparedness out there. We need to stop assuming that most financial experts know what’s going on. The recent banking crisis taught us some very valuable lessons about risk:
1. Too big to fail bank CEOs are telling us how dangerous digital assets (crypto) are as an investment – yet these same banks combined to somehow accrue over $150B in unrealized bond losses.
2. Most major financial services CEOs tell us how dangerous self-directed investing is – yet they hold unrealized trading losses exceeding $50B.
3. Finally, we have constant reminders from traditional financial media telling us how dangerous and outrageous financial derivatives are. Yet DAILY they spend tens of millions of marketing dollars to pitch and validate their unproven market savvy and capital safety. These are the same firms that have more dollars than all the retail trading losses combined – a few hundred times over.
Nobody knows your own financial situation better than you. I think you’ll be happier when you bring your financial decision-making back in-house.
InfoBits:
- “Some of last year’s storm clouds did hit… but some of those threatening clouds are still here. Today’s inverted yield curve is eight for eight at predicting a recession in the next 12 months"… JPM CEO: Jamie Dimon.
- 40% of 2023 college grads are desperate for a job… because the unemployment rate for grads aged 20 to 24 has doubled since 2021.
- "Super Mario Bros." recorded the #1 opening global box office debut for an animated film.
- US corporate bankruptcies are at their highest level since July 2020.
- Q1 earnings season kicks off this week; analysts expect S&P 500 earnings to decline nearly 10% from Q1 2022.
- The 4 cities with home prices lower than a year ago are… San Francisco, Seattle, San Diego, and Portland. It’s the first time the index as lower since 2012.
- A record 56% of Americans believe… that a 4-year college degree is not worth the cost.
- Property defaults are not slowing down… as WeWork just defaulted on a loan for a San Francisco office tower.
- “Tear down the skyscrapers” says Kyle Bass. Demand for office buildings isn’t returning and it’s impractical to turn most towers into apartments.
- “NPR’s organizational accounts will no longer be active on Twitter… because the Twitter platform has taken actions that undermine our credibility.” Musk’s comment was: “Defund NPR.”
- “Just follow the money”… Silicon Valley investors are seeking to build long-term ties with Middle Eastern sovereign wealth funds during the worst funding crunch for venture firms in almost a decade.
- U.S. retail sales fell by 1% in March… for the 2nd month in a row.
Crypto-Bytes:
- SBF sez: “We sometimes find $50m of assets lying around… such is life.” FTX was never a real business.
- Arkansas joined Montana and Texas… in proposing legislation to regulate and protect Bitcoin mining operations.
- There has been a real increase in the number of Bitcoin HODLers… reflecting a pattern observed in early 2021 when BTC surpassed $60,000.
- Bitcoin is above $30,000… and has doubled in 2023.
- Gold is at weekly, all-time-highs (over $2k)… so it has been a good year for the ‘end-of-the-world’ asset class (Bonds + Bitcoin + Bullion).
- The Bank for International Settlements believes… that tokenizing the trillion-dollar government debt market “could yield sizable benefits.” Let’s tell Elizabeth Warren and Warren Buffett that the BIS just found a real use-case for crypto!
- Twitter is allowing users to… view market charts and buy ‘n sell stocks from eToro.
- VC funding for crypto startups plummeted 80% YTD… meanwhile Bitcoin has increased in price by 100% YTD. Coincidence?
- Ethereum’s implementation of the Shanghai upgrade… was successful. Shanghai allows ETH stakers to withdraw their stakes (and rewards) from Ethereum if they wish to do so.
- SBF sez: “Alameda is un-auditable. We are only able to ballpark what its balances are, and cannot access a transaction history.”
TW3 (That Was - The Week - That Was):
Monday: What's on tap for us this fine week? In order, we get: (a) the CPI on Wednesday, (b) the PPI on Thursday along with the FOMC minutes, and (c) earnings from JP Morgan, Wells Fargo, and Citicorp on Friday. But there's trouble brewing out there. Lumber futures are signaling a major problem in housing, and I could easily see the market finally paying attention to some reality later this month. We're way out over our ski's here.
