This will be my final Post for the year.I am taking a well-deserved break and will return in around mid-January.I will keep one eye on the markets, and if I see anything that is worth acting on, I will send out an email.But, for the most part, I will be taking a break from screens and market research.
I want to wish you all a very happy festive season and all the good things for 2025.
The Fed meeting certainly has set the mood for the markets.Investors were disappointed with what Powell said about rate cuts in 2025, that there would probably be fewer than first thought.The markets turned up their nose and smacked every sector – basically throwing a hissy fit because they didn’t get what they wanted.But really, this was a good washout – what you would call a very healthy correction.It had been building for a while.I pointed out in Monday’s Post that the technicals were very bearish, and risk was rising.
So now what?
We can now argue that further downside is possible.You should not be trying to catch a falling knife at this stage.We could see another few weeks of consolidation, sort of like a topping action.Nearby resistance is seen at 5935/45 and 5980/90 (both a 50% retracement from the Dec 6th high at 6100 and the broken bull t-line from August.)
So, what’s possible:eventual downside to that bull t-line from October 2023 (5595/20) but some scope for a few weeks of consolidating as year-end approaches first.
Strategy:too late to sell now. Instead, sell on a close below 5845 (just below support).Stop should be above 5885.
Long-term outlook:further downside is probable to the base of the rising wedge (5595 or so).Rising wedges are viewed as reversal patterns, with a break/close below the base arguing a downside resolution and more major top (for at least a year).We have had an extremely overbought market after the last few years of sharp gains.So, it is important to understand that the potential now for a downside move is increased.
And one more thing in relation to the overbought market.We could see a sub $5000 S&P500 in 2025.It is possible.I have been saying for quite a while now that we would get a correction in 2025.It just started earlier than I had anticipated.
Strategy/position:We could see one more rally to just above $6100.That is where you want to be selling calls on the SPY and/or buying the SDS.(Make sure you have stops in place.) Also, if you want to scale out of any stocks, that is the time you would do it.The market will rest for several months to a year but will come roaring back eventually.
I have already recommended that you sell calls on the precious metals sector.It is possible all sectors will follow the bearish path because the run-up has been so strong over the last couple of years.
After the 2025 year of strong correction, we are likely to begin another rally on to new highs.
(PATIENCE IS UNDERRATED WHEN YOU BECOME AN INVESTOR)
December 18, 2024
Hello everyone
It’s the final week before Christmas.The market has been pausing before the Fed’s final meeting of 2024, which may be the catalyst for a year end rally.We will wait and see.
First, let’s look at the difference between patience and impatience.Warren Buffet reminds us that:
“The Stock market is a device for transferring money from the impatient to the patient.”
THIS IS WHAT IMPATIENCE LOOKS LIKE IN THE INVESTMENT WORLD
When I was reviewing the portfolio and wanted to slim it down earlier this year, I recommended to sell this stock as it was underperforming at the time.The lesson here -it is a mistake to interpret a period of underperformance as a reason to sell a stock.My patience hat must have been missing that day.
AND THIS IS WHAT PATIENCE LOOKS LIKE IN THE INVESTMENT WORLD
CrowdStrike (CRWD) suffered a severe crash in August due to a routine update to its cybersecurity software which had a malfunction. It sent around 8.5 million Windows-based computers crashing.The outage cost its largest customers around $5.8 billion. But (CRWD) has recovered.
And we see a similar recovery taking place in Snowflake, after its stock dropped from $240 down to $110 in 2024.In the spring of 2024, a string of data breaches linked to Snowflake sent a shudder through the cybersecurity community. The breach resulted in the theft of a significant volume of sensitive data from various high-profile companies.Analysts have also argued that (SNOW) lags rivals in developing AI related products.Add to this, a new CEO stepped into the company earlier this year. The stock has jumped since November when investors were surprised by the financial results it reported for its fiscal third quarter of 2025.The company had some big customer wins during Q3, which was an encouraging sign. Its customers signed longer-term contracts, and this is something that will continue to provide strong financial results in coming years.
WHERE BITCOIN COULD BE HEADING NEXT
Targets are $109k, $115k, $124k, $127k, $129k right up to $153k
THE PRO-BITCOIN NARRATIVE
Trump’s election promise was to establish a BTC strategic reserve and end Operation Chokepoint 2.0. Gensler has been replaced at the SEC with a pro-crypto Chair, Other sovereign’s/nation states expected to follow suit.
