Parting Thoughts on a New Era
Apr 05, 2021 | Educational
The first quarter of 2021 — which closed on March 31 — was the worst quarter for U.S. Treasury bonds since 1980. The last time treasuries looked this ugly, Paul Volcker was Chairman of the Federal Reserve, and Jimmy Carter was president. Prior to last quarter, bond prices at the long end of the curve (the 10-year and 30-year) had…
The Saudis are Underestimating U.S. Shale — For the Second Time in Less Than a Decade
Mar 25, 2021 | Educational
In early December 2020, TradeSmith Decoder turned aggressively bullish on energy stocks. We bought a sizable basket of fossil-fuel-related energy names at that time — eight in all — anticipating a recovery-fueled share price surge as a result of resurgent oil demand. That overall basket did quite well, providing multiple instances of either triple-digit gains or close to triple-digit gains,…
ARK’s Latest Tesla Target is Completely Nuts (With Zero Incentive to Be Rational)
Mar 23, 2021 | Educational
Tesla’s share price — which closed 24% off its highs yesterday — saw a nice little bounce (though still down 24%) after ARK Investment management released its latest Tesla price targets for 2025. The targets are not just unrealistic, they are laugh-out-loud unrealistic, almost to the point of being nonsensical. They offer three levels: “Bear case”: TSLA reaches $1,500 by…
Breaking Down the ‘Big Market Delusion’ in EV Stocks
Mar 19, 2021 | Educational
Wild and weird developments continue to unfold in the electric vehicle (EV) space. For instance, Elon Musk gave himself a new official title this week: “Technoking of Tesla.” Zach Kirkhorn, the Chief Financial Officer of Tesla, was also given a new title: “Master of Coin.” It sounds like a joke, but it isn’t. Or rather, Musk’s actions might be a…
Imagining Bitcoin as a FANG Stock
Mar 18, 2021 | Educational
In the TradeSmith Daily for Oct. 12, 2020, we wrote: If you haven’t bought Bitcoin for the first time yet, the odds are good that you will. The question is whether you will do it sooner — and be glad that you did — or do it later and wish you had acted much earlier. Bitcoin as priced in U.S….
The ‘Bitcoin is Bad for the Environment’ Argument is an Intellectually Dishonest Red Herring
Mar 11, 2021 | Educational
Whereas a cat has nine lives, Bitcoin appears to have 400-plus and counting. 99Bitcoins, a crypto site, has a “Bitcoin Obituaries” page that tracks media declarations of Bitcoin’s death. There have been 403 “Bitcoin is dead” instances as of this writing — 10 of them in 2021 alone — with the oldest dating to Dec. 15, 2010. And yet, for…
The US Dollar Will Rip and Run in 2021
Mar 10, 2021 | Educational
In 2020, arguably the single best asset to own in size was Bitcoin. For the coming year, that could easily hold true once again, with BTC having a reasonable shot at it before the year is out. Apart from Bitcoin — which is practically its own asset class — one of the assets we are most bullish on is the…
It Begins: Why We’re Seeing a Paradigm Shift Toward Sustained Inflation
Mar 08, 2021 | Educational
Our view of inflation is complicated, but not too complicated. In TradeSmith Decoder, we have large-sized bullish U.S. dollar forex positions as of this writing, and short precious metals positions, because the near-term mantra is “growth first, inflation later.” These positions are doing quite well. A little bit of history may help clarify our stance. While the 1970s were a…
The Federal Reserve Can’t Help Investors Now
Mar 05, 2021 | Educational
Thursday (March 4) was a pleasantly bullish day with plenty of green on the tape — if you were long energy stocks, that is. The crude oil price shot higher, with West Texas Intermediate in the $64 range, after a surprise decision from the Saudis to maintain their million-barrel-per-day production cut. This was excellent news for oil and gas-related names,…
Crude Has Some Good Years Left (the Oil Age isn’t Over Yet)
Feb 18, 2021 | Educational
“The stone age did not end because the world ran out of stones, and the oil age will not end because we run out of oil.” The Economist attributed that pithy statement to Don Huberts, the head of Shell Hydrogen, in 1999. According to New York Times columnist Tom Friedman, it was first said by Sheikh Ahmed Zaki Yamani, Saudi…
