Global Market Comments
November 9, 2022
Fiat Lux
Featured Trade:
(TESTIMONIAL),
(THE DEATH OF PASSIVE INVESTING),
(SPY), (SPX), (QQQ), (META), (UUP), (GLD), (INDU)
Posts
Global Market Comments
November 4, 2022
Fiat Lux
Featured Trade:
(NOVEMBER 2 BIWEEKLY STRATEGY WEBINAR Q&A),
(SPY), (LLY), (TSLA), (GOOG), (GOOGL), (JPM), (BAC), (C), (BRK), (V), (TQQQ), (CCJ), (BLK), (PHO), (GLD), (SLV), (UUP)
Below please find subscribers’ Q&A for the November 2 Mad Hedge Fund Trader Global Strategy Webinar broadcast from Silicon Valley in California.
Q: The country is running out of diesel fuel this month. Should I be stocking up on food?
A: No, any shortages of any fuel type are all deliberately engineered by the refiners to get higher fuel prices and will go away soon. I think there was a major effort to get energy prices up before the election. If that's the case, then look for a major decline after the election. The US has an energy glut. We are a net energy exporter. We’re supplying enormous amounts of natural gas to Europe right now, and natural gas is close to a one-year low. Shortages are not the problem, intentions are. And this is the problem with the whole energy industry, and the reason I'm not investing in it. Any moves up are short-term. And the industry's goal is to keep prices as high as possible for the next few years while demand goes to zero for their biggest selling products, like gasoline. I would be very wary about doing anything in the energy industry here, as you could get gigantic moves one way or the other with no warning.
Q Is the SPDR S&P 500 ETF (SPY) put spread, correct?
A: Yes, we had the November $400-$410 vertical bear put spread, which we just sold for a nice profit.
Q: I missed the LEAPS on J.P. Morgan (JPM) which has already doubled in value since last month, will we get another shot to buy?
A: Well you will get another shot to buy especially if another major selloff develops, but we’re not going down to the old October lows in the financial sector. I believe that a major long-term bull move has started in financials and other sectors, like healthcare. You won’t get the October lows, but you might get close to them.
Q: I’m waiting for a dip to get into Eli Lilly (LLY), but there are no dips.
A: Buy a little bit every day and you’ll get a nice average in a rising market. By the way, I just added Eli Lilly to my Mad Hedge long-term model portfolio, which you received on Thursday.
Q: Any thoughts about the conclusion of the Twitter deal and how it will affect tech and social media?
A: So far all of the indications are terrible. Advertisers have been canceling left and right, hate speech is up 500%, and Elon Musk personally responded to the Pelosi assassination attempt by trotting out a bunch of conspiracy theories for the sole purpose of raising traffic and not bringing light to the issue. All indications are bad, but I've been with Elon Musk on several startups in the last 25 years and they always look like they’re going bust in the beginning. It’s not even a public stock anymore and it shouldn’t be affecting Tesla (TSLA) prices either, which is still growing 50% a year, but it is.
Q: In terms of food commodities for 2023, where are prices headed?
A: Up. Not only do you have the war in Ukraine boosting wheat, soybean, and sunflower prices, but every year, global warming is going to take an increasing toll on the food supply. I know last summer when it hit 121 degrees in the Central Valley, huge amounts of crops were lost due to heat. They were literally cooked on the vine. We now have a tomato shortage and people can’t make pasta sauce because the tomatoes were all destroyed by the heat. That’s going to become an increasingly common issue in the future as temperatures rise as fast as they have been.
Q: Do I trade options in Alphabet (GOOG) or Alphabet (GOOGL)?
A: The one with the L is the holding company, the one without the L is the advertising company and the stock movements are really identical over the long term, so there really isn’t much differentiation there.
Q: Why can’t inflation be brought down by increasing the supply of all goods?