The corporates have dived into Bitcoin.Larry Fink, CEO of BlackRock, who originally ignored Bitcoin, is now a convert and sees it as an asset class.His ETF (IBIT) was launched in January this year and had around $10 billion under management after just a few weeks.Many tech companies are now considering treasury investment, along with 88% of S&P500 companies.
We are seeing more institutional investment in Bitcoin, and this should continue in 2025.Pension funds, Asset Consultants, and Global Asset Managers are now allocating to BTC to diversity Alternatives Exposure – so we could see 3% AuM as an average.
Family Offices and Retail Investors will continue to grow their exposure to BTC, either directly or via ETFs as part of a balanced portfolio included in pensions and endowments.
Crypto and Digital Assets have been legitimized as an asset class and are on track to be included across all investor portfolios.
Sovereign Wealth Funds: 3% allocation => $500,000 + increase in BTC price.
AND WHAT ABOUT GOLD
While Bitcoin is rallying, gold is retracing.As bond yields move up, we tend to see a retracement in gold prices, so, in general, they historically have an inverse relationship.
Inside Edge Capital chart
As I have been saying gold has entered a correction and this could continue for some time.We could easily see the metal drop below $2600 and move toward $2400 area and below. I have suggested selling calls on precious metals’ stocks.Another way to play the bearish move is to buy the DB Gold Short ETF (DGZ).
QI CORNER
MARY ANN BARTELS BELIEVES WE ARE IN “THE GOLDEN AGE OF INVESTING”.
Sanctuary Wealth’s chief investment strategist thinks the market could grow by 20% next year and the S&P500 could be at around 13,000 by the end of the decade.Below I share parts of an interview she gave at the Barron’s Women’s Advisor Summit in December at The Breakers in Palm Beach.
Why stocks can gain 20% next year.“What I’ve studied in my 40 years is that markets don’t make a major peak until all investors are in and the market is levered.I find that through the New York Stock Exchange margin debt and we’re not even close.I believe between now and the end of the decade, we’re still in a secular bull market.My forecast for next year on the S&P 500 is pretty aggressive at 7,200 to 7,400. We can get 10% or 15% pullbacks.”
Super bullish through 2030.“I think the environment is still very bullish for the market to go up. I also introduced a target for the end of the decade for the S&P500 between 10,000 and 13,000. And that’s what I want clients and investors to focus on.I believe between today and the end of the decade, it will be one of the most profitable investment opportunities of our lifetime.”
Reasons for optimism.“At the end of the day, what drives stock prices is earnings, and earnings have been stronger than what most people have even anticipated.I think we’re still trying to figure out how AI is going to impact earnings.I think corporate profit margins will continue to grow.The other amazing thing and why I am so bullish on technology is return on equity.Warren Buffett always talks about return on equity, but Wall Street tends to talk more about P/E ratios.When we look at technology versus the S&P500, the broader index has an ROE of about 18% while tech and tech related stocks’ ROE is growing 30%.”
Favourite and least favourite sectors.“I’m very bullish on bans and capital markets.The Trump administration is expected to have more of a deregulated environment.M&A activity should pick up, particularly in the banks.I think banks will do well, but I’m more positive on capital markets.I’m negative on healthcare…Consumer staples look very weak.But cyclicals look good and that’s a sign that the economy’s going to grow in 2025.”
Expecting more gains for Bitcoin.“Longer term, if we create (government) reserves and make it a true form of a digital asset, it’s going significantly higher, even from where we are today…A hundred thousand dollars was where you kind of bob and weave.Now we’ve busted through that.So, the next target is $113,000 and the target above that is $150,000.Those are my near-term targets.”
Advice for individual investors.“For my entire career there’s always been some concern and what is perceived to be a reason not to invest in markets.And history has shown that staying out of markets is not what you want to do.If you want to grow your wealth, you have to stay invested…If you want to have retirement funds when you retire, you need to invest now and you need to stay invested.Dollar cost average over your lifetime.”
(It seems to me that Mary Ann and I have something in common in relation to our thoughts on the markets, on staying invested and dollar cost averaging).
SOMETHING TO THINK ABOUT
A HACKER’S ADVICE ON PROTECTING YOURSELF ONLINE
Keep all sensitive information (Passwords, seed phrases and so on) on paper and away from online 3rd party digital storage.Don’t click on random links or download random files.
