January 1 Post

Happy New year!

S&P 500 gained 17% in 2025. Nasdaq went up by 20%. Almost all other countries beat the US market; Columbia-92%, Brazil-50%, China-30%, UK-30%, Germany-40%, Spain-70%, Korean-70%. If you had money in international markets, pat yourself on the back. Our “scorecard” portfolio had a 26.12% gain in 2025. Best performing known stocks in the US for 2025: Robinhood (HOOD)-230%. When it was at $20 I considered buying but I only got in when it hit $38 on 11/25/24; now it is at $113, after topping at $152 in October 2025. The best-performing US stocks in 2025 were heavily concentrated in data storage, semiconductors, and AI-related sectors, and gold mining stocks. Western Digital, Seagate, Micron (MU), Palantir, Warner Brothers all had gains over 100% in 2025.

I made some changes to our stock portfolio. These changes will show on our scorecard from February 2026. I removed ADBE (Adobe) , Disney and Salesforce and replaced them with Costco (Cost), IBIT (bitcoin ETF) and  D-Wave Quantum Inc. (QBTS). Removed Adobe as it has been down for many months and per Wall Street experts, AI will destroy this company. As for Disney, since 1/1/23, Disney has been stuck in a range between $80 and $120. Every time Disney fall below $90, I buy it as a short term trade. To remove Salesforce (CRM) was a difficult choice and I do not know if I made the right decision. Their success with AI might come back to haunt them. For one thing, companies using CRM are now working with less employees so going forward those employers will need less CRM annual licenses. On the other hand, the “salesforce agentforce” could increase their earning potential in the future. I replaced them with Costco (Cost), IBIT (Bitcoin ETF) and D Wave Quantum (QBTS). For the past 10 years, the best retail stocks were Walmart and Costco. However, they were too expensive (too high P/E or price to earnings ratio). Analysts were not satisfied with the last Costco earnings call so the stock fell-buying opportunity! Can you find anyone who has not heard of AI? For the past few years, the  AI craze has been dominating Wall Street. I wanted to get in early on the “next craze”. I bet that the next craze will be on quantum computing. Some say that it will take a few more years but I do not believe that. On my personal account I bought some D-Wave (QBTS) on 1/1/25 and that is up by 700% by 12/25/25! It is still losing money ($1.15 per share) so this is very speculative and risky. Higher the risk, higher the return! Per Jeffries, QBTS is supposed to double in 2026. We hold Tesla and it was at $485 on 12/25/25, per tech expert, Dan Ives, Tesla will go up to $800 in 2026.

On a daily basis, 24/7, Wall Street experts are arguing about the current AI bubble and comparing it to the ‘dot come’ bubble that burst soon after 2000. Just because there are differences, it does not mean that this bubble will also burst in a tragic way and AI stocks will go down 70% as it happened after the ‘dot come’ bubble burst. As always we have keep 25% + in cash at all times so we can recover after a crash. Crashes happen unexpectedly. During the ‘dot com’ bubble US companies over invested in the internet infrastructure. As an economist pointed out, without that over investment during the ‘dot com’ bubble, companies like Netflix and Uber would not have come up. Even with this AI over investment, we could see amazing things in the future. The downside is also true. These trillion dollar companies would get richer while millions of people will lose their jobs. We do nor have any guardrails. The Chinese government instructed all self-drive taxi companies not to charge less than other taxis. The rapid expansion of AI data centers is a primary driver of rising U.S. electricity demand and, consequently, increasing residential energy prices. This surge in demand is outpacing new energy supply and requiring costly upgrades to the power grid, the expenses of which are often passed on to consumers. Rich will get richer and the poor will get poorer. Is the cost of AI worth it? A former bank executive that came on the TV show, “Wall Street” (on PBS) stated that he is in the process of creating a bank with AI and no employees. Will you trust your money at that bank? Not me. Banks are highly regulated for obvious reasons. The future will be interesting. I feel that most of these utopian projects will fail but they will make an attempt to turn it in to reality. Per CNBC, 12/17/25, property investors are saying that multi trillion tech giants are refusing to own and finance their data centers; they want that done through private capital-“off balance sheets” for the Mag7. Private capital is in a real bubble but when they go down, they will take down public companies too.

As I stated in my last newsletter, Oracle is in trouble. Judging from their credit default swaps, investors have doubts about their ability to pay off their debts. Out of the big tech companies, Oracle is the only company with negative cash flow. On 12/10/25, Oracle announced that they are determined to maintain their investment grade bond status. Good luck with that! They also announced they were going to delay building of data centers from 2027 to 2028.Oracle is in trouble; and so is Open AI. Oracle will borrow more money in 2026. Oracle stock is down almost 50% within the past 3 months. Larry Ellison has taken these huge risks in the past too. Even though this is extremely risky and speculative, I will consider “nibbling” (buying)at it if Oracle drops below $100. On 9/11/25, it was at $328. On 12/17/25, it dropped to $178. Oracle Credit Default Swaps hit a 16 year old high on 12/4/25, as Oracle bond holders are trying to sell their bonds. Softbank like Oracle down 40% in 2025 ; and Credit Default Swaps going up like Oracle. Three years ago, Google sounded a “Code Red” over ChatGPT, with CEO Sundar Pichai warning it could threaten the future of Search. Now Sam Altman is sounding an alarm of his own—this time over Google’s Gemini 3 comeback and an increasingly fierce frontier AI model race with OpenAI’s rivals, including Anthropic and Meta.

Since President Donald Trump's 'Liberation Day' tariffs pushed the U.S. bond market into revolt in April, his administration has carefully tailored its policies and messaging to prevent another flareup. But the truce remains fragile, some investors say. A reminder of that fragility came on November 5 when the Treasury Department signaled it was considering selling more long-term debt. The same day, the Supreme Court began hearing arguments over the legality of Trump's sweeping trade tariffs. Benchmark 10-year bond yields, which have fallen steeply this year, spiked more than 6 basis points – one of the biggest jumps in recent months. With the market already uneasy about the size of U.S. federal deficit, the Treasury proposal stirred fears among some investors of upward ​pressure on long-dated bond yields. The Supreme Court case, meanwhile, raised doubts about a major source of revenue to service the $30 trillion pile of government debt held by the market. Citigroup analyst Edward Acton called the moment “a reality check" in a November 6 daily report. Reuters spoke to more than a dozen executives at banks and asset managers overseeing trillions of dollars in assets who said that beneath the relative ‌calm of bond markets in recent months a battle of wills is playing out between the administration and investors concerned about the persistently high U.S. deficit and debt levels. “Bond markets’ ability to terrify governments and politicians is second to none, and you've seen that in the U.S. this year,” said Daniel McCormack, head of ‌research at Macquarie Asset Management, referring to April’s bond crash which forced the administration to temper its plans for tariff increases. (Reuters, NY,12/29/25)

Some say that “quantum computing” would be able to decode Bitcoins and other cyptos! If true, it could create a huge financial disaster in the future. Stay tuned!

On 12/10/25, the Federal Reserve cut rates by another ¼%. Three board members dissented- two wanted to keep rates at the current rate and one (guess who?) wanted a ½% rate cut. We could have one more cut in 2026. Feds will start buying short term treasuries soon. They said that the 2025 GDP will be high as the economy is growing slowly. Feds to buy $40 billion is treasuries.

On 12/10/25, Fed Chair Powell made the following comments:

·      The labor market is cooling

·      Housing market is weak.

·      GDP will grow by 1.6% in 2025.

·      Layoffs low and unemployment rate is high-due to lower immigration.

·      Deflation is going on in the service sector.

·      Wealthy are doing well while the middle class and poor are struggling.

·      After covid we made a faster recovery than other countries due to our great economy.

Jeffrey Edward Gundlach is the founder, CEO, and CIO of DoubleLine Capital, a Los Angeles-based investment firm that specializes in debt securities and bonds. He's known as the "Bond King" and is recognized as an expert in fixed income and bond investments.  On 12/10/25, Jeffrey made the following comments:

·      Monthly job gains are overstated.

·      Inflation well contained around 2%.

·      After a long time the Fed Rate is equal to the 2 year treasury. Goal of all central bankers.

·      Feds are concerned about the growing unemployment rate.

·      In the past we had QT (quantitative tightening) but now we are going in to QE (quantitative easing).

·      ‘While Feds were cutting rates, the 10year treasury rates have been going up so mortgage rates are rising.

·      Gundlach agree that the Feds are “well positioned”.

·      They were more dovish than people expected.

·      Investment grade bods are doing great.

·      2025 has been a great year for dollar based investors in foreign markets.

·      Powell may not cut rates till he gets removed in May 2026.

·      Long end bond yields are going higher as bond investors are concerned that tax cuts would increase inflation.

·      Treasury bills (short term) are 2/3 of treasury issuances- rest are bonds.

·      When silver prices go up in a frenzy as it has been happening lately, and even beating gold, it is a sign that we are heading for economic problems in the future-but that could take some time to materialize.

·      All Fed Chairs get tested so expect the new Fed Chair to gate tested around the summer/fall of 2026. Expect volatility in the bond/stock markets.

What is interesting is that in January 1980, Silver experienced a blowoff type move that culminated with Silver reaching near $50 an ounce for the first time in history following the Hunt Brothers' attempt to corner the futures market. Silver ultimately peaked in January 1980 and came crashing back down. That 1980 high then held for decades to come. Fast forward to today, and Silver seems to be making the same type of blowoff move during the time the same planetary aspect is again in effect. No one knows when or at what level Silver ultimately peaks for this cycle, but it might be prudent to keep the words of Mark Twain in mind: “History doesn’t repeat itself, but it often rhymes.” (Merriman Market Analyst (astrology), 12/15/25)

People assume that gold will keep gong up forever and it is a good hedge against market crashes. I  disagree. Gold hit an inflation adjusted an all time high over $3,000 in 2025 which was inflation adjusted previous all time high of $800 in 1980. What happened to gold after the 1980 high? It went down for decades till it got down to $300!

Have a great 2026!

December 1 Post

Hello Again,

Netflix had a 10-for-1 stock split that took effect after the market closed on Friday, November 14, 2025, and shares began trading on a split-adjusted basis on Monday, November 17, 2025. Our scorecard and newsletter got adjusted accordingly.

We had a minor correction in November but the fear factor went through the roof. This is very healthy. Look at our score card- our portfolio went down by 8.34% in November. Emotions run the market. The fear factor rose more than the actual decline in the market. CBOE Volatility Index (aka Fear Guage) was at 15.79 on 10/27/25 but on 11/20/25,it was at 26.42! I always keep a few put options on the S&P 500 index as a hedge against a major market crash.  My current puts have a strike price of 200-in other words to get them assigned, the S&P 500 index has to drop from 6800 to 2000. Like paying for insurance premiums, I expect all these to expire worthless (as a tax deduction). I thought for me to have a gain in my puts the S&P 500 index will have to drop at least 30% but when the S&P dropped 3%, my puts had a paper gain of 15%!. There is a lot of fear in the market and that is a good thing. People are selling the tech giants and buying things like healthcare (sure losers).

Just before the 2024 November election, Japan “Yen Carry” trade came apart. Prior to that hedge funds borrowed from Japan at 0% and invested in tech- that was the story we were told. However, what I discovered then was that it hit bitcoins hard. I have gone in and out of Bitcoins thru the ETF, “ iShares Bitcoin Trust ETF (IBIT)”.Last year when IBIT dropped sharply due to the “Yen Carry Trade” I bought some of it. Then Trump won the election and Bitcoins/IBIT rose sharpy. On 11/21/25, CNBC reported on the “Japans Yield Shock”- bond yields rising in Japan. Once again, bitcoins are dropping. I hope it would drop 60% to 80%-which is normal for Bitcoins. This would create a great trading opportunity! In order to “reap”, you have to “sow” first. Happy hunting!