Wednesday: Currently, Fed Fund Futures are currently predicting a 75% chance of a 0.25% rate hike on May 3. The CPI came in at 5% YoY. We were up 0.1% MoM, and ex-food and energy we were up 0.4%. The Core Rate was unchanged at 5.6%. So, are we looking at the beginning of a blow off top here? Are they going to squeeze the shorts till they bleed, and then yank the rug? Or has magic returned and it's: Up, Up, and Away? One would think that if this number was really good, gold (and Bitcoin) would be cratering – instead of being UP $40. Will this number make Powell quit hiking? Nope, but the market doesn't care – it thinks it is pressuring him to stop.
AMA (Ask Me Anything…)
March’s Jobs Report showed:
- Entrepreneurial jobs decreased by 280,000,
- Part-time jobs decreased by 342,000, and
- Initial Jobless Claims increased by 28,000 above expectations.
Therefore, leading indicators such as Initial Jobless Claims show us a jobs market that is about to deteriorate, especially given the majority of the report was filed prior to the banking crisis.
Next Week: When the Music Stops…
- How are a cooling economy and deflation = bullish? Year-to-date, we have seen an incredible amount of manic, one-sided trading. We are trading around and between 3 particular levels: 4211, 4106, and 3931. We may need to touch the 4211 level – before we fall because I’m anticipating an extremely volatile summer.
- We had a huge retail sales miss = 1% lower in March. I don’t believe that our FED will be cutting rates any time soon (into 2024) because inflation is entrenched in wages and ‘cost-of-goods’. Markets are completely detached from the economy – moving full-speed-ahead – while only watching through the rear-view mirror.
- The Dollar continues to ‘melt down’… and it will cause a ‘scare’ if it falls below $100. But notice how the All Country World Index of stocks has moved in the exact opposite direction of the Dollar. Aka: once the Dollar peaked in the autumn of 2022, stocks all over the world started to rip higher.
- Commodities continue to move higher… look at the chart of the CRB Index and the overall CPI percentage change from a year earlier. I was shocked at how closely these charts move in tandem, but it makes sense since inflationary assets such as commodities rise along with inflation. However, the resilience of the major commodity indexes speaks to pockets of strength beneath the surface, especially in precious metals and agricultural contracts.
- We have the lowest Volatility (17.07) since 2021… so watch for the opportunity to buy VIX CALLS.
- TRADES:
o Consumer Discretionary ETF = XLY In/Out Spread: BOT May: +$147 / -$145 PUT SPREAD for $0.88. Amazon and Tesla are both substantial contributors to the XLY, and both have earnings over the next weeks. We just need one to miss to collect the premium.
- Expected Move (EM):
o Last Week == $76 … 2nd consecutive week for no-breach of the EM
o Next Week == $58 … It would be a statistical anomaly for us to continue the streak of no-breach behavior; therefore, we’re moving higher or lower than the EM this week.
TIPS:
HODL’s: (Hold On for Dear Life)
- PHYSICAL COMMODITIES = Gold @ $2,018/oz. & Silver @ $25.5/oz.
- 13 Week Treasuries @ 4.8 to 5.25%
- **Bitcoin (BTC = $30,600 / in at $4,310)
- **Ethereum (ETH = $2,100 / in at $310)
- DNN – Denison Mines ($1.04 / in at $1.32)
- GME – DRS’d and HODL
- Innerscope (INND = $0.003 / in at $0.0052)
- MESO – Mesoblast Ltd. ($3.44 / in at $3.60)
o SOLD July $5 CALLS for $0.85
- MRK – Merck ($115)
o BOT Oct: +$115 / -$125 CALL SPREAD
- NFGC – Newfound Gold ($5.26 / in at $3.75)
o SOLD some April $5.00 CALLS
Follow me on StockTwits.com to get my daily thoughts and trades – my handle is: taylorpamm.
Please be safe out there!
Disclaimer:
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