A: Because the companies won’t make them. The companies these days very carefully manage output to keep prices as high as possible. It’s not only the energy industry that does that but also all industries. So those in the manufacturing sector don’t have an interest in lowering their prices—they want high prices. If they see the prices fall, they will cut back supply.
Q: What do you think about growth plays?
A: As long as interest rates are rising, growth will lag and value will lead, and that has been clear as day for the last month. This is why we have an overwhelming value tilt to our model portfolio and our recent trade alerts. They’ve all been banks—JP Morgan (JPM), Bank of America (BAC), Citigroup (C), plus Berkshire Hathaway (BRK) and Visa (V) and virtually nothing in tech.
Q: I don’t know how to execute spread trades in options so how do I take advantage of your service?
A: Every trade alert we send out has a link to a video that shows you exactly how to do the trade. I have to admit, I’m not as young as I was when I made the videos, but they’re still valid.
Q: Is the US housing market about to crash?
A: There is a shortage of 10 million houses in the US, with the Millennials trying to buy them. If you sell your house now, you may not be able to buy another one without your mortgage going from 2.75% to 7.75%—that tends to dissuade a lot of potential selling. We also have this massive demographic wave of 85 million millennials trying to buy homes from 65 million gen x-ers. That creates a shortage of 20 million right there. That's why rents are going up at a tremendous rate, and that's why house prices have barely fallen despite the highest interest rates in 20 years.
Q: If we get good news from the Fed, should we invest in 3X ETFs such as the ProShares UltraPro QQQ (TQQQ)?
A: No, I never invest in 3X ETFs, because they are structured to screw the investor for the benefit of the issuer. These reset at the close every day, so do 2 Xs and not more. If you're not making enough money on the 2Xs, maybe you should consider another line of business.
Q: Do you think BlackRock Corporate High Yield Fund (HYT) will show the pain of slights because of their green positioning?
A: No I don’t, if anything green investing is going to accelerate as the entire economy goes green. And you’ll notice even the oil companies in their advertising are trying to paint themselves as green. They are really wolves in sheep’s clothing. They’ll never be green, but they’ll pretend to be green to cover up the fact that they just doubled the cost of gasoline.
Q: Where do you find the yield on Blackrock?
A: Just go to Yahoo Finance, type in (BLK), and it will show the yield right there under the product description. That’s recalculated by algorithms constantly, depending on the price.
Q: Do you like Cameco (CCJ)?
A: Yes, for the long term. Nuclear reactors have been given an extra five years of life worldwide thanks to the Russian invasion of Ukraine. Even Japan is opening theirs.
Q: Should I short the US dollar (UUP) here?
A: The answer is definitely maybe. I would look for the dollar to try to take one more run at the highs. If that fails, we could be beginning a 10-year bear market in the dollar, and bull market in the Japanese yen, Australian dollar, British pound, and euro. This could be the next big trade.
Q: What is your outlook on Real Estate Investment Trusts (REITs) now?
A: I think it looks great. REITs are now commonly yielding 10%. The worst-case scenario on interest rates has been priced in—buying a REIT is essentially the same thing as buying a treasury bond, but with twice the leverage, because they have commercial credits and not government credits. We’ll be doing a lot more work on REITS. We also have tons of research on REITS from 12 years ago, the last time interest rates spiked. I'll go in and see who’s still around, and I'll be putting out some research on it.
Q: How do you see the price development of gold (GLD)?
A: Lower—the charts are saying overwhelmingly lower. Gold has no place in a rising interest rate world. At least silver (SLV) has solar panel demand.
Q: Do you have any fear of Korea going into IT?
A: Yes, they will always occupy the low end of mass manufacturing, and you can see that in the cellphone area; Samsung actually sells more phones than Apple, but they’re cheaper phones with lower-end lagging technology, and that’s the way it’s always going to be. They make practically no money on these.
Q: When can we get some more trade alerts?
A: We are dead in the middle of my market timing index, so it says do nothing. I’m looking for either a big move down or big move up to get back into the market. This is a terrible environment to chase trades when you're trading, so I'm going to wait for the market to come to me.
