• Hot Tips Archive
Mad Hedge Fund Trader
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us[email protected]
  • Login
  • Search
  • Menu
MHFTR

Some Sage Advice About Asset Allocation

Diary, Newsletter

Asset allocation is the one question that I get every day, which I absolutely cannot answer.

The reason is simple: no two investors are alike.

The answer varies whether you are young or old, have $1,000 in the bank or $1 billion, are a sophisticated investor or an average Joe, in the top or the bottom tax bracket, and so on.

This is something you should ask your financial advisor, if you haven’t fired him already, which you probably should.

Having said all that, there is one old hard and fast rule, which you should probably dump.

It used to be prudent to own your age in bonds. So, if you were 70, you should have had 70% of your assets in fixed income instruments and 30% in equities.

Given the extreme overvaluation of all bonds today, I would completely ignore this rule and own no bonds whatsoever.

This is especially true of long-term government bonds, which are yielding negative interest rates in Europe and Japan, and only 1.10% in the US.

Instead, you should substitute high dividend-paying stocks for bonds. You can get 5% a year or more in yields these days, and get a great inflation hedge, to boot.

You will also own what everyone else in the world is trying to buy right now, high yield US stocks.

You will get this higher return at the expense of higher volatility. So just turn the TV off on the down days so you won’t get panicked out at the bottom.

That is, until we hit the next recession. Then all bets are off. That may be next year, or not.

I hope this helps.

John Thomas
The Diary of a Mad Hedge Fund Trader

Under or Over 70?

January 20, 2021/by MHFTR
https://madhedgefundtrader.com/wp-content/uploads/2018/09/John-on-roller-coaster-story-2-image-e1536871965942.jpg 300 400 MHFTR https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png MHFTR2021-01-20 09:02:562021-01-20 09:44:10Some Sage Advice About Asset Allocation
Mad Hedge Fund Trader

January 20, 2021 – Quote of the Day

Diary, Newsletter, Quote of the Day

“The bubble is in the bond market, not the stock market,” said Leon Cooperman, CEO of Omega Advisors, an original investor in my 1990’s hedge fund.

January 20, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2020/01/leon-copperman.png 272 410 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-20 09:00:162021-01-20 09:43:46January 20, 2021 - Quote of the Day
Mad Hedge Fund Trader

January 19, 2021

Diary, Newsletter, Summary

Global Market Comments
January 19, 2021
Fiat Lux

Featured Trade:

(WHY THERE’S ANOTHER DOUBLE IN CRISPR THERAPEUTICS)
(CRSP), (BLUE), (EDIT), (NVS), (GILD)

January 19, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-19 09:04:192021-01-20 09:48:12January 19, 2021
DougD

Quote of the Day – January 19, 2021

Diary, Newsletter, Quote of the Day

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty,” said the late British Prime Minister, Winston Churchill.

Winston Churchill

January 19, 2021/by DougD
https://madhedgefundtrader.com/wp-content/uploads/2015/02/Winston-Churchill-e1423604151137.jpg 179 300 DougD https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png DougD2021-01-19 09:00:432021-01-19 14:24:18Quote of the Day - January 19, 2021
Mad Hedge Fund Trader

January 18, 2021

Diary, Newsletter, Summary

Global Market Comments
January 18, 2021
Fiat Lux

Featured Trade:

(MARKET OUTLOOK FOR THE WEEK AHEAD, or WHAT WOULD KILL THIS MARKET?)
($INDU), (TLT), (TBT), (GLD), (GOLD), (WPM), (TESLA)

January 18, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-18 00:04:102021-01-17 23:25:59January 18, 2021
Mad Hedge Fund Trader

January 18, 2021 – Quote of the Day

Diary, Newsletter, Quote of the Day

“You don’t want to invest based on a political prism,” said Oracle of Omaha Warren Buffet.

January 18, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/03/political-prism.png 291 291 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-18 00:00:212021-01-17 23:23:03January 18, 2021 - Quote of the Day
Mad Hedge Fund Trader

January 15, 2021

Diary, Newsletter, Summary

Global Market Comments
January 15, 2021
Fiat Lux

Featured Trade:

(BETTER BATTERIES HAVE BECOME BIG DISRUPTERS)
(TSLA), (XOM), (USO)

January 15, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-15 11:04:112021-01-15 11:56:26January 15, 2021
Arthur Henry

Better Batteries Have Become Big Disrupters

Diary, Newsletter

We are on the verge of seeing the greatest advance in technology this century, the mass production of solid-state batteries. The only question is whether Tesla (TSLA) will do it, which is remining extremely secretive, or whether one of the recent spates of startups pulls it off.

When it happens, battery efficiencies will improve 20-fold, battery weights will fall by 95%, and electric car ranges will improve by 50%. Car prices will collapse and the global economy will no longer look the same.