Are we in an AI bubble? Yes! How long will the bubble last until the whole market crashes? All this time it was stated that all the biggest tech companies (unlike the dot com stocks of 1999) have solid balance sheets; and they are making these billions of dollars in purchases with cash flow so there was nothing to be concerned. Now we are getting to know another story. In the past few month, 5 of the biggest tech companies have been borrowing over $100 billion in the bond market. Also, there are rumors of accounting fraud (very dangerous!). Michael Burry (“big short” fame from 2008) is back. Burry’s claim is audacious: these AI darlings are dangerously overvalued. The heart of his argument boils down to a fundamental accounting disagreement. He alleges that other companies are overstating the useful life of AI chips by stretching depreciation schedules beyond the typical two to three years. Burry argues this practice artificially inflates valuations and masks looming capital risks. Out of the biggest AI tech companies who is at most risk? Oracle- the only one in the trillion dollar “club” who has negative cash flow-just turned negative! All experts have doubts that Oracle will be able to get all that it has been promised.  Per CNBC on 11/25/25, over the past 3 months, “Credit Default Swaps” for Oracle  went up from $25 to $125 -400% gain in about 120 days!!! What is a “credit default swap”? A credit default swap (CDS) is a financial derivative that acts like an insurance policy against the default of a bond or loan. The buyer of a CDS makes periodic payments to the seller, and in return, the seller agrees to pay the buyer a lump sum if the underlying debt instrument, like a bond, goes into default. While often used to hedge risk, CDSs can also be used for speculation, as a buyer doesn't need to actually own the underlying asset to purchase a CDS. So…. Oracle bond buyers are afraid that Oracle will not be able to pay back their bonds! The bond market is much bigger than the stock market and bond “gurus’ are much more prudent that stock buyers. If Oracle declares bankruptcy, their bond holders get paid before the people who hold Oracle stocks. Right now (can change from day to day) Larry Ellison, Executive Chairman of Oracle is the 3rd richest man in the world with $256 Billion due to his Oracle stocks. Most experts believe that Oracle is out of control. Debt level of the 3 biggest tech companies for the past 3 months is bigger than the debt level they carried for the past 3 years (CNBC 11/12/25). On 11/18/25 the CEO of Google stated that if the AI bubble burst and crash, no company, including google will NOT be safe.

For the past 12 months, Wall Street experts hated Apple stating that they are not doing enough to make use of the “AI revolution” and the Apple stock suffered. Now that story has flipped. For one thing, whoever wins the AI race will have to use Apple (and vice versa) to reach billions of people. Apple also has a reputation of piggybacking on others. Apple did not “waste” billions and get in to debt. Last Qtr Apple had $54Billion in cash. For years it was $200Billion. Now Wall Street experts are buying Apple hand over fist. In my opinion, Apple spending over $100Billion per year to buy back their own stock is a waste of money-financial engineering.

Ever since Open AI came up with Chat Gpt, all Wall Street pundits have been saying that AI will destroy the “cash cow” at Alphabet aka Google- Google search was 56% of revenue at Alphabet in 2024. I did not buy that argument. Obviously, it will have an impact on Alphabet aka Google but I think it is going to be minor. Alphabet has other revenue streams and more yet to come. People say that Netflix is the biggest media company but Youtube is bigger. Meta who is in the process of spending hundreds of billions on AI, prompts me to ask anything but when I ask the same question from Meta AI and Google AI (free unlike chat gpt etc), I get the best answer from Google.  Salesforce is one of the companies that will introduce AI to many global companies.  On 11/24/25, CEO of Salesforce stated that he has been using Chat GPT for years and recently for the first time he used the new Gemini of Alphabet/Google and he said he was so amazed that he will never go back to Chat GPT again (by Open AI)!!  The CFO of Open AI unnerved Wall Street by asking for government assistance. Next year Open AI is supposed to go public with a market cap over a trillion dollars! Scary! OpenAI has recently sought U.S. government assistance for its AI infrastructure expansion, primarily through tax credit expansions and expedited permits, though top executives have publicly denied asking for a "bailout" or loan guarantees. (Per Google AI).

So the fun goes on!

Have a great month! Happy Holidays!   

Fernando                    

November 9 Post

Hi Again,

Since 11/1/25, we have been going through a minor correction. This is very healthy. Wall Street always climb a wall of worries. What is the latest worry? It was believed that the top tech companies were using their cash flow to make these huge investments in AI data centers etc., but now it is clear that this is being done with debt (via the bond market). The top 5 companies have recently “borrowed” over $100 Billion for this purpose. Open AI is not a public company (not yet- next year they could go public with a market cap of over a trillion dollars!) but it is a big threat to all the hyperscalers including Meta and Google. This week the CFO of Open AI got in to trouble by suggesting the US government. OpenAI's CFO, Sarah Friar, sparked controversy by suggesting the US government should provide "backstops" or loan guarantees for massive AI infrastructure investments, a move she later clarified was not a request for a government bailout. Friar stated that the government's role is to work alongside the private sector to support American technological leadership, not to bail out a company. She initially explained that a government guarantee could lower financing costs and make it easier for companies like OpenAI to secure large loans for expensive projects. Is the AI bubble ready to burst? Remember the China’s “Deep Seek” episode? The emergence of DeepSeek AI did trigger significant short-term volatility and a sharp sell-off in specific AI-related stocks, particularly Nvidia, in January 2025 (which followed the strong 2024 performance). Recently the CEO of NVIDIA stated that China will beat the US in the AI race. Out of the blue, China could announce another “Deep Seek” scare and that could burst the AI stock market bubble in the US. This time around it could take a different form and not specifically like the “Deep Seek” announcement. It could come from another country/source too. Who is Michael Burry? In 2005, Burry started to focus on the subprime market. Through his analysis of mortgage lending practices in 2003 and 2004, he correctly predicted that the real estate bubble would collapse as early as 2007. His research on the values of residential real estate convinced him that subprime mortgages, especially those with "teaser" rates, and the bonds based on these mortgages, would begin losing value when the original rates were replaced by much higher rates, often in as little as two years after initiation. This conclusion led him to short the market by persuading Goldman Sachs and other investment firms to sell him credit default swaps against subprime deals he saw as vulnerable. n an April 3, 2010 op-ed for The New York Times, Burry argued that anyone who studied the financial markets carefully in 2003, 2004, and 2005 could have recognized the growing risk in the subprime markets.[15] He faulted federal regulators for failing to listen to warnings from outside a closed circle of advisors. Now Burry is short selling NIVIDIA and other AI stocks via put options. I do not believe that we should short sell these stocks but it is prudent to have some “out of the money” put options (very cheap) on these stocks so we could use that as a hedge against an “AI crash”. Even puts on the market (S&P 500) would be okay as an AI crash is sure to lead to a market crash. The "Magnificent 7" stocks now make up over one-third of the S&P 500's market capitalization, with recent estimates putting the percentage around 37% to 39%. This concentration is a historic high for the group, significantly impacting the index's performance and increasing diversification concerns for investors, notes “Forbes”. Are AI stocks in a bubble? Nvidia went from a market cap of $300 Billion to $5 Trillion in 2 years!

On 10/16/24 regional banks got crushed due to bad loan losses. JPMorgan CEO Jamie Dimon expects to see more bankruptcies like First Brands’ if the private credit market goes into an economic downturn. “I probably shouldn’t say this, but when you see one cockroach, there are probably more. And so we should—everyone should be forewarned on this one,” he told analysts on his Q3 earnings call. More broadly, JPMorgan, Goldman Sachs, and Citi all said their private credit books were diversified and high-grade. Executives at JPMorgan, Goldman Sachs, and Citi all used their earnings calls yesterday to assure investors that the bankruptcy of auto parts supplier First Brands—which had borrowed more than $10 billion—did not mean that the private credit market is systemically weak.

On 10/29/25 the Federal Reserve decided to cut interest rate by another ¼%. They also stated that they will stop quantitative tightening (QT) by December 2025. Inflation remains elevated. Two governors dissented Every ¼% cut saves the US government $88 billion per year.

On 10/29/25 Fed Chair Jerome Powell stated:

·      Unemployment remained low through August 2025.

·      Inflation has gone down significantly since 2022 but remains high.

·      There were 2 dissenters. Miran wanted a ½% cut.

·      Economy is expanding at a moderate pace.

·      Job gains slowed.

·      Inflation risk is up and unemployment risk is up.

·      Housing inflation has been coming down for a while.

·      Feds want inflation down to 2%.

·      Inflation minus tariffs is at 2%.

·      Economy is expected to grow at 1.6% in 2025.

·      Job creation is very low.

·      Subprime credit losses are rising. Auto finance companies are in bankruptcies are rising.

·      Not sure if they will cut rates again in December 2025.

Jeffrey Edward Gundlach is the founder and CEO of DoubleLine Capital, an investment firm. He graduated summa cum laude from Dartmouth College with degrees in philosophy and mathematics, and also studied mathematics as a PhD candidate at Yale. In 2011, Barron's named him "The New Bond King" and in 2013, Institutional Investor called him "Money Manager of the Year".  On 10/29/25, as he does always after a Fed decision, Gundlach made the following remarks:

·      There will be no rate cut in December

·      The 2 year and 10 year treasury rates did nor move after the rate cut. Unusual.

·      Possibly we will have a steep yield curve.

·      Feds might get in to quantitative easing to lower mortgage rates by buying mortgage securities.

·      Inflation will stay above 3% till 12/31/26

·      Defaults showing in private credit.

·      Do not buy lower end treasuries; buy corporate credit.

·      10 year corporate bonds are great

·      Gundlach who has been correct on his call to buy gold for the past 2+ years. Sold off his gold holdings. Expect gold to go down by 50%.

·      People should have 15% in cash

·      Over investments in private credit might lead us to the next financial crisis

Have a great month!

Fernando

October 9 Post

Hi Gang

We escaped the dreaded September! What was the number one topic among “Wall Street Gurus” during September? Comparing this current “AI bubble” to the “dot com” bubble of the 1990s. If we are ready for any outcome, whatever happens, we will be okay. The biggest winners of the dot.com bubble were not the companies who benefited mostly from the internet. To see if a stock is over-valued, we have to look at the PE (price to earnings). Is the PE too high? However, valuations are not driving these stocks. NVIDIA, the #1 AI stock has a PE of 53. For most companies, it is too high.  TESLA has a PE of 270- way too high by any measure but it a vote on Elon Musk to grow the company in the future. Tesla is a tech company and not a car company. When insiders buy back their own stocks, it is a good sign.  Musk just bought back $1 billion of Tesla stocks! Just before the dot-com crash Yahoo (the then Google) had a PE of 1,000! After the crash it went down to about zero. What happened in the dot-com crash? NASDAQ or tech stocks peaked in the Spring of 2000 and it went down 78% and bottomed in 2002. For me this is good news. Let us hope that all crashes take 2 years to bottom. I always keep a few “shorts” (put options the SPY index) as a hedge. As the market goes down, I sell some at a gain and buy more and I keep repeating the process. Using this method, when the markets crashed in 2020 due to covid, I made a 1233% gain. Prior to 2000, investors avoided tobacco stocks due to litigation risk. Then I did a “deep dive” in to Phillip Morris. It was paying an annual dividend of 9%. They were well reserved for their litigation risks they faced. Only 40% of their revenue came from US tobacco. They owned a beer company and a food company-if they operated as separate public companies, they would have had a higher market cap than the market cap the market was willing to give PM at that time. Over the next 5 years the stock price of PM tripled and their dividend remained above 5%. NVIDIA with its market cap close to $5 Trillion has become a bank to all AI companies. “Vendor Financing” is a scary concept and this is something that happened during the dot-com crisis. There is also “circular movement” of money within the “AI industry”. Now they are also getting in to debt financing. That too is scary. At the tail end of the dot-com crash, tech stocks (NASDAQ) doubled within 6 months (October 1999 to March 2000)! If that happens again, I will sell most of my stocks and triple my SPY put options to short sell the market. As it happened 2000 to 2002, we could see a 78% correction. Non-AI stocks are going up too. Pretty soon, JP Morgan will become the first trillion dollar bank! Current market cap- $841B.

All markets are in a bubble and we know how they all end. Gold just went over $4,000 per ounce for the first time. Now some experts advising all investors to have 5% to 25% in gold. Very bad idea! When you take the “inflation adjusted” price, it was only a few days ago that gold surpassed the top it reached in 1980 ($850/ounce) at $3950. In other words, inflation adjusted, $3950 in 2025 is equal to $850 in 1980. Scary! What happened when gold peaked in 1980 at $850/ounce? After that gold fell for 20 years! Gold does not act a hedge against market crashes. After bottoming around 1999, gold rose till 2011. Once again gold kept drifting lower for 5 years. I am very tempted to short sell gold.

In my previous newsletters I talked about the Quantum Computing craze to be the next tech craze after AI. AI is taking so much energy, it will increase the utility/energy costs for all humans. On the other hand, quantum computing will use less energy. As I mentioned previously, many months ago I got in to some of the quantum computing stocks and I saw very good gains and then the CEO of NIVIDA stated that it would take 15 to 30 years to see a benefit in this area, and all those stocks crashed. As stated before, when experts say something will happen in 15 years, it is sure to happen in 5 years and the stocks will see a benefit in one year. Later CEO of NVIDIA reversed himself and invested money in quantum computing. Now the experts are saying that the quantum computing will bear fruit within the next 3 years. Already some are generating positive revenue and net income. Last week was a very good week for these stocks. Over the past few months, my quantum stocks have been up 100% to 800%!. These are the stock symbols of my quantum stocks-  QBTS, QTUM, IONQ and RGTI.