Q: What about water as an investment? The Invesco Water Resources ETF (PHO)?
A: Long term I like it. There’s a chronic shortage of fresh water developing all over the world, and we, by the way, need major upgrades of a lot of water systems in the US, as we saw in Jackson, MS, and Flint, MI.
Q: Will REITs perform as well as buying rental properties over the next 10 to 20 years?
A: Yes, rental properties should do very well, as long as you’re not buying any city that has rent control. I have some rental properties in SF and dealing with rent control is a total nightmare, you’re basically waiting for your tenants to die before you raise the rent. I don’t think they have that in Nevada. But in Las Vegas, you have the other issue that is water. I think the shortage of water will start to drag on real estate prices in Las Vegas.
To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log on to www.madhedgefundtrader.com go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, then WEBINARS, and all the webinars from the last 12 years are there in all their glory.
Good Luck and Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
It’s Been a Tough Market
Global Market Comments
September 30, 2022
Fiat Lux
Featured Trade:
(THE MAD HEDGE SEPTEMBER 13-15 SUMMIT REPLAYS ARE UP),
(WHY WARREN BUFFET HATES GOLD),
(GLD), (GDX), (GOLD), (NEM)
Global Market Comments
September 13, 2022
Fiat Lux
Featured Trade:
(THE NEXT COMMODITY SUPERCYCLE HAS ALREADY STARTED),
(COPX), (GLD), (FCX), (BHP), (RIO), (SIL),
(PPLT), (PALL), (GOLD), (ECH), (EWZ), (IDX)
Global Market Comments
June 7, 2022
Fiat Lux
Featured Trade:
(THE SECOND AMERICAN INDUSTRIAL REVOLUTION),
(INDU), (SPY), (QQQ), (GLD), (DBA),
(TSLA), (GOOGL), (XLK), (IBB), (XLE)
Global Market Comments
May 9, 2022
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or HEADED FOR THE LEPER COLONY),
(SPY), (TLT), (TBT), (BRKB), (TSLA), (GLD), (AAPL), (GOOGL), (MSFT), (NVDA)
My worst-case scenario for the S&P 500 this year was a dive of 20%. We are now off by 14%. And of course, most stocks are down a lot more than that.
Which means that we are getting close to the tag ends of this move. The kind of wild, daily 1,000-point move up and down we saw last week is typical of market bottoms.
Some $7 trillion in market capitalization lost this year. That means we could be down $10 trillion from a $50 trillion December high before this is all over. That’s a heck of a lot of wealth to disappear from the economy.
So, it may make sense to start scaling into the best quality names on the bad days in small pieces, like Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), and NVIDIA (NVDA).
Whatever pain you may have to take what follows, the twofold to threefold gain that will follow over the next five years will make it well worth it. Is a 20% loss upfront worth a long-term gain of 200%? For most people, it is.
Bonds may also be reaching the swan song for their move as well. The United States Treasury Bond Fund (TLT) at $113 has already lost a gobsmacking $42 since the November $155 high.
The markets have already done much of the Fed’s work for it, discounting 200 basis points of an anticipated 350 basis points in rate rises in this cycle. Therefore, I wouldn’t get too cutesy piling on new bond shorts here just because it worked for five months.
Yes, there is another assured 50 basis point rise in six weeks towards the end of June. Jay Powell has effectively written that in stone. We might as well twiddle our fingers and keep playing the ranges until then. We have in effect been sent to the trading leper colony.
The barbarous relic (GLD) seems to be looking better by the day. Q1 saw a massive 551 metric tonnes equivalent pour into gold ETF equivalents, an increase of 203%. Of course, we already know of the step-up in Russian and Chinese demand to defeat western sanctions.