8:30 a.m. Personal Consumption Expenditure (November)
8:30 a.m. Personal Income (November)
10:00 a.m. Michigan Sentiment final (December)
ON THE RADAR THIS WEEK
The Federal Reserve policy meeting will set the tone for the markets heading into year-end.It will also shed light on what investors can expect in 2025.
The odds are for a cut in interest rates this week.
But the Fed meeting will also highlight its projections going forward.Markets are pricing in further rate cuts, and if they do take place, we could eventually see the fed funds rate between 3.50% and 4.00%.
In addition to the FOMC, we get the PCE report on Friday.Some investors are concerned about sticky inflation and its effect on the markets, particularly with Trump’s policy promises that include mass deportations and big tariffs imposed on imported goods.We have to wait and see if that talk is real.Even if those policies are introduced, we still don’t know the extent they will be enforced or any detail about the numbers involved.As always, investors need a clear lens into government policies - the devil is in the details – before rational decisions can be made about investments.
THE MARKET PICTURE IN 2025
Strategists are anticipating that the strong rally we have enjoyed in 2024 can continue into early 2025.However, by around mid-year, volatility could return, and a bumpy ride may ensue.I am expecting a 10%-20/25% market correction sometime in 2025. Interestingly, no strategists are suggesting that the market will be lower at the end of 2025 than where it is now.So, that means hold tight and ride the waves.
MARKET UPDATE
S&P500
Uptrend continues.Even though we have plenty of risk hanging over the market, including bearish technical, the market can still trend higher.A short-term pullback would probably find support over the next few weeks as markets traditionally perform well towards year-end.
Resistance:$6090/$6120
Support: $6025/$5970
GOLD
Gold is choppy and is undergoing a correction.And this correction could take some time.As I said last week, we could see $2,400 and even $2,200 before a low is found. That being the case, you could look at selling calls on precious metals’ stocks.Barrick Gold (GOLD) is a suggestion here.
Resistance: $2720/$2730
Support: $2630/$2590
BITCOIN
As I write this, Bitcoin is sitting above $105k. Next stop is the $109k area.Last week, Bitcoin thrashed around the $100k mark.Some people believe this zone marks a top for Bitcoin, but I believe it is merely a pit stop on the way to higher targets.
Support:$94000/$94,500/$90,000/$90,750
QI CORNER
Solution: quit buying from these companies and support local businesses.
We are now flip flopping between policy uncertainty and earnings uncertainty.
Earnings will win out, up 10-15%.
All interest rate plays remain pariahs, including gold, silver, homebuilders, bonds, and REITS.
Deregulation and end of antitrust plays will continue to be bought, including banks, brokers, money managers, nuclear, and Tesla.
US dollar rockets at higher rates for longer.
Technology stocks fade on threats to international business and slowing growth rates.
Energy gets dumped on coming overproduction and oil glut.
Buy the election winners, sell the losers.
THE GLOBAL ECONOMY – PREPARING FOR THE WORST
Fed to lower interest rates by 25bps on December 17.
Nonfarm payroll reports beat slightly, up 227,000 versus an expected 224,000.
The headline unemployment rate edged higher to 4.2%, as expected.
Unemployment hits 6.8% in Canada, an eight-year high, opening the way for a 50-basis point interest rate cut.
US GDP stays at a moderate 2.8%, giving it the strongest economy in the industrialized world.
OECD warns of global growth hit from trade war.
Core PCE rises to 2.8%, with robust disposable income gains pointing to resilient spending.
STOCKS – CHASING THE WINNERS
Chasing winners and dumping losers will be the trading strategy for the rest of 2024.
Watch out for profit-taking in January that defers profits into 2025 and taxes into 2026.
Investment banks looking for M&A boom in 2025, driving by the end of antitrust.Investment banking income could leap to $316 billion globally next year, a jump of about 5.7% in 2024.
Money is pouring out of Asia as the certainty of a harsh trade war looms.Foreigners net withdrew $15.88 billion out of equity markets.
SEC Levies a record $8.2 billion in fines in 2024.The SEC filed 583 enforcement actions in the year that ended in September, down 26% from a year earlier.
Governor of Texas Orders State agencies to stop investing in China.