What would create the next 70%+ crash? In my mind, that would happen after China takes ownership of Taiwan.  Computer chips are not all made equal. Even though US companies make the best chips, 99% of the most advanced chips get manufactured in Taiwan through the Taiwan Semiconductor foundries.  China had been bullying and blackmailing the world with their advantage on rare earth for the past 40 years. We have been banning US companies from selling the most advanced chips to China for decades. Don’t you think China will do the same to us when they “own” Taiwan? There could be a time lag between China taking over Taiwan and China using this “chip advantage” to bully the US and the world. Now China has the biggest navy in the world. What will I do with this information? When China invades Taiwan, I will short sell the market in a big way by buying put options on the S&P 500 index. All the advanced chips get manufactured at Taiwan Semiconductor foundries in Taiwan.

Jeffrey Edward Gundlach is the founder and CEO of DoubleLine Capital, an investment firm. He graduated summa cum laude from Dartmouth College with degrees in philosophy and mathematics, and also studied mathematics as a PhD candidate at Yale. In 2011, Barron's named him "The New Bond King" and in 2013, Institutional Investor called him "Money Manager of the Year". On 9/17/25, soon after the 0.25% rate cut by the Federal Reserve, Jeffrey made the following comments:

·      Within the Board, there was no support for 0.50% cut.

·      Fed Reserve is confused about the labor force going down by 1.7 million.

·      They should focus on the unemployment and not on inflation.

·      There is a risk of over easing.

·      0.25% cut was the right amount and not 0.50%.

·      Long Bonds do not like rate cuts as they fear inflation.

·      Huge divergence of views at the Federal Reserve.

·      The future will be more inflationary.

·      Wanting 5 more cuts in 2025 is absurd.

·      Gold and non-US investing is recommended.

·      We could have an interest rate below the inflation rate.

·      Mexican bond market is better than the US market. All foreign stock markets did better than the US- even Canadian and the Mexican markets.

·      Investing in China is not recommended.

·      People should have 25% of their portfolio in gold.

·      He has a anti- US dollar policy. 2024 November the US dollar index was at $110, it recently fell to $96. This kind of drop is very unusual. Worst since 1973.

·      We could get another rate cut in October 2025.

Have a nice month!

Fernando

September 7 Post

Welcome to September!

Historically the worst month for the market. Even prior to 9/1/25, some good stocks have gone down by 20% or more. Have a shopping list ready and if you see good bargains, start “nibbling” (little at a time). We should get some good buying opportunities prior to 1/1/26. All professionals have been taking profits and getting ready for a correction. However, there have been many Septembers where we did not have a meaningful correction. Now most of the stocks are overvalued and concentration is worrisome. The market cap of NVIDIA is 8% of the total S&P 500. There are more ETFs than stocks in the market. If NVIDIA falls sharply, it will take the whole market down with it.

Carley Garner is an American commodity market strategist and futures and options broker and the author of Trading Commodity Options with Creativity, Higher Probability Commodity Trading, and A Trader's First Book on Commodities, published by DT publishing an imprint of Wyatt-MacKenzie.  The Relative Strength Index (RSI) is one of the most widely used momentum indicators in technical analysis. It helps traders identify overbought and oversold conditions and generates potential buy and sell signals. On 9/2/25, Ms. Garner stated per S&P500 RSI. Downsize risk and the correction risk is very high at this time.

On 9/17/25, the Federal Reserve is expected to cut rates. Labor market is weakening and addressing that is more important than fighting inflation. Most expect 3 rate cuts in 2025. My fear is that we could be heading for stagflation-as it happened in the 1970s.  The independence of the Federal Reserve is at risk again. If that is threatened, long term bond yields could rise (and so will mortgage rates-despite what is done by the Federal Reserve) .

Tesla's board has proposed a massive, potentially trillion-dollar compensation package for CEO Elon Musk, which is contingent on the company meeting ambitious market cap and operational goals over the next decade. The package requires shareholder approval and aims to make Musk the world's first trillionaire if Tesla achieves a $8.5 trillion market capitalization, along with targets for robotaxi deployment and robot production. Notably, the plan also requires Musk to participate in a long-term succession plan to unlock the final tranches of the pay. This is excellent for people like us who holds Tesla (TSLA) stock. Current market cap of Tesla is at $1.1 Trillion (as of 9/5/25).  Musk will do all he could to increase the market cap 8 fold to become the first Trillionaire. Unlike, other CEOs, Musk is fully capable of making this happen. I have gone in and out of Tesla many times. My current holding is up 148% in my personal account and it is up 158% on this newsletter portfolio (look at the scorecard).

In previous newsletters I stated that I have Robinhood (HOOD).in my personal accounts. When it was about $20 I thought of buying it but I got in only at $38.  After topping at $113 on 8/11/25, now it is at $101. Ober the past 5 days, it has been rising as it is supposed to be added to the S&P500 on 9/22/25 which will make all ETFs based on the S&P500 to add it to their portfolios. HOOD is going to be the number one brokerage firm in 25 years. There is a generational wealth transfer of $100 Trillion taking place right now and most young people trade through HOOD and they have a different investment or trading philosophy. I believe that within the next 5 years, HOOD could go up by 500%. Over the past 12 months, it went from $20 to $113.

Have a great month!

Fernando

August 17 Post

HI Again,

Look at our scorecard; last 4 month gain = 27%! At this time, most experts are nervous about the market. The market is highly concentrated- Market cap of the top 10 companies account for 75% of the market cap of all US stocks! Historically, September and October are the worst months for the market. Historically (i.e. 1987), the market peaks in August; and we usually gets a market rally around December –“a santa rally”. If there is a correction in the market or in some stocks, watch for good bargains or entry points. Within the past few days I found a few great opportunities. Trade Desk (TTD) dropped 38% on 8/8/25. In after hours trading, it only dropped less than 1%.  That could mean that all the sellers got exhausted and now the buyers could move in. They had a bad earnings report and now the fear is that other companies using AI will take away their market share. Will that destroy TTD? Could happen; anything is possible. Higher the risk, higher the return! I bought a little on 8/8/25 on my private account and when it falls further, I will buy more. I do not expect to see a gain for 2 years. Looking at option tables, I can see a path forward. I looked at call options on TTD that expire on 1/15/2027. Closing price of the TTD stock was $54.05 on 8/8/25. If you buy 100 shares of TTD at $54 at a cost $5400, you can sell one call option contract that will expire on 1/15/2027. Let us assume you sold one call option contract of TTD with an expiry date of 1/15/27 with a strike price of $100. On 1/15/27, if TTD price is above $100, the party that holds the call option you sold (wrote) will assign the option and buy your 100 shares at $100 for $10,000. Whatever happens you also get to keep the initial call option premium you received ($400 or $4 per contract/100 shares) . Your net gain would be $10,400-5400= $5,000. A lot of traders are betting that TTD will be well over $60 in 2 years. These things can change in a hurry but that too might create opportunities. On 8/8/25, TTD had a marketcap of $25 Billion and earnings of $0.83 per share with debt/equity ratio of 12%. For me it was a risk worth taking.

Larry R. Williams is an American Investor, author, and politician from the state of Montana. He has been actively involved in trading the commodities, futures, and stock market for over 53 years and is the only futures trader to trade $1 million of his money at live events worldwide. On 7/7/25, Larry sated that he expects the US to have a powerful bull market for the next 2 years.

Bitcoins and cryptos keep going up. Per CNBC (7/21/25), decades ago, one trader bought Bitcoins for 87 cents per bit coin and recently sold his holdings at $110,000 per bitcoin and he made billions!

Have you heard of Plantir Technology (PLTR)? It is the most expensive(highest PE or Price to Earnings)  in the S&P500.  It has a PE of 623! Nvidia has the biggest market cap but its PE is only 58! On 1/7/25, I bought some PLTR at $70 hoping to buy more when the price declines…well… It never happened. It kept going up and on 8/8/25, PLTR was at $182! There was a rumor that PLTR was dependent on government spending and DOGE was a threat to them. Palantir Technologies Inc. builds and deploys software platforms for the intelligence community to assist in counterterrorism investigations and operations in the United States, the United Kingdom, and internationally. It provides Palantir Gotham, a software platform, which enables users to identify patterns hidden deep within datasets, ranging from signals intelligence sources to reports from confidential informants, as well as facilitates the hand-off between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform. The company also offers Palantir Foundry, a platform that transforms the ways organizations operate by creating a central operating system for their data; and allows individual users to integrate and analyze the data they need in one place. In addition, it provides Palantir Apollo, a software that delivers software and updates across the business, as well as enables customers to deploy their software virtually in any environment; and Palantir Artificial Intelligence Platform that provides unified access to open-source, self-hosted, and commercial large language models (LLMs) that can transform structured and unstructured data into LLM-understandable objects and can turn organizations' actions and processes into tools for humans and LLM-driven agents. Last week PLTR reported that their government revenue is up by 53% and commercial revenue is up by 90%! Their revenue growth is at 48% and their operating margins are at 46%.

Keep an eye on Disney (DIS). It is not good for investment purposes. It is a good trading tool. I have gone in and out of Disney for decades. At most times, Disney fluctuates between $80 and $120. That is a good trading range. Recently it went over $120 but could not stay there for long. On 4/7/25, I bought some Disney at $82 and on 6/9/25, I sold it at $115-40% profit in a few days. As soon as it goes below $90, I will buy it back.

Last week Fed Chair Powell kept interest rates unchanged. Due to the bad labor market reports that came out recently, most expect the Feds to cut short term rates in September. That may not help mortgage rates as those are tied to the 10 year Treasuries. Last year the Feds lowered rates and the bond market raised rates as they are concerned about growing budget deficits.

Jeffrey Edward Gundlach is the CEO and founder of DoubleLine Capital, a fixed income investment firm managing over $120 billion in assets. He's known as the "King of Bonds". After the Fed decision to keep rates unchanged, Jeffrey made the following comments on 8/4/25:

·      Maybe the Feds made a mistake of not bringing down rates in August.

·      The job report on Friday was wild.

·      Powell talked about the possibility of raising rates if tariffs trigger inflation.

·      Data we have been receiving is faulty as only 50% respond to surveys.

·      Inflation data is also suspect.

·      Market is expecting 3 rate cuts in 2025.

·      US Dollar declining shows that inflation is under control.

·      Inflation figures are not concerning.

·      After the last labor report, Feds might choose to lower rates and fight unemployment rather than fight inflation.

·      Bowman or Waller might replace Powell in 2026.

·      Our deficit is 7% of our budget.

·      Avoid buying long end bonds.

·      In the past, when the market fell, the US dollar rose but in 2025, the opposite happened.

·      In the bond market, you make money slowly and you lose money fast.

Have a great month!

Fernando

July 7 Post

Hi Again

Look at our score card (again); we had a gain of 23.88% over the past 3 months! If you had investments overseas, you would have done much better for 2 reasons. Most overseas markets did better than the US market. Secondly, the US dollar has been declining very sharply. In fact, we had the worst first half (ending 6/30/25) since 1973! Just before the November election, the dollar index was at $110 and on 6/30/25, it was down to $97. This is good for most big US companies that get 50%+ of their revenue from overseas.

Now the market is going through the “AI” craze- it is very much like the “dot com” craze of 1999+. What will be the next “market craze”? Just imagine if we got in to NVIDIA years ago before AI was well known. In 2000, if you bought 100 shares of NVIDIA for $10, today it would be worth $15,900! In my opinion, the next “craze” would be on Quantum computing. A few months ago I bought some quantum computing stocks and those tripled over a short period of time. When I put money in to a “moon shot”, I only put in a small amount of money. Then NVIDIA CEO stated that quantum computing is 30 years away and all those went in to a free fall. In my opinion, if experts state that it would take 30 years, it could happen in 10 years and if that is the case, these stocks will skyrocket in 2 to 5 years. Risk/Reward trade off. I bought my quantum computing stocks in January 2025, within 7 months, these are my gains: (1) D Wave Quantum (QBTS)- 339% (2) IONQ Inc (IONQ)- 81.62% (3) Rigetti Computing (RGTI)- 54.77% (4) Defiance Quantum ETF (QTUM)- 16.58%. One of these days, I might add some of them to our newsletter portfolio.