But the yellow metal is also drawing more traditional investment demand. Gold usually does poorly during rising interest rates. This time, it's different. An inflation rate of 8.5% minus an overnight Fed rate of 1.0%, leaving a real inflation rate of negative -7.5%. That means gold has 7.5% yield advantage over cash equivalents.
Gold’s day as an inflation hedge is back!
The April Nonfarm Payroll Report came in near-perfect at 459,000, holding the headline Unemployment Rate at 3.5%. It’s proof that a recession is nowhere near the horizon. A record 2 million workers have recovered jobs during the last four months and 6.6 million over the past 12.
Warren Buffet is Buying Stocks, some $51 billion in Q1. That includes $26 billion into California energy major Chevron (CVX), followed by a big bet on Occidental Petroleum (OXY). These are clearly a bet that oil will remain high for at least five more years. That has whittled his cash position down from $147 billion to only $106 billion. Buffet likes to keep a spare $100 billion on hand so he can take over a big cap at any time. Warren clearly eats his own cooking, buying $26 billion worth of his own stock in 2021. If you can’t afford the lofty $4,773 price for the “A” shares, try the “B” shares at $322.83, which also offer listed options on NASDAQ and in which Mad Hedge Fund Trader currently has a long position.
Elon Musk Crashes His Own Stock, selling $8.4 billion worth last week. His Twitter purchase has already been fully financed, so what else is he going to buy. The move generates a massive Federal tax bill, but Texas, his new residence, is a tax-free state. It continues a long-term trend of billionaires piling fortunes in high tax states, like Jeff Bezos in Washington, and then realizing the gains in tax-free states.
Adjustable-Rate Mortgages are Booming, replacing traditional 30-year fixed-rate mortgage at a rapid pace. Interest rates are 20% lower, but if rates skyrocket to double digits or more in five years, you have a really big problem. ARMs essentially take the interest rate risk off the backs of the lenders and place it firmly on the shoulders of the borrowers.
Travel Stocks are On Fire, with all areas showing the hottest numbers in history. Average daily hotel rates are up 20% YOY, stayed room nights 52%, airfares 39%, and airline tickets sold 48%. Expect these numbers to improve going into the summer.
JOLTS Hits a Record High, with 11.55 million job openings in March, up 205,000 on the month. There are now 5.6 million more jobs than people looking for them. No sign of a recession here. It augurs for a hot Nonfarm Payroll report on Friday.
Natural Gas Soars by 9% in Europe as the continent tries to wean itself off Russian supplies. In the meantime, US producers are refusing to boost output for a commodity that may drop by half in a year, as it has done countless times in the past. If the oil majors are avoiding risk here, maybe you should too.
My Ten-Year View
When we come out the other side of pandemic, we will be perfectly poised to launch into my new American Golden Age, or the next Roaring Twenties. With interest rates still historically cheap, oil peaking out soon, and technology hyper accelerating, there will be no reason not to. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The America coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 240,000 here we come!
With some of the greatest market volatility seen since 1987, my May month-to-date performance lost 4.27%. My 2022 year-to-date performance retreated to 25.91%. The Dow Average is down -9.3% so far in 2022. It is the greatest outperformance on an index since Mad Hedge Fund Trader started 14 years ago. My trailing one-year return maintains a sky-high 56.62%.
On the next capitulation selloff day, which might come with the April Q1 earnings reports, I’ll be adding long positions in technology, banks, and biotech. I am currently in a rare 50% cash position awaiting the next ideal entry point.
That brings my 13-year total return to 538.47%, some 2.30 times the S&P 500 (SPX) over the same period. My average annualized return has ratcheted up to 43.36%, easily the highest in the industry.
We need to keep an eye on the number of US Coronavirus cases at 81.9 million, up 500,000 in a week, and deaths topping 998,000 and have only increased by 5,000 in the past week. You can find the data here.
The coming week is a big one for jobs reports.
On Monday, May 9 at 8:00 AM EST, US Consumer Inflation Expectations are released.
On Tuesday, May 10 at 7:00 AM, the NFIB Business Optimism Index is confirmed.