(If called away on one of your option positions, John suggests exercising your long to cover your short so you can get out of the position at max profit).
BONDS – TOP OF RANGE
Is this the top in Bond Yields and the bottom in prices?
December 18 25bps Fed cut is in the price.
A 4.50% yield could define the new trading range for ten-year US Treasury bond prices (TLT), especially with another 25bps cut in overnight rates by the Fed in three weeks.
Bond yield has rocketed 100 bps since September
National debt tops record $36 trillion.
Municipal Bonds are about to take a big hit if the Tump tax cuts get renewed.That lowers the after-tax value of tax dodges like Munis, which are exempt for local, state, and federal taxes.
FOREIGN CURRENCIES
Dollar hits two-year high on rising US interest rates.Ten-year US Treasuries have risen from 3.55% to 4.50%.
Higher for longer interest rates mean higher for longer US dollar.
Don’t sell the US dollar until the next recession is on the horizon.
Russian Ruble hits 100 to the dollar.It was 1:1 when John was in Moscow 40 years ago.
Avoid (FXA), (FXE), (FXB), (FXC), and (FXY).
ENERGY & COMMODITIES – NO FRIENDS
Stabilizing the Middle East and the end of the Syrian civil war is hugely negative for oil prices.
China ratchets up the Trade War, banning the export of crucial metals essential for all tech applications.
Oil fall on Israeli peace deal talks, taking crude down 2%.
Strategic Petroleum Reserve at multi-year lows, but Biden has stepped in as a buyer.
Blame a weak China, lost OPEC discipline, and overproduction by Iraq.
Avoid the worst-performing asset class in the market.
US Oil Production hits an all-time high.
Unlimited new drilling and opening of federal lands will crash oil prices.
PRECIOUS METALS – DEAD IN THE WATER
Interest rates higher for longer are keeping precious metals under pressure, with gold down 8.3% since November 5.
The opportunity cost of owning gold is about to rise sharply.
Gold is up 40% in a year, so it was ripe for profit taking.
$600 million in selling of gold ETF’s last week.
Gold has become the only way the average Chinese can save as they can no longer speculate in real estate or copper and don’t trust the Chinese Yuan, so there is support lower down.
Central banks in emerging market countries are continuing to buy gold, with 693 metric tonnes of buying, or $5.3 billion this year.
Avoid (GLD), (SLV), (AGQ), and (WPM).
REAL ESTATE – MIXED BAG
US home equity hits an all-time high, casting a spotlight on homeowners’willingness to tap this wealth as expected rate cuts make equity utilization more affordable.
Americans with mortgages held $17.2 trillion in home equity at the end of Q3 2024, or $11.2 trillion of tappable equity – the amount homeowners can borrow against while maintaining a healthy 20%equity stake in their home.
Mortgage demand jumps by 6% as interest rates hit a one-month low.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.69% from 6.86%.
Pending home sales climbed 2% in October on a signed contract basis.
New Home Sales hit a two-year low, down 28% in October.
Economists expect a monthly increase of 0.3% for both the headline CPI reading and core CPI, which excludes volatile food and energy prices.The November producer price index, scheduled for Thursday, is expected to show an increase of 0.2% in its headline and core readings. The thinking on Wall Street is that the Fed is highly likely to cut interest rates next week if inflation comes in at or below expectations in those two reports.Still, there is an element who disagrees and believes the Fed will hold if the CPI reading came in above 0.40%.The Labor market remains front of mind for the Fed.
WHAT TO BUY BEFORE TRUMP’S TARRIFS ARE ROLLED INTO PLACE
According to Trump’s policy promise, he plans to issue a 25% tariff on products from Canada and Mexico on his first day in office, as well as an additional 10% on top of the rates still in place from his first administration on Chinese imports.
The importers paying the tariffs will likely pass them on to consumers.
Many retailers are already preparing their customers for increased prices and encouraging them to shop now.
Of course, it’s unclear how much prices will increase and which specific items will be affected, but it would be a good idea to start thinking about any large purchases you might be planning.For instance, do you need to upgrade your iPad or your MacBook?My advice: Do it now.
These are some of the categories where prices are expected to increase.
Laptops and tablets
Videogame consoles
Smartphones
Apparel, footwear and accessories
AUSTRALIAN NEWS CORNER
The Reserve Bank of Australia keeps interest rates on hold at 4.35%.People hoping for an early Christmas gift from the RBA were let down once again.Now, the odds are that the RBA won’t start to cut interest rates until about April next year, so Australia still has some time to wait.