I have been watching the performance of the brokerage house, Robinhood (HOOD). Robinhood may have taken the industry by storm when it launched in 2013, pioneering the no-fee trading model, but its first-mover advantage is long gone. In 2025, nearly all brokers offer commission-free trading, companies have to find innovative ways to stay competitive, and Robinhood has done a commendable job. Maintaining its no-fee, easy-to-use vibe, the company now offers much-improved trading platforms, an expanded number of available assets, including crypto and futures, more account types, solid banking features, and even a robo-advisor. Robinhood Legend, the company’s brand new web platform, is built from the ground up. Its sleek and beautiful interface brings active traders some of the more advanced research capabilities they've been seeking. The company also launched index options, as well as futures trading, adding to its existing lineup of stock, ETF, option, and cryptocurrency trading. While there has been a clear focus on improving access to a growing library of educational content, offering more retirement account benefits, and enhancing active trading capabilities. However, more advanced traders and investors who need the most sophisticated financial, research, and trading tools will find that they are not Robinhood's target audience. Robinhood was founded in 2013 by two former Stanford roommates, Vlad Tenev and Baiju Bhatt.1 Launched with a desire to expand access to the market by reducing barriers to entry, the platform quickly found a home with young, tech-friendly traders thanks to a simple design and intuitive trading experience. As of June 11, 2025, the brokerage boasts 25.9 million funded customers and $255 billion in assets under custody. No-commission and no-account minimum trading makes it easy for beginners to get started, and the ability to trade fractional shares gives users access to a greater range of assets than they might otherwise be able to afford. Robinhood provides access to trading in stocks, options, ETFs, and direct cryptocurrencies, and also launched futures in early 2025, making its asset selection even more competitive. Robinhood is among a handful of brokers that offer a 24-hour market, allowing customers to trade select stocks and ETFs 24 hours a day, 5 days a week.5 The broker also continues to expand its Learn section with more material and has enhanced the onboarding questionnaire to help users understand investing basics while setting risk parameters that match their tolerance. Robinhood’s platform has improved in other areas, as well. Cash management enhancements, such as providing a higher interest rate on uninvested cash for its premium Gold members, as well as a cash card product, have helped to round out the platform and draw in more clients. As recently as Oct. 16, 2024, Robinhood took a major step in enhancing its active trader capabilities with the launch of its new web-based platform, Robinhood Legend.7 It also now gives clients the ability to choose tax lots when selling their positions, opening the door for potential tax savings (Investopedia)

Now for their stock, HOOD; I was waiting for the stock to go down to use it as an entry point but HOOD kept going up! I was tempted to buy it wen it was $25 but I finally got in at $40 around 11/25/24. On 1/10/24. HOOD was at $11 and on 7/3/25, it was at $94-almost a 9 fold increase! At this time the CEO of HOOD is in Europe. HOOD is a real “disruptor”.  Within the next 2 years, I expect HOOD to go up to $200 to $300 per share. Per CNBC, $100 Trillion is getting transferred from the older generation to the next generation at this time and these young investors are investing and trading in a different manner. Most young people go through HOOD. When the S&P 500 index add HOOD in to their index, it will go up even higher. Instead of going up, I hope HOOD will have a major correction and I will consider it as a buying opportunity.

On 6/18/25, the Federal Reserve decided to keep the interest rate unchanged. Fed Chair Powell stated that he expects unemployment and inflation to go up in 2025. He also expects a slower growth rate for the US economy. Per the Federal Reserve, unemployment rate could rise to 4.5% in 2025.

Jeffrey Edward Gundlach is the CEO and founder of DoubleLine Capital, a fixed income investment firm managing over $120 billion in assets. He's known as the "King of Bonds". After the fed decision, Mr. Gundlach made the following comments:

·        There is upside risks to inflation and unemployment.

·        Each $10 increase on oil (WTI) will add 0.3% to the rate of inflation.

·        Feds will fight unemployment over inflation. If unemployment rises, even at the risk of having a higher rate of inflation (i.e. 3.5%), the Feds will lower rates.

·        The Bond market yield curve is steepening.

·        A recession is possible. Unemployment claims keep rising.

·        It is surprising that no one is talking about a possible rate hike.

·        Triple C bank loan defaults are rising.

·        The US dollar will keep declining.

·        Avoid long term bonds.

Have a great month!

June 10 Post

Hi All

Look at our score card. Our Newsletter portfolio went up by 16.9% in May 2025. A few weeks ago when the tariff issue became known, the market took a great hit. As I said then that was an amazing opportunity for traders and investors. Most people got scared and sold their “good” stocks. All the stocks I bought a few weeks ago are up 50% to 80%. This kind of volatility is “heaven sent” for traders. Hopefully this trend will continue till Trump leaves the WH.  On 5/30/25, Jamie Dimon, the most respected CEO (JP Morgan) stated that “he expects trouble or a major crack in the bond market. You will see people panic and sell. We will make money”. Even Trump said that he takes Jamie Dimon seriously. I agree with Jamie Dimon 100%. Imagine what might happen; bond yields going up to 10% to 15% and most people selling stocks to buy bonds which could lead to a 66%(per Elliot Wave)  to a 90% correction in the stock market. Thinking about that opportunity makes my mouth water! I have 50% in cash and I bought some put options on the S&P500 that expire June 2026 (in 12 months)- to short sell the market. When the bond market falls sharply, as I have done in the past, I will use options to make money in the bond market. Jamie Dimon is correct on another point-when most people act foolishly, we could make money. The Pentagon warned that China is close to invading Taiwan. The market is not taking that seriously as in the story “boy who cried wolf”. China has a monopoly on rare earth minerals and due to their embargo, US auto manufacturers have started closing down already. Trump banned Nvidia from exporting the most powerful chips to China. All those chips get manufactured in Taiwan. When China invades Taiwan, all those chips will belong to China and they will ban sales to the US. It could happen. When Herbert W Bush was President, China banned all rare earth exports to Japan and it was panic time for the west. We decided to get self-sufficient in rare earth minerals; but nothing was done about it. How about the crack in the bond market predicted by Jamie Dimon? China can unload all their US Treasuries and the bond yields will rise to 10% to 15%. When our banking crisis happened around 2008, Russia urged China to do this at that time. We have to stay calm and act prudently. I am talking about “emotional intelligence”. Since Trump took over the WH, the US dollar has gone down in a significant manner – it went down from Biden’s $110 to the current $99. Foreign investors and US investors are selling US assets and buying foreign assets. I think that they are being foolish. When US markets crash, they will come back. I have seen this movie in the past. Bond yields in Japan, USA, UK have been rising lately-especially in Japan. This is very bad for the global economy.

Carley Garner is an American commodity market strategist and futures and options broker and the author of Trading Commodity Options with Creativity, Higher Probability Commodity Trading, and A Trader's First Book on Commodities, published by DT publishing an imprint of Wyatt-MacKenzie. On 6/3/25, Carly predicted that oil will keep going down but the US dollar will change its direction and have a “rip off’ rally.

On 5/7/25, the Federal Reserve kept interest rates unchanged as they feared inflation with Trump’s tariffs and the possibility of having “stagflation” (inflation + recession) in the future. Remember the 1970s?

Jeffrey Edward Gundlach is the founder, CEO, and CIO of DoubleLine Capital, a fixed-income investment firm. He's known as the "King of Bonds" and a leading bond market expert. With respect to the Fed decision, Gundlach stated the following on 5/7/25:

·       The yield curve is reinverting.

·       Unemployment is rising.

·       US Govt. interest charges $4 Billion per day.

·       Junk bond rates going up- scary!

·       No volatility in the gold market. Now it is an asset class due to global conditions. Expect the price of gold to rise to $4,000.

·       Harvard selling their bonds for their ash flow needs-more than $1Billion.

·       By the end of 2025, expect inflation to be above 4%. (When Biden left, it was 2.5%)

·       US Treasury and the Federal Reserve might do “yield curve control”.

·       Stay away from C Grade or lower bonds.

·       By December 2025, the Feds might cut rates due to liquidity issues.

·       Money will come out of the US and go in to Europe and overseas markets.

·       During 2025, Europe has outperformed the US market.

·       The US dollar will keep going down.

·       Long term rates are going up.

·       Treasury Sec talked about extending the duration of the bonds owned by foreigners and decrease the rates paid on them-if this happens, the bond market will crash.

Have a great month!

Fernando

May 6 Post

Hi Again,

Is the correction over? Either way we are okay. What we recently had was nothing more than a bear market rally. Why did we have a big rally on 4/9/25? After a correction, the first rally is the biggest as this is due to “short covering”- bears running for the hills! Same thing happened in 1931, 1933 and 1938. I am selling some of my holdings, raising cash to take advantage of future corrections and buying hedges on the S&P500. Since I kept buying as “good stocks” as they went down, I have a paper gain of 10% to 25% on those purchases over the past few weeks. This was just a buying opportunity. How does Trump 2.0 first 100 days compare to the first 100 days of other Presidents? Per CNBC, 4/30/25, The worst was President Ford. Second worst was President Nixon. Third worst was Trump 2.0. Trump warned us that this would happen; and Wall Street did not take it seriously. Markets fluctuate and that is good.

Larry Williams is an author, and trader. His career began in 1962 and has written several best-selling market books. Larry won the 1987 World Cup Championship of Futures Trading taking $10,000 to over $1,100,000 (11,300%) in a 12-month competition with real money. On 4/30/25, Larry predicted that the dollar will change direction and will rally now. Commercial hedges on commodity markets go up as the dollar skyrockets.  November 2024 to April 2025, the US Dollar index has fallen from $102 to $98. This will help our biggest companies as they get 70% of revenue from international sales.

Carter Braxton Worth is an American financial analyst and stock market strategist. Each year since 2008, he has appeared on institutional investor's All America Research Team, ranked as one of the Top 3 technical analysts on Wall Street. On 4/29/25, Carter stated that studying the charts of the “Magnificent 7” (top 7), it is seen as a “pair of two”; using a card analogy, Carter stated that all these 7 stocks are in a dangerous place and buying them is risky. However I feel that if they fall sharply, it would be a good idea to buy(“nibble” a little at a time) and hold for a couple of years. They have the strongest balance sheets to withstand a recession.

On 4/30/25, CEO of XPO (one of the biggest freight companies) stated that he can already see electrical manufacturing moving from Mexico to Texas. Even though Wall Street expects the transition of manufacturing to take many years, I feel that it might surprise all of us and happen sooner than later. This is good for the US. Howard William Lutnick is an American businessman and philanthropist who has served as the 41st United States secretary of commerce since February 21, 2025. He is the former chairman and CEO of Cantor Fitzgerald. Per Mr. Lutnick, Junior colleges, community colleges etc are training new high school graduates to work in new complex manufacturing industries that will come to the US in the near future.

Per r Warren Buffet, “When everyone is fearful, get greedy; and when everyone is greedy, get fearful”. A few weeks ago, everyone on the planet was bullish on gold. No one was skeptical or bearish. In 2023 Gold was at $1648 and it rose to $3328 on 4/17/25. A few weeks ago, expecting Gold to go down within the next 2 years, I bought some put options on Gold (GLD) that expire in 2 years. Then on 4/9/25, well known technical analyst Carly Garner stated that Gold is overvalued; and she expect the price of Gold to go down to $1650. She also expect the S&P500 to go down to 4600 !! The S&P500 closed on 5/2/25 at 5686. If it goes down to 4600, that is a 19% fall!

On 4/16/25, Fed Chair Jerome Powell stated the following:

·       Immigration will not affect inflation.

·       DOGE cuts on university research will have a negative effect on future growth.

·       We are currently at “economic full employment”.

·       Trump’s tariffs are higher than Smith Harley tariffs of the 1930s that created the Great Depression.

·       Do not know what kind of impact AI will have on the economy at this time.

Jeffrey Edward Gundlach is the founder, CEO, and CIO of DoubleLine Capital, a fixed-income investment firm. He's known as the "King of Bonds" and a leading bond market expert.  On 4/7/25, Jeffrey stated:

·       Prior to 2025, “foreigners’ increased their US assets from $3 Trillion to 24 Trillion. Now due to Trump, they are moving their funds out of the US.

·       We have a massive budget deficit problem.

·       We are currently issuing the same amount of bonds as we did in response to covid.

·       Our deficit can go up to $3 Trillion.

·       This is not the end of volatility in financial markets.

·       For a short term bottom, look for 4500 on the S&P 500.

Have a great month!