On Wednesday, May 11 at 8:30 AM, the Core Inflation Rate for April is printed.
On Thursday, May 12 at 8:30 AM, Weekly Jobless Claims are disclosed. Conoco Phillips (COP) reports. We also get the Producer Price Index.
On Friday, May 13 at 8:30 AM, the University of Michigan Consumer Price Index for May is disclosed. At 2:00 PM, the Baker Hughes Oil Rig Count is out.
As for me, not just anybody is allowed to fly in Hawaii. You have to undergo special training and obtain a license endorsement to cope with the Aloha State’s many aviation challenges.
You have to learn how to fly around an erupting volcano, as it can swing your compass by 30 degrees. You must master the fine art of getting hit by a wave on takeoff since it will bend your wingtips forward. And you’re not allowed to harass pods of migrating humpback whales, a sight I will never forget.
Traveling interisland can be highly embarrassing when pronouncing reporting points that have 16 vowels. And better make sure your navigation is good. Once a plane ditched interisland and the crew was found months later off the coast of Australia. Many are never heard from again.
And when landing on the Navy base at Ford Island, you were told to do so lightly, as they still hadn’t found all the bombs the Japanese had dropped during their Pearl Harbor attack.
You are also informed that there is one airfield on the north shore of Molokai you can never land at unless you have the written permission from the Hawaii Department of Public Health. I asked why and was told that it was the last leper colony in the United States.
My interest piqued, the next day found me at the government agency with application in hand. I still carried my UCLA ID which described me as a DNA researcher which did the trick.
When I read my flight clearance to the controller at Honolulu International Airport, he blanched, asking if a had authorization. I answered that yes, I did, I really was headed to the dreaded Kalaupapa Airport, the Airport of no Return.
Getting into Kalaupapa is no mean feat. You have to follow the north coast of Molokai, a 3,000-foot-high series of vertical cliffs punctuated by spectacular waterfalls. Then you have to cut your engine and dive for the runway in order to land into the wind. You can only do this on clear days, as the airport has no navigational aids. The crosswind is horrific.
If you don’t have a plane, it is a 20-mile hike down a slippery trail to get into the leper colony. It wasn’t always so easy.
During the 19th century, Hawaiians were terrified of leprosy, believing it caused the horrifying loss of appendages, like fingers, toes, and noses, leaving bloody open wounds. So, King Kamehameha I exiled them to Kalaupapa, the most isolated place in the Pacific.
Sailing ships were too scared to dock. They simply threw their passengers overboard and forced them to swim for it. Once on the beach, they were beaten a clubbed for their positions. Many starved.
Leprosy was once thought to be the result of sinning or infidelity. In 1873, Dr. Gerhard Henrik Armauer Hansen of Norway was the first person to identify the germ that causes leprosy, the Mycobacterium leprae.
Thereafter, it became known as Hanson’s Disease. A multidrug treatment that arrested the disease, but never cured it, did not become available until 1981.
Leprosy doesn’t actually cause appendages to drop off as once feared. Instead, it deadens the nerves and then rats eat the fingers, toes, and noses of the sufferers when they are sleeping. It can only be contracted through eating or drinking live bacteria.
When I taxied to the modest one-hut airport, I noticed a huge sign warning “Closed by the Department of Health.” As they so rarely get visitors, the mayor came out to greet me. I shook his hand but there was nothing there. He was missing three fingers.
He looked at me, smiled, and asked, “How did you know?”
I answered, “I studied it in college.”
He then proceeded to give me a personal tour of the colony. The first thing you notice is that there are cemeteries everywhere filled with thousands of wooden crosses. Death is the town’s main industry.
There are no jobs. Everyone lives on food stamps. A boat comes once a week from Oahu to resupply the commissary. The government stopped sending new lepers to the colony in 1969 and is just waiting for the existing population to die off before they close it down.
Needless to say, it is one of the most beautiful places on the planet.