WORLD NEWS CORNER
Syrian regime falls.Assad flees to Russia.Full implications are still unfolding, but the hope is that the factions that make up the rebel force can work together to bring some semblance of stability to the country.
(CHARGING CABLES MAY BECOME A THING OF THE PAST + THE RISE OF THE DISGRUNTLED CUSTOMER)
December 9, 2024
Hello everyone
WEEK AHEAD CALENDAR
MONDAY DEC. 9
10 a.m. Wholesale Inventories final (October)
10:30 p.m. Australia Rate Decision
Previous: 4.35%
Forecast: 4.35%
Earnings: Oracle
TUESDAY DEC. 10
8:30 a.m. Unit Labor Costs final (Q3)
8:30 a.m. Productivity final (Q3)
6:50 p.m. Japan PPI MoM
Previous: 0.2%
Forecast: 0.2%
Earnings: AutoZone
WEDNESDAY DEC 11
8:30 a.m. Consumer Price Index (November)
8:30 a.m. Hourly Earnings (November)
8:30 a.m. Average Workweek final (November)
9:45 a.m. Canada Rate Decision
Previous: 3.75%
Forecast: 3.25%
Earnings: Adobe
THURSDAY DEC 12
8:15 a.m. Euro Area Rate Decision
Previous: 3.25%
Forecast: 3.00%
8:30 a.m. Continuing Jobless Claims (11/30)
8:30 a.m. Initial Claims (12/07)
8:30 a.m. Producer Price Index (November)
Earnings:Broadcom, Costco Wholesale
FRIDAY DEC 13
8:30 a.m. Export Price Index (November)
8:30 a.m. Import Price Index (November)
8:30 a.m. US Import Prices
Previous: 0.3%
Forecast: -0.3%
MARKET UPDATE
S&P500
Uptrend is intact, and the bias remains higher.Just don’t expect a straight line up.
Support: $6050, $6000, $5,800
Resistance:$6,100, $6,130, $6,200
GOLD
After a huge uptrend from the October 2023 low of ~$1800, we will probably see some consolidation and/or wide-ranging movements in gold and the precious metals sector as a whole.It will be no surprise to see gold consolidate for several months before any significant low is made.We could see $2,400 or even $2,200 during this period.
Resistance = ~$2,670, $2,730, $2,750
Support = ~$2,600, $2,550
BITCOIN
Bitcoin uptrend remains intact.We have seen some churn around the $100k mark thus far, and this may continue for a time before we break out to the next resistance areas, which are about $105k and then $109K.(If you own any MicroStrategy (MSTR), I recommend taking some profits – 25%-50% - and rolling that into Larry Fink’s iShares Bitcoin Trust (IBIT).Diversification in every sector is key.(IBIT) is a good vehicle to enter the crypto space if you don’t own any Bitcoin directly through a crypto exchange. (IBIT) launched in January this year.It is secure, transparent, and has $50 billion in assets under management.
Support = ~$94,500, $91,800, $87,500
WHAT’S ON THE RADAR THIS WEEK
Last Friday in the U.S., we saw stronger-than-expected employment data.This week, we will see three major rate decisions from the Euro Area, Canada, and Australia.U.S. inflation statistics are expected on Wednesday morning.
HAVE YOU GOT A BOX FULL OF CHARGING CABLES? WE MAY NOT NEED THEM IN THE NOT-TOO-DISTANT FUTURE.
Thanks to British scientists, who have invented a diamond battery that never dies. The lab-grown diamonds encase a slice of the radioactive material carbon-14.
Carbon-14 is used by archaeologists to date fossils and loses just half of its radioactivity every 5,700 years.
Scientists argue that if a diamond battery had existed at the dawn of human civilization around 4,000BC, it would still have around half of its charge left.
What are the benefits of a diamond battery?
Safer, low emissions
Sustainable – no need to send to landfill.
Range of uses
Deep space missions, satellites, healthcare devices such as pacemakers, hearing aids, wrist watches, computer chips, etc.
The next few years will be about organizing production and enhancing power performance.