Fernando

April 10 Post

Hi Again,

Did you go bargain hunting in the market last week? I did. Hopefully this correction will go much deeper. All Wall Street experts and the media acted like we were facing the end of the world. Not true. From the previous high of 611 on the S&P 500 on 2/20/25, it fell to 505 on 4/4/25 close – 17.35% drop. I was expecting (and still would like to see a 30% to 90% drop). At any time, Trump can send the market upwards. It is rare to get such buying opportunities. Do not “buy”, just “nibble”- in other words buy a little at a time or you will get caught to a “falling knife”. This is why I always said to have 50% in cash and also have a strategy to deal with corrections. Anyway, before you buy a stock (or the market), know why you are making the purchase, know when you might buy more and know when you might sell it. The stocks market is not a casino. The market close on 4/3/25 and 4/4/25 were the worst 2 days since March 2020. Remember March 2020 during Trump 1.0 (covid crisis)? I remember one of the best Wall Street billionaires Bill Ackman actually cried on CNBC asking Trump to shut down the economy. I intuitively felt that covid would get here so I was shorting the market and I turned $3,000 in to $40,000 in 3 months. Per market analyst and astrologer, Merriman, we are bound to have a very rocky market all through 2025. All commodity futures are lower so that is good for inflation expectations. On 4/3/25, when the Dow (DJIA) was down 1500+, all professionals were selling but retail (individual) investors were buying in a big way. On 4/4/25, when the market went for another big correction, even the “retail” investors were selling- except for me. As I took profits on some “shorts’ I had as puts or insurance, I bought more- “rolling it over”. Last week, what did I “buy” (nibble)? Super Micro, Vertiv, Broadcom, Dell, Nvidia, Reddit and the ETF “MAGS” which covers all the best 7 stocks known as the “Magnificent 7”. I am keeping my eye on 48 other stocks.  That is my strategy. 

VIX is the ticker symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility Index, a popular measure of the stock market's expectation of volatility based on S&P 500 index options. Here is one of the strategies I employ. When volatility is low, this index goes below 20. Then it is cheaper to buy call options on VIX. Around 1/20/25, when VIX was below 20, I bought some call options with a strike price of 25 and sold them on 3/10/25, when VIX rose to 28. I bought more (that expire in 9 months) with a strike price of 50 , expecting the VIX to go over 50. On 4/4/25, the VIX went to 45 but I did not sell my calls as I know that VIX is sure to go to 60 within 2025.

I also had some money in Treasury bond ETF known as TLT. iShares 20+ Year Treasury Bond ETF. As interest rates go down the value of this TLT will go higher. This is a nice place to keep your money. Unemployment rate is expected to move higher so if inflation is stable, Federal Reserve will lower rates. This tariff hoopla will blow over soon. I agree with Trump that we have to reverse the trend started by Reagan in outsourcing all our manufacturing and having the lowest tariff rates in the world. We get $4Trillion in imports each year. Even if we have a 10% tariff rate, that $400 billion per year-it does not matter if it gets paid by the US importers or the US consumers. US consumers are smart, they will shift to cheaper sources. Have you heard of Walmart?

Jeffrey Gundlach was formerly the head of the $9.3 billion TCW Total Return Bond Fund, where he finished in the top 2% of all funds invested in intermediate-term bonds for the 10 years that ended prior to his departure. He was fired by TCW in 2009. In the aftermath, Gundlach and TCW sued each other and went to jury trial in California; TCW alleged that Gundlach stole trade secrets (TCW prevailed, but was awarded $0 for the claim), Gundlach sued over compensation claims (Gundlach prevailed, and was awarded $66.7 Million). Soon after the Fed decision on interest rates on 3/20/25, this is what Gundlach had to say:

• Word of the day- uncertainty. 

• Inflation was upgraded.

• Expect 2 rate cuts in 2025.

• Expect a lower growth rate in 2025.

• Powell’s favorite word this time “inertia’.

• Bond yields are going up.

• Government interest expense is around $3 billion per day.

• Feds are doing less quantitative tightening to reduce rates even now.

• Inflation in 2025 expected at 2.75%.

• Powell was downplaying the risks.

• Powell may go in to quantitative easing.

• Europe (and most others) have been outperforming the US market in 2025.

• Powell said that tariffs are transitory. ( I agree)

• Leverage is at its lowest level.

• Utilities outperformed so treasuries will outperform high yields.

• He prefer short term treasuries.

• Balancing the US budget will lead to lower growth in the US.

• 50% chance of a recession in 2025.

• Rate of inflation will go down but price level (what concerns people) will remain high- it is like speed remaining high but acceleration going down.

• “Buy on rumor. Sell on the news”.

• Keep a lot of “dry powder” (cash) for buying opportunities (my old advice for 10+ years).

Have a great month!

Fernando

March 10 Post

Hi There Again,

Last month I warned that we will have many 10%+ corrections this year. Did you enjoy the mini correction we had last week? I did; I had a great time. Waking up each morning was a treat. Prior to all this, as I always do, I had some ‘hedges” as put options so when the market goes down, I can make money. At the same time, as good stocks go down in value, I “nibble’ (buy a little at a time). Or else, you can get caught to a “falling knife”. In order to reap what you sow, you have to get good opportunities to “sow” on fertile ground. I always keep 25% to 50% in cash. If my “invested” 50% go up by 50%, I make 25% on the total portfolio. Whatever happens, I can always rise up again.

First a few things about some of my hedges. I am not mentioning my S&P 500 “hedges” (puts) as those are for market crashes (20%+). Last December all the Wall Street experts were saying that the future for the retail industry was great. Not a single expert had doubts. It did not make sense to me. Trump was promising tariffs on everything and that was not good for the consumers. So I decided to take a “bet” against the retailers and buy puts on the ETF known as XRT (SPDR S&P Retail ETF ). On 1/15/25, I bought put options on XRT when it was at $78. I bought XRT puts with an expiry date 1/15/2027, with a strike price $55, expecting XRT to go down to $55 prior to 2027. On 3/7/25, my put options had a paper gain of 80% in 51 days!

What is the VIX aka “Fear Index”? CBOE Volatility Index. You cannot buy and sell the VIX. You are only allowed to buy/sell call and put options. When the VIX goes below 20 (lower the better), it is a time to buy Call options to hedge against a future correction. In the same way, when the VIX is 45+ , it is a good time to buy puts on the VIX and an excellent time to buy stocks. When the VIX is over 30, it is a danger sign. On 1/23/25 I bought a Call (expecting future volatility) on VIX expiring 9/17/25 with a strike price of $35-in 39 days, it was up 17%!

When the greatest stock on Wall Street, NVIDIA was around $150 on 11/21/24, expecting it to drop 2/3 by 2027. As a hedge against my big holdings of NVIDIA, I bought put options with a strike price of $50 with an expiry date of 1/15/2027. In 3 months it was up by 30%! I am still bullish on Nvidia and I keep buying (nibbling) the stock as it moves lower.

I have some BITCOINS through the ETF known as “IBIT”. As a hedge against my holdings, on 1/22/25, I bought some puts that expire on 1/16/2026 with a strike price of $35. In just 40 days, on 3/3/25, my puts were up by 20%.

We are heading towards a recession. Probably stagflation (high unemployment + high inflation) as we had in the 1970s. Consumer spending is 70% the US GDP (Gross Domestic Product or total economic activity). On 2/28/25, Yahoo Finance stated that consumer spending dropped to its lowest level in 4 years. Ron Insana, economist sated that bond market activity shows that we are heading towards a recession. On 2/25/25, US Consumer confidence level dropped by 7%. Univ of Michigan is good at economic stats, and on 2/27/25, they predicted the rate of inflation to go up to 4.2% in 2025. When we had the November election, it was 2.5%-close to the Fed Reserve target of 2%. On 2/27/25, pessimism among retail investors was up to 60%- this happened only 6 times in history. For me this is a bullish sign. To paraphrase the great, Warren Buffet, “When others get afraid, get greedy; and when others get greedy, get afraid”. This is a time to buy slowly (nibble) and not a time to sell. If you are in good stocks, be patient and you will see gains in the future. A few months ago, and up to a certain extent, even now, euphoria is very high. On 3/7/25, CNBC reported that short interest is at an all time high. Hedging too is at an all time high. Private Capital too is going down. Per a trader on the Chicago Mercantile Exchange, big hedge funds are unloading a lot of US and Global equities. The market may not go down in a straight line but expect a lot of volatility in 2025. I love it! Buying opportunities!

What opportunities did I find last week? What did I  buy (nibble on) ? 1- NVIDIA, 2- Reddit, 3- Super Micro Comp or SMCI. 4- Taiwan Semi or TSM, 5- Tesla or TSLA, Trade Desk or TTD.

Take Tesla (TSLA); by 3/7/25, it has lost $550 billion of market cap; and NVIDIA has lost 1 trillion of market cap! On 11/4/24, Tesla was at $244. On 12/18/24, it peaked at $488. On 3/7/24 it has come down to $262. There is a saying that “when the market (or a stock) bottoms, a bell does not go off”. Those who wait for such a signal, will end up missing an opportunity. Also now everyone is pessimistic on Tesla. I am NOT. Those who think of Tesla as a car company do not get it. It is a technology company-future in robots, robo taxis etc. A couple of years ago when Metta went down to $85, all experts were saying that Zuckerberg is lost in his Metaverse etc. I bought it at $85 and sold it at $650. How do you nibble? Buy 1 share of Tesla at $262 now. When Tesla goes down to $225, buy 10 shares, when it goes down to $200, buy 1,000 shares and when it goes down to $150, buy 10,000 shares. Get the picture?

I always loved studying stock option tables. For each good stock, there are about 1,000 related options (calls to be long and puts to sell short). When covid hit China, Trump was saying that covid will never get to the US. I did not believe it. At that time, Disney had a market price of about $150. When I checked option tables I saw that put options with a strike price of $50 was going for $0.90, that expire in 12 months. In layman terms, this option expired in 12 months, 1 option contract controls 100 shares so one contract was a mere $90 so if Disney fell from $150 to $50 in 12 months, my $90 option contract could go up to $10,000!! Like a lottery! I did not expect to make money but $90 is no big deal. In one week my options doubled in price and 3 months later, what I bought for $90 per contract, I sold for $850 per contract! As of 3/7/25, I was looking at Tesla option tables. Tesla call options expiring in 2027, with a strike price $800 were at $2900 per contract (that controls 100 shares). In other words, people are paying $2900 per contract assuming that Tesla stock will be over $800 in 2 years! If not, they lose everything. Here is how you can make money- instead of being the “gambler”, be the “casino”. Buy 100 shares of Tesla now for $26,000. Sell 1 “covered call option contract” on your 100shares of Tesla with a strike price of $800 and an expiry date of 6/17/2027. You will get $2900 now but you cannot sell your 100 shares till that option is open (maybe till 6/17/27). Let us assume that on 6/17/27, Tesla is above $800; the person who bought your options will assign your option and buy your Tesla 100 shares at $800. You bought for $260 and then you sell at $800. You also get to keep the $2900 premiums you collected. Now assume on 6/17/27, Tesla is below $800, then you get to keep your 100 shares of Tesla you bought on 3/7/25 and you also get to keep the $2900 in premiums you collected on 3/7/25. Not a bad deal! I am confident that Tesla will exceed the $480 (top it reached in December 2024) in the future. Food for thought!

Gene Munster is Managing Partner & Co-Founder of  Loup Ventures, a research-driven venture capital firm based in Minneapolis and New York investing in frontier tech companies. Prior to Loup Ventures, Gene was a managing director and senior research analyst at Piper Jaffray where he covered technology companies including Apple, Amazon, Google and Facebook. During his 21-year tenure, Gene received acknowledgements including: Best on the Street from The Wall Street Journal, Top Stock Picker from Forbes, and was widely recognized for his work on Apple. Gene Munster is the ultimate expert on tech stocks. On 3/7/25, Gene stated that AI company fundamentals look very strong (despite China’s DeepSeek scare) and these stock will rally for the next 2 years and then this “bubble’ will burst. Nvidia revenue growth is expected to accelerate in 2026. As for Tesla, he said to expect lower prices in the short term but best positioned to benefit from AI.

I am keeping my eyes on the “brokerage” house of the very young called Robinhood (symbol: HOOD). If this goes down, I will buy more. Future prospects are very good. Now most firms do not charge commission on trades due to the innovative measures taken by HOOD. On 2/25/25, the CEO of HOOD stated the following:

·       They have over 25 million funded customers.

·       $204 Billion assets under management.

·       They operate in the US, UK and Europe and has plans to expand in to Asia.

·       One can trade any financial instrument with HOOD.

·       It is a platform for active traders.

·       They have instruments to predict the future of markets.