The highlight of the day was a stop at Father Damien’s church, the 19th century Belgian catholic missionary who came to care for the lepers. He stayed until the disease claimed him and was later sainted. My late friend Robin Williams made a movie about him but it was never released to the public.
The mayor invited me to stay for lunch, but I said I would pass. I had to take off from Kalaupapa before the winds shifted.
It was an experience I will never forget.
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
Global Market Comments
May 5, 2022
Fiat Lux
Featured Trade:
(A NOTE ON OPTIONS CALLED AWAY)
(TLT), (BRKB), (SPY), (CCJ), (GLD)
As I expected, the markets have continued their march to “cheap”, with the price-earnings multiple plunging in a week from 19X to 17X. This has occurred both through rising earnings and falling share prices.
“Cheap,” is now within range, a mere 10% drop in the (SPX) to $3,800 only 10% away, taking us to a 15X multiple. With the Volatility Index (VIX) at a sky-high $34, in another week we could be there.
The long-term smart money isn’t bothering to wait and has already started to scale into the best names. For now, they are overwhelmed by sellers panicking to sell the next market bottom, as they usually do. That won’t last.
Stocks have seen their worst start to a year since 1942, right after the crushing Japanese attack on Pearl Harbor attack. They didn’t bottom until the US won the Battle of Midway in May, seven months later, even though the public didn’t learn about the strategic victory until months later.
That took the Dow Average down exactly 20%, from $115 to $92. Thereafter, the market began one of the greatest bull moves of all time, exploding from $92 to $240, up 161%.
Dow Average 1939-1942
That is how long and how much we may have to wait for a recovery this time as well with the same long-term outcome.
Those of you who have traditional 60/40 portfolios (60% stocks and 40% bonds), which are most of you, even though I advised against it, have suffered their worst start to a year since 1981, 40 years ago. Both bonds AND stocks have gone down huge.
NASDAQ, the red-headed stepchild of the day, delivered the worst monthly performance since October 2008. Playing from the short side has been like shooting fish in a barrel. The Mae Wests which have floated this market for years have been found to be full of holes.
Consumer discretionary stock delivered a horrific performance. The discretion of consumers right now is to flee stocks and own cash.
I prefer Oracle of Omaha Warren Buffet’s approach. For the first time in years, he is pouring money into stocks, some $51 billion in Q1. That includes $26 billion into California energy major Chevron (CVX), followed by a big bet on Occidental Petroleum (OXY) (click here for my piece at https://www.madhedgefundtrader.com/take-a-look-at-occidental-petroleum-oxy-4/ ).
These are clearly a bet that oil will remain high for at least five more years. That has whittled his cash position down from $147 billion to only $106 billion. Buffet likes to keep a spare $100 billion on hand so he can take over a big cap at any time.
Warren clearly eats his own cooking, buying $26 billion worth of his own stock in 2021. If you can’t afford the lofty $4,773 price for the “A” shares, try the “B” shares at $322.83, which also offer listed options on NASDAQ and in which Mad Hedge Fund Trader currently has a long position.
Rather than fleeing what you already own, because it’s too late, you’re better off building lists of what to buy at the bottom. And the farther the market falls, the more volatility I am looking for.
Investors are salivating at the demise of Cathy Wood’s Ark Innovation ETF (ARKK), which has collapsed by 72% in 14 months. In the meantime, the short Ark ETF (SARK) rose by 50% in April Alone.
You can scale into (ARKK) on the next Armageddon Day. Better yet, you can pick up their ten largest holdings. Those include:
Tesla (TSLA)
Zoom (ZM)
Roku (ROKU)
Coinbase (COIN)
Block (BLOK)
Exact Sciences (EXAS)
Unity Software (U)
Teladoc (TDOC)
Unity
UiPath (PATH)
Over five years, you can expect two of these to go bust, three to do nothing, two to get taken over at a 50% premium, one to double, one to go up ten times, and one to go up 50 times. If you do the math on this, it’s pretty attractive. Guess which one I think is going up ten times?