THE ACTIONS OF DISGRUNTLED CUSTOMERS ARE ESCALATING
We all know the CEO of United Healthcare, Brian Thompson, was recently shot as he walked along a footpath in New York.The assailant has not yet been found.But evidence of his reasons was found at the scene.Delay, Deny, and Defend were words found on the shell casings at the scene.Apparently, the culture of healthcare companies across the U.S. is to avoid paying claims in any way they can, and these three words echo the tactics that are commonly used.There has been an outpouring of rage after this event, and media outlets have confirmed that thousands of Americans go bankrupt, lose their homes, of die every year due to medical insurer practices.The United States has the world’s most expensive healthcare system of any country.A medical consultation with the GP, on average, is about $190. And, if you are unlucky to find yourself in hospital, the bills can amount to tens or even hundreds of thousands of dollars.
In another example of a customer dissatisfied with the service he received, we find ourselves in Surfers Paradise in Australia.One man, after leaving a massage parlour, returned in the early hours of the morning and firebombed the premises, burning it to the ground.
We are constantly asked to write reviews every time we use a service, visit a hotel, use a hire car, eat at a restaurant, go through an airport, get our hair cut, and even visiting department stores.But words don’t seem to be getting the message across much anymore. Messages can be deleted and ignored. And nobody is listening.It seems if you don’t provide good customer service and the business does not do its job well, some customers will make sure they are heard and will deal with you bluntly.
QI CORNER
SOMETHING TO THINK ABOUT
A walk along one of Australia’s finest beaches at dusk.
(THE WEIGHT LOSS REVOLUTION COULD TRANSFORM OUR ECONOMY)
December 6, 2024
Hello everyone
The weight loss revolution is having far-reaching economic effects
Shopping habits are changing with the advent of weight loss drugs, as are foods purchased and exercise habits.
The active ingredient in most weight loss drugs – including Mounjaro, Wegovy, and Ozeumpic – mimics a hormone called glucagon-like peptide-1 (GLP-1).That peptide slows digestion and sends fullness signals to the brain, resulting in people eating less.
Waistlines are not the only thing being reduced.
The drugs have created ripples across the US economy due to the country’s large uptake – about 7 million Americans take the drugs, according to Morgan Stanley, and that number is predicted to rise to 24 million by 2035.
Food shopping bills are being slashed - down from $400 per week to $150-$200, according to one family.
Res-Med – an Australian medical device company that makes CPAP machines for sleep apnea and is worth $56 billion – saw a drop in its share price earlier this year largely due to the belief that GLP-1s would lead to fewer people suffering from sleep apnea.
ResMed – chief executive Mick Farrell told the ABC’s The Business the opposite had occurred, with the company’s data indicating patients with sleep apnea using GLP-1 drugs were almost 11 percent more likely to use a CPAP machine.
The food and fashion industry could be reshaped.
Some studies indicate GLP-1 may change food preferences and reduce cravings for processed foods while boosting the desire for fresh fruit and vegetables.
It appears to be typical for most people using GLP-1s to reduce their calorie consumption by about 30 to 35 percent.
Adam Spielman is the head of future health at Citigroup and co-authored a report looking at the reach of GLP-1 medications in the US and possible future commercial implications.
He believes the weight loss drugs could have “a profound effect” on the economy.He expands this argument by pointing out that if 20 percent of Australians end up taking these drugs, then it is quite easy to argue that total calorie consumption in Australia could fall by roughly 6 percent. And the food products that would benefit the most would be fruit and vegetables.The fast-food industry may face its worst nightmare – people not wanting their type of food anymore because of different food tastes and behaviours.This would force the industry to shift its offering to fit in with the changing palates of customers.
Weight loss pills will change society, but it will take decades to really understand what the true impact will be.
The worst telecom hack in U.S. history
Many Americans’ data have been stolen in a telecoms attack allegedly carried out by a Chinese hacking group dubbed “Salt Typhoon.”
The White House has confirmed that at least eight U.S. telecom firms, as well as dozens of nations, have been impacted by this attack.
According to the FBI, the hackers used their access to telecom networks to target the metadata of a large number of customers, including information on the dates, times, and recipients of calls and texts.
The hackers also succeeded in retrieving the actual audio files of calls and content from texts from a much smaller number of victims.
US government officials and prominent political figures have also been impacted by this hack.
Telephones belonging to then-presidential and vice-presidential candidates Donald Trump and JD Vance were also affected.
China has denied all claims.