With alternative energy sources growing by leaps and bounds, despite the gale force headwind of a hostile administration, it’s time to take another look at battery technologies.

I have been arguing for years that oil will never again reach a triple-digit price (click here for “Oil: It’s Different This Time”.

Today, I am going to tell you what will replace it.

Sony Corp. (SNE) invented the lithium-ion battery in 1991 to power its high-end consumer electronics products.

It is now looking like that was a discovery on par with Bell Labs’ invention of the transistor in 1947 and Intel’s creation of the microprocessor in 1971, although no one knew it at the time.

Until then, battery technology was essentially unchanged since it was invented by Alessandro Volta in 1800 and Gaston Plante upgraded it to the lead-acid version in 1859.

That is the same battery that starts your conventional gasoline-powered car every morning.

The Sony breakthrough proved to be the springboard for a revolution in battery power. It has fed into cheaper and ever more powerful iPhones, electric cars, laptops, and even large-scale utilities.

In 1995, the equivalent of today’s iPhone 10 battery cost $20. Today it can be had for less than $1.00 if you buy in bulk, which Apple does by the shipload. That’s a cost reduction of a mind-blowing 95%.

Electric car batteries have seen prices plunge from $1,000/kilowatt in 2009 to only $125 today.

Tesla (TSLA) expects that price to drop under $100 with its new $6 billion “Gigafactory” in Sparks, Nevada. A second one is under construction. That is important as $100 has long been seen as the holy grail, where electric cars become cheaper than gasoline-powered ones.

The facility is producing cookie-cutter, off-the-shelf batteries made under contract by Japan’s Panasonic (Matsushita) that can fit into anything.

If you took existing battery technologies and applied them as widely as possible, it would have the effect of reducing American oil consumption from 22 to 18 million barrels a day.

That’s what the oil market seems to be telling us, with prices hovering just under $53 a barrel, less than a third of where they were a decade ago.

Improve battery capabilities just a little bit more and that oil consumption drops by half very quickly.

Both national and state governments are doing everything they can to make that happen.

The US now has a commanding technology lead over the rest of the world (I can’t believe the Germans fell so far behind on this one).

In 2009, President Obama chipped in $2.4 billion for battery and electric car development as part of his $787 billion stimulus package. He got a lot of bang for the buck.

So far, I have been the beneficiary of not one, but four $7,500 federal tax credits for my purchase of my Nissan Leaf and two Tesla S-1’s and a Model X. The Feds also chipped in another $25,000 for my new solar roof panels.

A reader told me yesterday that Sweden will ban the sales of gasoline and diesel-powered vehicles from 2030. China and the UK will do the same. Japan wants electric and hybrids to soon account for half of its new car sales.

California has been the most ambitious, investing to obtain 100% of its power from alternative sources by 2030. Some one million homes here already have solar panels, and these are not even counted in the alternatives equation.

Solar and wind are already taking over in much of Europe on a nonsubsidized, cost-competitive basis.

By 2030, a ten-pound battery in your glove compartment (glove box to you Brits in London) will be able to take your car 300 miles. The cost of energy will essentially be free.

And guess what?

In a year, I will be able to use my solar panels to charge my 100-kilowatt Tesla battery during the day and then use it to power my home at night.

That is enough juice to keep the lights on for three nights. Then, I will be totally off the grid, with utility bills of zero.

Tesla has denied it has such a program, but there is nothing to stop a third party from coming in and providing the service. All it would require is an app and 30 minutes’ worth of wiring.

To say this will change the geopolitical landscape would be a huge understatement.

The one-liner here is that oil consumers will benefit enormously, like you and me, while the producers will get destroyed. I’m talking Armageddon, mass starvation levels of destruction.

In the Middle East, some 1 billion people with the world’s highest birth rates will lose their entire source of income.

Russia, which sees half its revenues come from oil, will cease to be a factor on the international stage, and may even undergo a third revolution. Take oil away, and all they have left is hacking, bots, and borscht.

Norwegians will have to start paying for their social services instead of getting them for free.

Venezuela, which couldn’t make it at $100 a barrel, will implode, destabilizing Latin America. It’s already started.

It going to be an interesting decade for geopolitical commentators.

Further improvements in battery power per dollar will change the US economy beyond all recognition.

This will be a big win for the 90% of the economy that consumes energy and an existential crisis for the 10% that produce it.

Public utilities will have to change their business models from power producers to distributors.

No less an authority that former Energy Secretary Dr. Steven Chu (another Berkeley grad) has warned the industry that they must change or get “Fedexed”, much the same way that overnight delivery replaced the US Post Office.

US oil majors will suffer some very tough times but won’t disappear. My bet has always been that they will buy the entire alternative industry the second it becomes profitable.

After all, they are not in the oil business, but in the profit-making business, and they certainly have the cash and the management and engineering expertise to pull this off. Exxon (XOM) will turn green out of necessity.