After listening to endless talking heads postulating about what Bitcoin is, I have finally come up with a definition. It is a small-cap non-earning stock. For that is the asset close showing the closest correlation in the current meltdown. That is not good because I expect small-cap non-earning stocks to go nowhere for the foreseeable future. Don’t hold your breath, but when they turn, you can expect a 2X-10X return on investment, as we did before.
My Ten Year View
When we come out the other side of the pandemic, we will be perfectly poised to launch into my new American Golden Age or the next Roaring Twenties. With interest rates still historically cheap, oil peaking out soon, and technology hyper-accelerating, there will be no reason not to. The Dow Average will rise by 800% to 240,000 or more in the coming decade. The America coming out the other side of the pandemic will be far more efficient and profitable than the old. Dow 240,000 here we come!
My April month-to-date performance added a decent 3.33%. My 2022 year-to-date performance ended at a chest-beating 30.18%. The Dow Average is down -13.5% so far in 2022. It is the greatest outperformance on an index since Mad Hedge Fund Trader started 14 years ago. My trailing one-year return maintains a sky-high 62.56%.
On the next capitulation selloff day, which might come with the April Q1 earnings reports, I’ll be adding long positions in technology, banks, and biotech. I am currently in a rare 100% cash position awaiting the next ideal entry point.
That brings my 13-year total return to 542.74%, some 2.10 times the S&P 500 (SPX) over the same period. My average annualized return has ratcheted up to 43.71%, easily the highest in the industry.
We need to keep an eye on the number of US Coronavirus cases at 81.4 million, up only 300,000 in a week, and deaths topping 993,000 and have only increased by 5,000 in the past week. Wow, we only lost the equivalent of 12 Boeing 747 crashes in a week! Great news indeed. You can find the data here at https://coronavirus.jhu.edu.
The coming week is a big one for the jobs reports.
On Monday, May 2 at 7:00 AM EST, the ISM Manufacturing PMI is published. NXP Semiconductors (NXPI) reports.
On Tuesday, May 3 at 7:00 AM, the JOLTS Job Openings report is announced. Skyworks Solutions Reports (SWKS).
On Wednesday, May 4 at 8:30 AM, ADP Private Sector Employment Change is printed. At 11:00 AM the Federal Reserve announced its interest rate decision. Jay Powell’s press conference follows at 11:30. Moderna (MRNA) reports.
On Thursday, May 5 at 8:30 AM, Weekly Jobless Claims are disclosed. Conoco Phillips (COP) reports.
On Friday, May 6 at 8:30 AM, the Nonfarm Payroll Report for April is released.
At 2:00 PM, the Baker Hughes Oil Rig Count are out.
As for me, I spent a decade flying planes without a license in various remote war zones because nobody cared.
So, when I finally obtained my British Private Pilot’s License at the Elstree Aerodrome, home of the WWII Mosquito twin-engine bomber, in 1987, it was cause for celebration.
I decided to take on a great challenge to test my newly acquired skills. So, I looked at an aviation chart of Europe, researched the availability of 100LL aviation gasoline, and concluded that the farthest I could go was the island nation of Malta.
Caution: new pilots with only 50 hours of flying time are the most dangerous people in the world!
Malta looms large in the history of aviation. At the onset of the second world war, Malta was the only place that could interfere with the resupply of Rommel’s Africa Corps, situated halfway between Sicily and Tunisia. It was also crucial for the British defense of the Suez Canal.
So, Malta was mercilessly bombed, at first by Mussolini’s Regia Aeronautica, and later by the Luftwaffe. By April 1942, the port at Valletta became the single most bombed place on earth.
Initially, Malta had only three obsolete 1934 Gloster Gladiator biplanes to mount a defense, still in their original packing crates. Flown by volunteer pilots, they came to be known as “Faith, Hope, and Charity.”