Cybersecurity needs to be bolstered to fill the gaps that the Chinese are apparently exploiting.
Cyber-attacks are our modern warfare. So, if we can understand that, then cyber security companies should always do well and should be part of any long-term portfolio.
Housekeeping
Thank you to those who joined the monthly Zoom meeting on December 5.
Percentage gain from 08/07/24 to 11/29/24 = 84.14%
Core Scientific (CORZ) daily chart
Core Scientific is a sort of rags to riches story.This year it went from bankruptcy to an investor’s favourite by betting on two big technology trends:AI data centres and bitcoin mining.Shares are up around 400% this year.
Core Scientific has been earning steady profits by hosting servers owned by companies that sell cloud services to AI providers.
Data centres are in high demand because tech companies need them to power their AI applications.
Core Scientific operates nine grid-connected warehouses in six states with access to so much electricity they could serve several hundred thousand homes.
The company started the year focused entirely on crypto mining, but it quickly pivoted as it saw demand surge for electricity for AI data centres.
In June, the company signed a deal with a company called Coreweave to lease data centre space for AI cloud services.Coreweave has since agreed to lease 500 megawatts worth of space.Core Scientific says it will get paid $8.7 billion over 12 years under the deal.
Privately held Coreweave is one of the fastest-growing companies behind the AI revolution.It was once a cryptocurrency miner, but has since transitioned to offering cloud services, with a particular focus on artificial intelligence.It’s closely connected to Nvidia, which has invested money in Coreweave and given the company access to its top-end chips.Coreweave expects to be one of the first customers for Nvidia’s upcoming Blackwell GPUs.
Analysts see EPS in the company jumping tenfold by 2027.Shares trade at about 13 times those 2027 estimates.
The data center opportunity should only grow from here, as tech companies build more powerful AI systems.Of the 1,200 megawatts worth of gross power capacity Core Scientific has contracted, about 800 megawatts are going to data center computing deals and 400 megawatts toward Bitcoin mining.
QI CORNER
Recording of October Zoom monthly Meeting (apologies for the late arrival of this recording)
This week’s employment data, culminating in Friday’s Nonfarm Payrolls report, is expected to return to normal after last month’s unusual numbers, which were off-kilter by virtue of hurricane disruptions and labour strikes.Investors will also watch Federal Reserve Chair Powell’s upcoming speech for clues about how the central bank might respond to the trade policies expected from the Trump administration.
FOOD WASTE – WHAT TO DO ABOUT IT
A Melbourne start-up, Freshho, aims to tackle the $940bn food waste crisis.The startup has raised $17m to expand its platform that, which eliminates food waste and saves wholesalers a fortune by taking the guess work out of food ordering.In other words, they are better able to anticipate their restaurant customers’ needs, thanks to artificial intelligence.
Fresho, which James Andronis and Huw Birrell founded in 2015, is now looking to expand to the US, with the raising – led by Geoff Tarrant, co-founder and former executive chairman of Payapps – valuing the company at $120m.
The pair have developed a platform that aims to make ordering produce more efficient at a wholesale level.
Mr Andronis said it had replaced fresh food wholesalers dedicating overnight staff to manually process orders, which typically arrived via email. Text, voicemails, and even faxes, which often resulted in errors and wastage.
Fresho’s AI-powered system automatically converts incoming orders into structured data while giving restaurants direct access to live pricing and availability through its app.
According to Oz Harvest, about 1.3 billion tonnes of food produced is wasted each year, costing the global economy about $940bn.It’s also bad for the environment, with up to 10 percent of global greenhouse gas emissions coming from goods that are produced but not eaten. Oz Harvest commented that “if food waste was a country, it would be the third-biggest emitter of greenhouse gases after the US and China.
Mr Andronis says Fresho – which has processed 30 million orders since its inception and 10 million orders in the past year- says its platform has led to a dramatic reduction in food waste.
Investor Geoff Tarrant will join Fresho as a director.Payapps, the global construction software firm he co-founded, was acquired by Autodesk for $600m in 2024.
The software platform Fresho will provide benefits for all participants in the fresh food market.
Note:This is an item of interest post.I will monitor Fresho’s progress as it expands to the U.S.
Fresho’s app automates sales orders to eliminate errors and guesswork that fuels food wastage.