As is always the case, there are very few publicly listed stock plays in a brand-new emerging technology like the battery sector.

Many of the early-stage entrants have already filed for bankruptcy and had their assets taken over for pennies on the dollar.

It’s a business you want to be in because Citibank expects that giant grid-scale batteries alone will be a $400 billion a year market by 2030.

When I visit friends at the oil majors in Houston, I chided them to be kind to that Birkenstock-wearing longhaired visitor.

He may be their future boss.

Tesla’s Solid-State Battery Design

 

 

 

January 15, 2021/by Arthur Henry
https://madhedgefundtrader.com/wp-content/uploads/2018/01/wash-car-e1517279965252.jpg 320 580 Arthur Henry https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Arthur Henry2021-01-15 11:02:502021-01-15 11:55:12Better Batteries Have Become Big Disrupters
Mad Hedge Fund Trader

Quote of the Day – January 15, 2021

Diary, Newsletter, Quote of the Day

“Rational people don’t risk what they have and need for what they don’t have and don’t need,” said Oracle of Omaha Warren Buffet.

January 15, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/03/warren-beffet.png 300 400 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-15 11:00:252021-01-15 11:54:43Quote of the Day - January 15, 2021
Mad Hedge Fund Trader

January 14, 2021

Diary, Newsletter, Summary

Global Market Comments
January 14, 2021
Fiat Lux

Featured Trade:

(WHAT THE HECK IS ESG INVESTING?),
(TSLA), (MO)

January 14, 2021/by Mad Hedge Fund Trader
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2021-01-14 11:04:042021-01-14 11:20:02January 14, 2021
Page 3 of 434‹12345›»

Archives

  • 2021 (75)
    • January (159)
  • 2020 (658)
    • December (173)
    • November (184)
    • October (169)
    • September (177)
    • August (171)
    • July (169)
    • June (186)
    • May (193)
    • April (202)
    • March (187)
    • February (151)
    • January (131)
  • 2019 (962)
    • December (134)
    • November (128)
    • October (168)
    • September (128)
    • August (173)
    • July (138)
    • June (113)
    • May (159)
    • April (169)
    • March (169)
    • February (141)
    • January (153)
  • 2018 (533)
    • December (150)
    • November (158)
    • October (194)
    • September (131)
    • August (150)
    • July (133)
    • June (128)
    • May (162)
    • April (185)
    • March (155)
    • February (153)
    • January (100)
  • 2017 (418)
    • December (96)
    • November (114)
    • October (52)
    • September (47)
    • August (63)
    • July (38)
    • June (52)
    • May (58)
  • 2016 (1369)
    • December (116)
    • November (107)
    • October (133)
    • September (110)
    • August (125)
    • July (98)
    • June (111)
    • May (142)
    • April (119)
    • March (112)
    • February (91)
    • January (105)
  • 2015 (1290)
    • December (98)
    • November (94)
    • October (89)
    • September (106)
    • August (105)
    • July (87)
    • June (72)
    • May (101)
    • April (134)
    • March (145)
    • February (122)
    • January (137)
  • 2014 (1490)
    • December (112)
    • November (107)
    • October (151)
    • September (120)
    • August (110)
    • July (123)
    • June (109)
    • May (117)
    • April (129)
    • March (153)
    • February (130)
    • January (129)
  • 2013 (1601)
    • December (125)
    • November (176)
    • October (172)
    • September (162)
    • August (131)
    • July (140)
    • June (114)
    • May (123)
    • April (146)
    • March (123)
    • February (87)
    • January (102)
  • 2012 (781)
    • December (23)
    • November (18)
    • October (24)
    • September (78)
    • August (90)
    • July (67)
    • June (68)
    • May (97)
    • April (88)
    • March (86)
    • February (77)
    • January (65)
  • 2011 (449)
    • December (59)
    • November (73)
    • October (23)
    • September (31)
    • August (44)
    • July (34)
    • June (14)
    • May (43)
    • April (20)
    • March (42)
    • February (29)
    • January (37)
  • 2010 (356)
    • December (32)
    • November (45)
    • October (45)
    • September (51)
    • August (58)
    • July (43)
    • May (6)
    • April (1)
    • March (35)
    • February (17)
    • January (23)
  • 2009 (252)
    • December (20)
    • November (18)
    • October (22)
    • September (20)
    • August (15)
    • July (19)
    • June (20)
    • May (20)
    • April (19)
    • March (22)
    • February (19)
    • January (38)
  • 2008 (420)
    • December (38)
    • November (36)
    • October (46)
    • September (40)
    • August (34)
    • July (38)
    • June (36)
    • May (42)
    • April (42)
    • March (28)
    • February (40)

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2021. Mad Hedge Fund Trader. All Rights Reserved. [email protected]
  • Privacy Policy
  • Disclaimer
  • FAQ
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

OKLearn more

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visist to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Accept settingsHide notification only