·       HOOD stock up by 217% in one year.

Have a great month! Enjoy the correction (s)!

Fernando

February 10 Post

Hi Again,

2025 is going to be exciting! Chaos create opportunities!

Most Wall Street experts have been comparing the past few years to the “roaring 20s”- too much euphoria. Smoot-Hawley Tariff Act of 1930 sparked trade wars in the 1930s. The act was a protectionist trade policy that increased tariffs on imports to the United States. In response, other countries raised their tariffs on U.S. exports, which made it harder for the U.S. to recover from the Great Depression. Will history repeat itself? We are sure to have chaos and that is not a bad thing. Chaos create opportunities. On 1/8/25, the CEO of Global Capital stated that he expects the rate of inflation to rise up to 3.5% in 2025 (from 2.5% in 2024). On 1/10/25, the Chief Economist of Appollo Global stated that the Federal Reserve might raise rates in 2025

Mohamed Abdullah El-Erian is an Egyptian-American economist and businessman. He is President of Queens' College, Cambridge, and chief economic adviser at Allianz, the corporate parent of PIMCO where he was CEO and co-chief investment officer. Per Mr. El Erian, the US Dollar keeps rising as the US economy is doing better than all other countries. Growth is higher than expected and inflation is stickier than expected. Oil (Brent) is over $80 due to Russian sanctions. 

Over the past few years, NVIDIA was the best performing stock and all market experts believed that it would go up endlessly. A few weeks ago I did some profit taking and as a hedge bought some put options on NVIDIA. On the hedge, I did not expect to see a ‘paper gain” till the end of 2026. My hedge- NVIDIA, expiry date : 1/15/2027. Strike price : $50. At that time NVIDIA was trading at $149 so I expected it drop by about 2/3 by January 2027. Amazingly, on 2/3/25, after a mere 74 days, I have a “paper gain” of 47%. I am not selling my hedge but I am buying more stocks. As Warren Buffet states, “ When others are fearful, get greedy: and when others are greedy, get fearful”. Warren Buffet has been selling stocks for the past few months. 

Jessica Inskip, Director of Investor Research at StockBrokers.com, has been immersed in the world of finance since July 2009, accumulating 15 years of expertise in the field. Formerly the director of education and product at OptionsPlay, Jessica's insights have made her a sought-after guest and commentator at financial outlets such as CNBC, Fox Business, and Yahoo Finance. On 1/10/25, Jessica stated:

• Technology stocks (ticker: XLK) made bearish crossover sell signal on 1/10/25.

• SPX (S&P 500) turned negative as of 1/10/25.

• “Magnificent 7” will be resistant to higher bond yields and they will do better than the other 493 stocks.

Prior to 1/1/25, especially prior to 12/1/24, all market experts were extremely bullish on retail stocks (SPDR S&P Retail ETF). To me that was confusing. Trump has been warning that tariffs are coming so I bought some put options on XRT to short-sell XRT. My options expire in January 2026 and I bought them on 11/27/24, and on 1/14/25 (in 48 days), I sold those puts (strike price $65) with a gain of 41.57%. 

Keep an eye on Bitcoins and Cryptos. Bitcoin prices fluctuate wildly. This is a very good “play ground” for disciplined traders. As Warren Buffet states, “ When others are fearful, get greedy: and when others are greedy, get fearful”. Five years ago Bitcoins were at $6,000 and now it is hovering over $100,000. Since the election, all have been too euphoric about Bitcoins so I am ready to see at least a mini crash in the future. That would be a buying opportunity. Interactive Brokers is one of the best brokerage firms in the US. On 1/21/25, the CEO of Interactive Brokers stated that he is extremely concerned about the “crypto bubble” and margin buying is at a dangerous level. The Federal Reserve look at the commodity market to figure out what to expect from inflation. Carley Garner is an American commodity market strategist and futures and options broker and the author of Trading Commodity Options with Creativity, Higher Probability Commodity Trading, and A Trader's First Book on Commodities, published by DT publishing an imprint of Wyatt-MacKenzie. On 1/27/25, Carly Garner stated that corn, cattle are red hot. Expect high inflation and higher rates. 

Plantir Tech! Plantir! Over the past few months all experts were saying that Plantir has a great future but it is extremely overvalued. On 1/7/25, I bought a few shares and my strategy was to buy more as it went down in the future. As it has happened to me many times, Plantir kept moving up. On 2/4/25, what I bought on 1/7/25 was up by 50% (in just 28 days)! This is a win-win strategy- if it goes down , I buy more and if it keeps shooting up, I enjoy the ride. This depends on the stock/company.  With companies like Intel and Boeing, it will not work. Also it is important to have 50% in cash at all times. Those who are 100% invested will suffer when we have a big crash. 

On 1/29/25, Fed Chair Powell made the decision to keep interest rates unchanged. It was very much expected. Powell stated:

• Our economy is strong. The labor market has cooled. Inflation close to their target of 2%. Labor market solid. Unemployment rate has stabilized at 4.1%.

• The Labor market is not inflationary.

• He had no contact with Trump. 

• Short end bond market shows inflationary pressures.

• Will watch fiscal policy changes and react accordingly.

• Will wrap of “monetary policy review” by the end of summer 2025.

• Still believes diversity in the work place translates to the success of US companies.

• Looking at 12 month inflation to avoid seasonality.

• Rental/housing inflation is coming down.

• Job hiring rate has come down but if you have a job, you are doing okay.

• Flow of labor has come down significantly.

• No comment to the comment made by some that the Federal Reserve is overstaffed.

• Will not comment on tariffs. Has a wait and see attitude.

Jeffrey Gundlach was formerly the head of the $9.3 billion TCW Total Return Bond Fund, where he finished in the top 2% of all funds invested in intermediate-term bonds for the 10 years that ended prior to his departure. As he always do on “Fed Day”. On 1/29/25, Jeffrey made the following observations about the Federal Reserve:

• Rate of inflation is going up.

• The Feds on hold (when it comes to rate changes) till rate of inflation goes down.

• Do not expect rate cuts. 

• Very concerned about the re-evaluation of bond risks by rating agencies. This is what led to the financial crisis of 2007/2008.

• Probably one rate cut in 2025-maximum 2.

• Except of California, housing inflation will go down.

• “Meaningfully, above the neutral rate”.

• Rates have not peaked.

• Mortgage rates (tied to the 10 year bond) have been around 7% for the past 18 months.

• Inflation will not go down to 2%.

• Feds use the commodity market prices to figure out future inflation trends and it looks bad right now.

• Avoid long end bonds.

• During “Trump 1.0” tariffs did not lead to inflation but we had a very different economy at that time. Covid and supply side limitations caused inflation for the first time since the 1980s.

• Budget deficits will not go down with tax cuts.

• Jeffrey likes cash- can get 6% easy.

• Stocks are overvalued.

• Gold is close to peak. 

Per market analyst/astrologer, Merriman, 2/9/25:

• The market volatility, along with geopolitical uncertainty and disruptions may not let us next week. We are still under the astrological “retrograde chaos”.

• Financial markets may be caught by surprise, leading to sudden and sharp price fluctuations both ways. This is not a favorable market for those who are not nimble.

• The change most people want is for a stable system they can rely on for the purpose of personal planning for years, not months. Just as Democrats misread this over the past four years, Republicans may be doing the same now that they are in power. Change that does not provide stability is not the ticket for support.

• Right now, the “sweet spot’ seems far away as the pendulum swings back and forth at the extremes in 2025-2026. In turn, equity markets are apt to fluctuate wildly, with mora than one 10% or greater selloff- which has not happened since 2022.

Have a great month!

Fernando

January 8 Post

Hi! Happy New Year!

On our portfolio (given in our scorecard), we had a 52% net gain for 2024! The S&P index

went up only by 24% in 2024 and the S&P for 2023 and 2024 went up by 49%.

 Over the last 15 years: 88% of active large-cap funds failed to beat the S&P 500. 

 Over the first half of 2024: 18.2% of actively managed funds that benchmarked to the

S&P 500 beat the index. 

Patting myself on the back!

Since September 2024, the Federal Reserve has been reducing the interest rate (by 75 bps) but

the bond market has increased the rate by 1% so mortgage rates have been climbing. Only once

in history; did this happen-in 1981 when Volker tried to lower rates. The bond market is

worried about inflation and deficits. If bond yields keep rising, investors will sell their stocks to

buy bonds and the stock market would crash as it happened in 1987. However, there is another

school of thought- people are selling bonds now to buy stocks so bond yields are going up. 2025

will be very exciting!

On 12/18/24, the news media was complaining that the market (Dow Jone-DJIA) had its longest

losing streak since 1974 (when Ford occupied the white house) which ended with a 1,000 +

point drop on 12/18/24 after the Federal Reserve decision. I just could not understand the hype.

The DJIA fell from about 43,000 to 42,000 (or so). This is nothing. We did not have a single

10% correction in 2024. That is unhealthy. I always have some put options on the S&P 500

(SPY) as a hedge against a big correction (or crash). On 11/13/24, I bought some puts on the

SPY (expiring June 2025, strike price $400). This was a hedge against a 20% drop in the market

but when the ‘market’ dropped 1,000+ points on 12/18/24, I was able to sell my put options

with a 55.3% gain! Traders are investors are getting unreasonable and expecting the market to

drop soon. Nvidia is the star of the market. A few weeks ago I started to trim my Nvidia

holdings and I put in a little bit of money in to Nvidia put options as a hedge. The puts I bought

expire on 1/15/2027, with a strike price of $50- in other words, Nvidia has to fall by 70% for

me to make a profit. I did not expect to make money on this hedge till the end of 2026. By then

Broadcom and others might take some market share from Nvidia. To my amazement, on

12/20/24, my Nvidia puts had a paper gain of 9.26%!

On 12/18/24, The US Federal Reserve decided to cut the interest rate by another 25 bases

points. Soon after the announcement, this what Fed Chair Powell had to say:

 Inflation is going down to 2% but the rate has slowed.

 Housing inflation is going down but slower than expected.

 Expect a slower rate of interest rate cuts in 2025.

 The Feds are closer to a “neutral” rate.

 The US economy is “very, very” good. It is better than all other countries.

 They are in a “new phase”- “meaningful but restrictive”.

2

 By law, the Fed Reserve cannot own Bitcoins-unless congress changes the law.

 It is clear that we avoided a recession.

 People are feeling “higher prices” and not “higher inflation”.

 They are going to be cautious about more rate cuts.

 US economy has not felt the effects of geopolitics.

 Long term inflation expectations are well anchored.

Jeffrey Gundlach was formerly the head of the $9.3 billion Total Return Bond Fund, where he

finished in the top 2% of all funds invested in intermediate-term bonds for the 10 years that

ended prior to his departure. He was fired by TCW in 2009. In the aftermath, Gundlach and

TCW sued each other and went to jury trial in California; TCW alleged that Gundlach stole

trade secrets (TCW prevailed, but was awarded $0 for the claim), Gundlach sued over

compensation claims (Gundlach prevailed, and was awarded $66.7 Million). After every Fed

Reserve decision, Mr. Gundlach makes a statement on CNBC and on 12/18/24, this is what he

had to say:

 Now more confusion than ever before.

 Inflation has not improved since September 2024.

 No aggressive rate cuts in 2025. It will be at a slower rate. Very bad for the stock market.

 Now the Feds are extremely data dependent.

 Inflation will not get to 2% (Fed target) in 2025.

 Inflation could go up to 3% in 2025.

 Maximum of 2 rate cuts in 2025.

 Pause in cuts is coming.

 No rate cut in January.

 The future is unpredictable.

 Trumps proposed policies are inflationary. Rates could go up.

 When the feds were cutting rates over the past 3 months, the bond market raised rates up

by 8 base points. Mortgage rates are connected to treasury rates.

 Bond yields look good. It is easy to get safe bons with a yield of 7%. Since the Feds are

pausing, bond yields will remain high.

 The US dollar has been spiking. Bad for US exports.

 We cannot resolve our debt problem by growing the economy. “Arithmetic does not add

up”.

 Interest rates on the US debt has gone from $300 Billion to $1.3 Trillion.

 30 years ago, Ross Perot was correct about the interest payment problem. (Herbert W

Bush started raising taxes, which was continued by Clinton so during the Clinton years

for the first time since WW2, we had a balanced budget but Gearge W destroyed that

with his massive tax cuts).

 Short end treasuries look better than the long end (i.e. 20 yr, 30 yr).

3

 His advise- Increase your cash position to 30%+. Gold and Bitcoins will do well in the

future but he does not recommend bitcoins.