MARKET UPDATE
S&P500
Uptrend is still intact and showing no signs of exhaustion yet.The Santa rally is in front of us.
Next year, I will be looking for some sort of correction, be it a time correction or price correction.
Support:$5950/$5890
Next resistance targets:$6085/$6120
GOLD
Consolidating taking place in gold after a strong rally. Rally will continue, but we may not hit new highs until next year.Time will tell.
Support: $2615/$2560
Next resistance target: $2,820
BITCOIN
The uptrend continues here.It is expected that we will break through $100k before year-end.
Support:$95,800/$94,900/$90,560
Next resistance target: $100,650/$109,280
PORTFOLIO UPDATE
PALANTIR (PLTR) Recommended on March 20, 2024, at $23.00.
Today’s recommendation:Take some profits off the table.
Daily chart
Weekly chart
Palantir stock has soared nearly 277% this year, climbing 47% just in the past month after the analytics software provider beat the Street’s earnings and sales estimates in its third quarter, raised its forecasts for future profit, and decided to move its stocks listing to the Nasdaq stock market from the NYSE.
I recommended Palantir on March 20 this year when the stock was sitting at $23.00.At the end of September, we were up 61.73%.At the end of November, however, we were up 191.65%.Now, that’s quite a tidy return.Let’s stick to our regime of taking some profits off the table, as after such a strong rally, we may find some sort of correction that could follow in the new year.
Bonds are instruments used by companies and governments when they need to raise money in the form of a loan.
If, for instance, a company issues a Bond and the investor buys the bond, the company gives a promise to repay the money at an agreed-upon interest rate.
Bonds are issued at the par value of $1000, which is the standard.
The Interest rate depends on several factors.
One of the most important is the Credit Rating.
The lower the credit rating, the higher the risk and the higher the interest paid.
The U.S. government has never defaulted on a bond, so they are considered a very low credit risk, and therefore, they have a low interest rate.
A Bond states three things:
Par value, also called face value, its coupon rate, which is stated as a percentage of par and its maturity date.
What is the coupon rate for bonds?
The coupon rate is just another term for the bond’s interest rate.
In other words, it’s the cash that the borrower will pay periodically to the bondholder.
The face value is the lump sum that the borrower is promising to pay at the maturity date.
At the end of the term, you get the principal back.
You can also sell your bond to another person on the bond market.
How do you buy a bond?
Depending on the type, you can purchase bonds through brokers or exchange-traded funds or from the U.S. government at Treasury Direct.You may need to have at least $1,000, the typical starting face value for most bonds.
Comparing bonds and stocks
Let’s draw a comparison between stocks and bonds.When you buy a stock, you own some of the company.When you buy a bond, you are making a loan to a company (or the government), but you do not own any of the company.
Types of Bonds
U.S. Treasury Bonds
The most important bonds are the U.S. Treasury bills, notes, and bonds issued by the Treasury Department.They are used to set the rates for all other long-term fixed-rate bonds.The Treasury sells them at auction to fund the operations of the federal government.
These bonds are also resold on the secondary market.They are the safest since they are guaranteed by the United States government.That means they also offer the lowest return.They are owned by almost every institutional investor, corporation, and sovereign wealth fund.
Savings Bonds
Savings bonds are also issued by the Treasury Department.These bonds are meant to be purchased by individual investors.They are issued in low enough amounts to make them affordable for individuals.
Agency Bonds
Quasi-governmental agencies, like Fannie Mae and Freddie Mac, sell bonds that are guaranteed by the federal government.
Municipal Bonds
Municipal bonds are issued by various cities.They are tax-free but have slightly lower interest rates than corporate bonds.They are slightly riskier than bonds issued by the federal government.Cities occasionally do default.
Corporate Bonds
Corporate bonds are issued by all different types of companies.They are riskier than government-backed bonds, so they offer higher rates of return.They are sold by the representative bank.
There are three types of corporate bonds:
Junk bonds or high-yield bonds are corporate bonds from companies that have a chance of defaulting.They offer higher interest rates to compensate for the risk.
Preferred stocks are technically stocks, but they act like bonds.They pay you a fixed dividend at regular intervals.They are slightly safer than stocks in case of bankruptcy.
Holders get paid after bondholders but before common stockholders.
Certificates of deposit are like bonds issued by your bank.You essentially loan the bank your money for a certain period for a guaranteed fixed rate of return.
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