The three planes held the Italians at bay, shooting down the slower bombers in droves. As my Italian grandmother constantly reminded me, “Italians are better lovers than fighters.” By the time the Germans showed up, the RAF had been able to resupply Malta with as many as 50 infinitely more powerful Spitfires a month, and the battle was won.
So Malta it was.
The flight school only had one plane they could lend me for ten days, a clapped-out, underpowered single-engine Grumman Tiger, which offered a cruising speed of only 160 miles per hour. I paid extra for an inflatable life raft.
Flying over the length of France in good weather at 500 feet was a piece of cake, taking in endless views of castles, vineyards, and bright yellow rapeseed fields. Italy was a little trickier because only four airports offered avgas, Milan, Rome, Naples, and Palermo. Since Italy had lost the war, they never experienced a postwar aviation boom as we did.
I figured that if I filled up in Naples, I could make it all the way to Malta nonstop, a distance of 450 miles, and still have a modest reserve.
Flying the entire length of Italy at 500 feet along the east coast was grand. Genoa, Cinque Terra, the Vatican, and Mount Vesuvius gently passed by. There was a 1,000-foot-high cable connecting Sicily with the mainland that could have been a problem, as it wasn’t marked on the charts. But my US Air Force charts were pretty old, printed just after WWII. But I spotted them in time and flew over.
When I passed Cape Passero, the southeast corner of Sicily, I should have been able to see Malta, but I didn’t. I flew on, figuring a heading of 190 degrees would eventually get me there.
It didn’t.
My fuel was showing only quarter tanks left and my concern was rising. There was now no avgas anywhere within range. I tried triangulating VORs (very high-frequency omnidirectional radar ranging).
No luck.
I tried dead reckoning. No luck there either.
Then I remembered my WWII history. I recalled that returning American bombers with their instruments shot out used to tune into the BBC AM frequency to find their way back to London. Picking up the Andrews Sisters was confirmation they had the right frequency.
It just so happened that buried in my pilot’s case was a handbook of all European broadcast frequencies. I look up Malta, and sure enough, there was a high-powered BBC repeater station broadcasting on AM.
I excitedly tuned in to my Automatic Direction Finder.
Nothing. And now my fuel was down to one-eighth tanks and it was getting dark!
In an act of desperation, I kept playing with the ADF dial and eventually picked up a faint signal.
As I got closer, the signal got louder, and I recognized that old familiar clipped English accent. It was the BBC (I did work there for ten years as their Tokyo correspondent).
But the only thing I could see were the shadows of clouds on the Mediterranean below. Eventually, I noticed that one of the shadows wasn’t moving.
It was Malta.
As I was flying at 10,000 feet to extend my range, I cut my engines to conserve fuel and coasted the rest of the way. I landed right as the sunset over Africa.
While on the island, I set myself up in the historic Excelsior Grand Hotel. Malta is bone dry and has almost no beaches. It is surrounded by 100-foot cliffs. I paid homage to Faith, the last of the three historic biplanes, in the National War Museum in Valetta.
The other thing I remember about Malta is that CIA agents were everywhere. Muammar Khadafy’s Libya was a major investor in Malta, recycling their oil riches, and by the late 1980’s owned practically everything. How do you spot a CIA agent? Crewcut and pressed creased blue jeans. It’s like a uniform. What they were doing in Malta I can only imagine.
Before heading back to London, I had to refuel the plane. A truck from air services drove up, dropped a 50-gallon drum of avgas on the tarmac along with a pump then they drove off. It took me an hour to hand pump the plane full.
My route home took me directly to Palermo, Sicily to visit my ancestral origins. On takeoff to Sardinia wind shear flipped my plane over, caused me to crash, and I lost a disk in my back.
But that is a story for another day.
Who says history doesn’t pay!
Stay Healthy,
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
“Faith”
The Andrews Sisters
Spitfire
Grumman Tiger