Rick Rieder, managing director, is BlackRock's chief investment officer of Global Fixed

Income, head of the Fundamental Fixed Income business, head of the Global Allocation

Investment team, a member of BlackRock's Global Operating Committee, and chairman of the

firm-wide BlackRock Investment Council. This is what Mr. Rieder has to say on 12/19/24:

 Equity volatility double due to the Fed decision on rate cuts.

 Inflation is done coming down.

 The probability of Feds hiking rates in 2025 is very high.

 Past 12/17/24, all markets looked “bubblish”.

 Now it is a little healthy.

 3 to 4 year bonds look good.

 Due to budget deficits/debt, buy gold and bitcoins; but recent high prices is a warning

sign.

Raymond A. Merriman is the President of The Merriman Market Analyst, Inc. and founder of

the Merriman Market Timing Academy. He is a Commodities Trading Advisor (CTA),

financial market analyst, and editor of the MMA Cycles Report, a monthly market advisory

newsletter that specializes in stocks, interest rates, currencies, precious metals, crude oil and

soybeans since 1982. He also writes a daily and weekly report for more active traders.

Merriman is also well-known as a professional astrologer, having studied the subject since

1967, and receiving his professional certification form AFA (American Federation of

Astrologers) in 1972. Four years ago, when no one suspected, using astrology, Merriman

predicted that Joe Biden will not run for President in 2024 as he would be “disabled or too sick”

to do so. Then he stated that Kamala would have a better chance but even Kamala cannot beat

Trump as this is a very good time astrologically for Trump. That is credibility! On 12/23/24,

Merriman stated, “It’s chaos time. It is Jupiter in Gemini square Saturn in Pisces. Its Mars

retrograde. Next week, it will be Venus square Uranus. As expected, this holiday season is not

likely to be boring. So let’s try to be merry and embrace the excitement of the unexpected and

the chaos and entertainment that comes with it. Think of the next few months as a huge tide

coming in , and then the riptide starts as the waves go back out. In the US, the efforts may be to

drain the swamp but the results may instead seem like a man made tsunami. Here, we have all

the cosmic elements that lead to huge swings in financial markets. I expect we have at least two

stock market reversals exceeding 10%, may be even more than 25% (in one case) It should be

quite exciting! Hold on! Hang tight! The tide is now rising! It is a fine time to learn the

principles of surfing”

Have a great 2025!

Fernndo

December 4 Post

Hi Again,

Take a look at the scorecard. We had a 8.96% gain for our portfolio in November. Now all

markets are in a bubble so be very careful. Carley Garner is an American commodity market

strategist and futures and options broker and the author of Trading Commodity Options with

Creativity, Higher Probability Commodity Trading, and A Trader's First Book on Commodities,

published by DT publishing an imprint of Wyatt-MacKenzie. On 11/12/24, Carly predicted that

the S&P 500 could go down significantly. Carter Braxton Worth is an American financial

analyst and stock market strategist. Each year since 2008, he has appeared on institutional

investor's All America Research Team, ranked as one of the Top 3 technical analysts on Wall

Street. Carter is married to Andrée Jill Finkle. On 11/3/24, Carter stated that “home builder”

stocks should go down and recommended buying put options on ITB ( iShares US Home

Construction ETF) as option premiums have declined.

On 11/13/24, inflation figures (Core CPI) came in showing that inflation is “sticky” and not

going down to 2%. Short end yields on the treasuries were going down while the long end kept

rising due to budget deficits. On 11/20/24, Fed Governor Bowman stated that the progress we

have been seeing on the inflation front has slowed. Do not expect rate cuts!

Bitcoin supply is limited but the demand keeps growing. Trump is expected to buy 6% of all

Bitcoins for a government reserve. Ever since a Trump victory was expected, Bitcoin prices

have been skyrocketing. When the “Yen Carry trade” fell through and Bitcoins fell about 25%,

for a trade I bought the Bitcoin ETF IBIT on 8/6/24 at $31.83. On 12/3/24, IBIT is at $54.46- a

71% gain within 4 months.

MicroStrategy is a business intelligence (BI) firm that was founded in 1989 by Michael J.

Saylor and Sanju Bansal. Saylor started MicroStrategy with $250,000 in start-up capital from

DuPont, where he had a consulting contract. The company's software was inspired by a course

on systems-dynamics theory at MIT. MicroStrategy's first major client was McDonald's, with a

$10 million contract in 1992. The company's revenues increased by 100% each year between

1990 and 1996. MicroStrategy went public on June 11, 1998. Saylor was initially skeptical of

Bitcoin, but became a believer around 2020. He began adding Bitcoin to MicroStrategy's

treasury, believing it would give the company an advantage over the long term. MicroStrategy's

Bitcoin holdings have made it a way for investors to gain exposure to Bitcoin without buying it

directly. As of November 25, 2024, MicroStrategy held 386,700 Bitcoin, which is 1.84% of the

total that will ever be mined. To start with, MicroStrategy provided a way for investors to gain

access to Bitcoin without having to buy futures contracts or purchase tokens on a random

cryptocurrency exchange. Following its latest round of buying activity, MicroStrategy holds

386,700 Bitcoin (as of Nov. 25), which represents 1.84% of the 21 million Bitcoin that'll ever

be mined. No company comes remotely close to holding as many Bitcoin in reserve as

MicroStrategy. It's often easy for investors to buy or sell shares of companies that trade on

major U.S. exchanges, and there's minimal concern about nefarious activity or theft, which isn't

always the case when buying Bitcoin directly on overseas cryptocurrency exchanges. Second,

2

MicroStrategy is benefiting from first-mover advantages. In addition to Bitcoin being the first

decentralized cryptocurrency, MicroStrategy is the first public company to effectively adopt

Bitcoin purchasing/investing as an operating model. Investors have a tendency to flock to

businesses that are first movers in ultra-popular trends. Third, MicroStrategy has found a way,

for the moment, to use leverage to its advantage. The company has been issuing ultra-low-yield

or 0% yield convertible senior notes to raise capital to purchase Bitcoin. These convertible notes

allow the holder to either be repaid in full, or convert their note into shares of MicroStrategy at

a premium to where they are now. On social media message boards, you might see this strategy

referred to as "MicroStrategy's infinite money glitch." Convertible note sales allow the company

to buy more Bitcoin, which in turn increases the price of the world's largest cryptocurrency and

allows the company to issue more convertible notes. It's a repeating cycle that's undeniably

played a role in pushing Bitcoin close to the psychologically important $100,000-per-token

level. While there's no question that MicroStrategy has proved the skeptics wrong, thus far,

history has a way of rhyming on Wall Street. Similar leverage-driven scenarios like this have

always eventually (key word!) ended in pain for the companies and shareholders behind them.

Bradley Thomas Gerstner is an American investor and hedge fund manager. He is Founder,

chairman and CEO of Altimeter Capital. Gerstner appeared on the 2022 Forbes Midas List after

his firm's successful investments in Snowflake and Grab. Brad is the ultimate expert on

technology stocks. On 11/21/24, Brad stated:

 Nvidia announced a blockbuster quarter on 11/20/24

 Nvidia price will rise while Intel and other chip stock prices will decline.

 2025 will be a robotaxi year and Tesla will benefit.

 This is not good for Uber.

 Time to buy software stocks.

 Time to get out of stocks like Pfizer

At times, like buying a lottery, I put in a little bit of money on stocks that might rise

significantly in the future (even though the fundamentals are pretty bad). The next phase of

computing is going to be “Quantum Computing”. On 11/15/24, I bought QUBT and RGTI after

doing a little bit of research. 11/15/24 to 11/25/24, in 10 days, QUBT was up 131% and RGTI

was up by 95%! On 11/25/24, Jim Cramer (on CNBC) stated that “people are buying anything

with quantum in the name”! So true! As if he read my mind! Jim stated that QUBT is up 500%

and it was a beverage company till 2018. Cramer said that these are signs that the market is in a

bubble and it makes him nervous. I agree 100%. That is why I always have some put options as

a hedge (if I lose the money, it is a tax deduction). All markets are in a bubble- Stocks, Gold,

Biotcoins etc. etc. Buyer beware!

Have a Merry Christmas!

Fernando

November 11 Post

Hi Again,

October was very uneventful. Markets waited for November – Elections and the Fed Meeting.

At this time, all the markets (stocks, cryptos, gold etc) are in a bubble but bubbles can go on

expanding for years-especially when we have a $6 Trillion in money market funds and the Feds

are determined to keep lowering rates in to a very healthy economy. All bubbles end in crashes

but nothing to fear. I never understood why people feared crashes. Crashes give us amazing

buying opportunities. How would you like to buy Apple, Microsoft, Nvidia, Meta at 50% of its

current price? If that happens, I will buy call options and make a 1,000% profit within 12

months. 99% of the time, markets are dull and boring.

Carolyn Boroden has been a commodity trading advisor and technical analyst for

more than 20 years and has worked on many of the major trading floors in the U.S.

She is founder and president of Synchronicity Market Timing, LLC, a Fibonacci

trading advisory service. On 11/5/24, Carolyn stated:

 The 5 day moving average moved below the 13 day moving average so on

11/5/24, the market was in a risky state.

 She expected the market to bottom anytime after 11/5/24.

 S&P 500 made a bottom on 11/4/24.

After the 11/7/24 Federal Reserve decision, Fed Chair Powell had a news

conference:

 The economy is strong.

 The labor market has cooled.

 Wages are rising but consistent with inflation.

 Over the past 3 years, inflation declined from 7% to 2.8%. (Since we did not

have deflation, still we feel the impact of 7% inflation-2.8% is over the 7% we

previously had. Economists do not like deflation as deflation always come

with a deep recession).

 On 11/7/24, interest rate was cut by 25 Bps.

 The Fed Reserve is still in the process of reducing their balance sheet. (That is

like increasing rates).

 At this point, the unemployment rate is at 4.1%-the labor market is not tight as

it used to be and not a source of inflation.

2

 Elections do not have an impact on their decisions. As Fed Chair stated, “We

do not guess or speculate”.

 They have been watching bond yields rising.

 No comments on fiscal policy. If asked by Trump, he will not resign and not

concerned about Trump demoting or firing any of the Board members. He

said, “No. Not legal”. The Fed Reserve is only accountable to the congress.

Expect to see fireworks in the congress in 2025! Markets would fluctuate

wildly giving us amazing buying opportunities!

 If congress changes tax laws as they have promised to do, the Fed Reserve

will create econometric models to reflect those changes and change monetary

policy accordingly.

 New rent leases show deflation but still old leases are hurting people.

 Rate of inflation is coming down-even with insurance premiums.

Jeffrey Edward Gundlach (aka “Bond King”) is an American businessman,

investor, and philanthropist. He is the founder of DoubleLine Capital, an investment

firm. As he always does, soon after the Fed interest rate change, he made the

following observations:

 Bond rates started going up expecting a Trump victory as all economists

expect worse deficits under Trump

 Per household surveys, during the past 11 months, we had a loss of jobs.

Economy is not strong.

 Supply of treasury bonds is astonishing due to the $1.3Trillion deficit. Very

troubling.

 Do not buy the 20 or the 30 year old bonds. Do not be exposed to the growing

deficit problem.

 New rent leases show no inflation but old leases still show inflation.

 Trump’s policies will raise inflation and deficits. Also, tax cuts will raise the

yields on long bonds.

 Trump has always been a debt guy.

 During the CNBC, he made a shout out to Elon Musk, “Elon, if you hear this,

call me. I can show you how to cut 2 Trillion off the Federal Budget”.

 Around 1980, investors considered IBM bonds to be safer than US Treasuries!

 Bad to have tax cuts or extend tax cuts.

 He is writing a “white paper” on the economy.

3

 The dollar is influenced by treasury rates.

 The Federal Reserve follows the 2 year Treasury. Look at history!

 He praised Fed Chair Powell saying that “Trump cannot fire me. Not legal”.

The Federal Reserve only accountable to the congress.

 Still likes India for the long run. Manufacturing is moving from China to

India and Mexico.

 Bitcoins, gold, silver in a bubble. Central Banks around the world are buying

gold like crazy!

 He owns gold but not bitcoins (too risky).

Have a great month!

Fernando

Oct 6 Post

Hi Again,

Last month the Federal Reserve, as expected, cut the interest rate by 50 BP but amazingly the

bond market kept raising rates! They are not going to get the desired effect. Mortgage rates are

linked to the 10 year treasury so mortgage rates have been rising too. The most popular ETF for

Treasuries is TLT- iShares 20+ Year Treasury Bond ETF (TLT). On 9/16/24 TLT was at $101

and by 10/4/24 it was at $95- 5.94% reduction in 18 days.

Carley Garner is an experienced futures and options broker with DeCarley Trading, a division

of Zaner Group, in Las Vegas, Nevada. Her commodity market analysis is often referenced on

Jim Cramer’s Mad Money on CNBC and she is a regular contributor to TheStreet.com and its

Real Money Pro service. Garner is also a regular on the speaking circuit and can be found at

TradersEXPOs and MoneyShows throughout the country. On 10/4/24 (CNBC), Carly stated

that most bond market professionals have a net short position on the 10 year Treasury as short

contracts increased by one million. Bloated budget deficits expected under Trump and Harris is

making bond gurus nervous. Carly expects these people to get hurt in the future as it is never a

good idea to “fight the feds”. When these people run to cover their shorts, we could see yields

going lower in a big way.

I sent my last newsletter on 9/2/24, and on 9/3/24 my predictions came true. On 9/3/24,

S&P500 was down 2%, Nasdaq was down 3% and the volatility index (aka Fear Index) was up

by 5%! My VIX call options were up by 21% in one day. Some of my put options on the

Nasdaq (QQQ) were up by 64%. On 8/16/24, I bought some call options on the VIX, expiring

June 2025, with a strike price of $20; and in 1 days, on 9/4/24, I sold them with a gain of 124%!

On 9/6/24, per Carter Worth (Carter Braxton Worth, a 35-year Wall Street veteran, is

the CEO/Founder of Worth Charting LLC. He was Head of Technical Analysis at Cornerstone

Macro Research beginning in 2016. Prior to his role at Cornerstone, he was Chief Market

Technician at Sterne Agee and at Oppenheimer Holdings Inc.) stated that the dollar has been

going down and oil has been going down and now the stock market will go down. He also

stated that Nividia is a good buy at this time and on a PE basis, it has not been this “cheap” in

about 2 years.

With the expected slow down in the economy and due to other factors (except for the 2 wars),

oil prices are expected to drop in the future. Saudis warned that if OPEC members cheat on

their contractual agreements, Saudis will bring down the price to $50. If China finally

stimulates domestic consumption, that could be bullish for oil traders. Most US experts believe

that oil will drop to $70. It is a triple top in the 5-year chart. High for the past 6 months was $82

and in 2020, it dropped below $25.

On 9/18/24, Fed Chair Jerome Powell stated:

 The economy is strong

 Inflation is at 2.2% (up to August 2024)

 The labor market had cooled

 Inflation has eased substantially

 Goals on inflation/employment is balanced now

 Now going to normalize rates without giving up on inflation (dual mandate)

 Consumer remains resilient

 Will make future decisions based on data (month to month).

 Not in a hurry to reduce rates

 Long term inflation expectations are well anchored

 All 19 members of the Fed Reserve wanted 3 more cuts in 2024

 The time to support the labor market is when the labor market is strong or else it is too

late.

 In the future, will not go down to 0% or negative rates.

Mr. Jeffrey Gundlach is CEO of DoubleLine. In 2011, he appeared on the cover of Barron's as

"The New Bond King." In 2013. After every Fed decision, Mr. Gundlach appears on CNBC and

this is what he had to say on 9/18/24:

 The Feds should have cut rates in July 2024

 Long end bond rates are up after the Fed cut as they are afraid that inflation might re-

ignite.

 Buy gold

 The Fed Fund rate will get to 3.5% prior to December 2025.

 They might cut another 50% in November (after the elections)

 They do not care about elections

 Job reports are about 75,000 overstated (per the Fed Reserve)

 Private Capital is in a bubble

 Expect weaker economic reports in the future

 Future evidence will show that a recession started in September 2024

 Powell quite confident of the future trend of inflation

 Powell does not expect a recession

 Long term bond yields will continue to rise

 Feds will lower rates by another 75 BPS

 No one knows what would happen to the housing market

 Long term Treasuries are the best hiding place for investors.

 Inverted to de-inverted yield curve is predicting a recession

 As the dollar is going down, buy foreign stocks. Gundlach is bullish on India

3

 Long bonds will not rally in the future

 Recession will be good for long bonds

 Rents are going lower but it will take time

 Private markets are bad as they do not have “market to market’ valuations

 Russell 200 will benefit more than the S&P 500.

Have a great month!

Fernando

September 2 Post

Hi Again,

I sent out my last newsletter on Sunday 8/4/24. Next day, Monday (8/5/24), the market opened

with a mini crash and for a couple of hours, no one was able to get in to their accounts at

Fidelity and Charles Schwabs. What is the VIX or the volatility index? VIX is the ticker

symbol and the popular name for the Chicago Board Options Exchange's CBOE Volatility

Index, a popular measure of the stock market's expectation of volatility based on S&P 500 index

options. Prior to 8/2/24, On 7/10/24, VIX was at 13. I bought some call options on VIX on

8/2/24 with a strike price of 50. On 8/5/24, market opened with the VIX hiking up to 65 but I

could not sell my options as Fidelity and Schwabs were both down due to heavy volume. This

all happened due to the unwinding of the “Yen Carry Trade” (mostly shorting the Yen, and

going long the NASDAQ via QQQ) as the Japanese central bank surprised the world with an

interest rate hike due to inflation in Japan. The Japanese market (Nekei) had its biggest drop

since “black Monday” in 1987. I do not believe that this story is over yet. After the Lehman

Brother went down in 2008, it took another 6 months or so for the “next shoe” to drop. Per

some experts, this event killed 3 financial institutions in the US. Per former Fed President of

Dallas, 1987 crash also was started in Asia. From 7/3/24 to 8/5/24, NASDAQ fell $2 Trillion.

8/5/24 was the worst day for S&P500 since 2022. On 7/29/24, Bitcoin was at 69,351 but on

8/5/24, it fell to 54,237. This too was a direct result of the unwinding of the “Yen Carry Trade”.

I do not believe in the Bitcoin concept (US should have banned it years ago) but on 8/5/24, I

bought some Bitcoin through an ETF. Joe Brusuelas has over 20 years of experience in finance

and economics. He specializes in analyzing U.S. monetary policy, labor markets, fiscal policy,

economic indicators and the condition of the U.S. consumer. Brusuelas provides a

macroeconomic perspective to help clients address unique issues and challenges facing their

businesses and the industries in which they operate. On 8/9/24, Joe Brusuelas stated that the

total “Yen Carry Trade” was worth $4.4 Trillion but with the leverage used, it would have a $28

Trillion impact on the global economy. For years, most experts were saying that gold and

bitcoin would act as a hedge against market crashes but we did not see this on 8/5/24. The

physical gold ETF, “GLD” was 225 on 8/1/24 and on 8/5/24, it was at 220.

September is the worst month for the market so do not be surprised to see volatility in the

market. That volatility could run for the next few months as we get closer to elections. It is

nothing more than a buying opportunity. Carter Braxton Worth is an American financial analyst

and stock market strategist. Each year since 2008, he has appeared on institutional investor's All

America Research Team, ranked as one of the Top 3 technical analysts on Wall Street. On

8/9/24, Carter Worth stated that we do not have volatility in Bull or Bear markets and when we

do have volatility, that is a sign that the market is in transition. He believes that we are

transitioning in to a bear market.

Have a great month!

Fernando

August 4 Post

Hi Again,

Look at the calendar! Historically the market peaks in August. September is the worst month of

the year for the market and most crashes take place in October. Put on your seat belts and get

ready for a ride! Market analysts talk about a “risk on” times and “risk off” times. We get the

best bargains during corrections. That's seemingly the credo for contrarian investing. Nathan

Rothschild, a 19th-century British financier and member of the Rothschild banking family, is

credited with saying that "the time to buy is when there's blood in the streets." This is why I

always advise everyone to have 25% to 50% of your portfolio in cash at all times. Even if you

have a real loss in one place, you can easily recover in the stock market. It is not that easy in the

bond market. For many months, the market astrologer Merriman has been predicting that in

November 2024, the US stock market will hit a 4 year low. Many countries had elections in

2024; and all those markets fell sharply in 2024. I always keep some put options on the

S&P500 (SPY) as hedges. As the market falls, I buy more hedges. Consider what happened to

the volatility index! On 5/11/24, it was at 11.80. On 8/2/24 it ended at 23! If I was smart enough

to buy call options on the VIX on 5/11/24, I could have easily made a 1,000% profit in 53 days!

During the past 5 years, the highest point reached by VIX was 65 (panic at the highest point).

Since 11/28/21, the highest point reached by VIX was around 30. Usually when the VIX is

between 30 and 70, it is a good time to buy stocks. On 8/1/24, the Dow (DJIA) had an intra day

low of 750 points and on 8/2/24, the intra day low was 898. Per CNBC, 8/1 and 8/2 volume

was mainly due to hedge fund purchases and sales. It is going to be an interesting Fall 2024! Be

defensive for the next 4 months.

I love studying stock and Index option tables. I find it very interesting to see what some are

buying and selling. When the covid crisis hit China, we were assured that covid will not get to

the US but it was unrealistic. When covid hit China, Disney was at about $150 and one put

option contract with a strike price of $50 (expiring in one year) was going for $90. I thought the

probability of Disney falling to $50 in one year was less than 1% but like buying a lottery, I

bought some-assuming that I will end up losing everything. In one week, the paper value

doubled and in 3 months when Disney considered opening their parks in China I sold my put

options. What I bought for $90, in 3 months, I sold for $850! That is the magic of options. Last

week I was amazed to find more than 100,000 put option contracts on the S&P 500 (SPY)

below $150 within the next 12 months. I heard that most of these were bought by hedge funds.

What does this mean? On 7/16/24 SPY hit a high of $565. For SPY to get to $150 within one

year, the market has to fall 73% within one year. In my opinion, the probability of that

happening is less than 1%. Per market astrologer Merriman we are long overdue for a 90%

correction. We cannot control what would happen but we can react accordingly. On 7/22/24, I

bought some SPY put options (expiring 3/21/25) with a strike price of $180. The probability of

losing everything was 99%. On 8/2/24, those options had a paper gain of 135% in 11 days!

2

For the past few months, Gundlach has been advising people to move from stocks to bonds

(especially, bond funds). That is a no brainer as interest rates fall, bond prices rise. Over the past

4 years I have gone in and out of bond fund ETFs and I have done very well. I prefer to use the

bond ETF known as “TLT”. iShares 20+ Year Treasury Bond ETF (TLT). Even though I

was very late to the party this time, I purchased some call option on TLT on 8/1/24 and on

8/2/24. On 8/2/24 alone TLT rose by 3%-which is rare for a bond fund. On my TLT call options

purchased on 8/1 and 8/2, I did not expect to make money till September 2024. On 8/1/24, TLT

opened at $95.14. On 8/2/24, TLT closed at $98.28. On 8/1/24, I purchased some TLT call

options with an expiry date of 4/17/25 with a strike price of $105. In other words, expecting

TLT to be above $105 on 4/17/25. Those call options went up by 105% in 2 days! On 8/1/24, I

also purchased some TLT call options expiring 4/17/25 with a strike price of $110-expecting

TLT to be above $110 on 4/17/24. Those were up by 61% in 2 days! Then on 8/2/24, I also

bought some TLT call options with an expiry date of 6/20/25, with a strike price of $110-

expecting TLT to be able $110 by 6/20/25. Those options rose by 12% in 8 hours! I do not

expect TLT to go up in a straight line. We are sure to have “counter trend” moves. Even though

I have been only trading TLT for bonds, now due to the “re steepening” of the yield curve, it is

better to go long on the short end; specifically, the ETF, “IEF”. iShares 7-10 Year Treasury

Bond ETF (IEF) .

On 7/30/24, for our portfolio, I replaced Intel with Nvidia (NVDA). When it goes down in price

I will purchase more and decrease the average cost. For the past 4 months, on a weekly basis, I

was selling “covered call options” (for each 100 stocks owned, selling 1 call option that expire

in 7 days) on Intel. For those 4 months, I got a 7.5% gain per month on selling these Intel call

options. Prior to 8/1/24, their lowest point was $30. The highest point for the past 2 years was

$50. Per company reports given prior to 8/1/24, most experts expected very good results from

Intel. In fact, apart from selling covered calls on Intel, I bought some call options on 7/11/24

and in one day, they were up by 18%. Then came Intel earnings on 8/1/24! It was terrible! Intel

had its worst day since 1974 and fell 33%! All what I earned by selling covered calls got wiped

out. Fortunately, due to the put options I owned on Intel as “hedges”, I recovered 1/3 of my

loss. I should have had more puts as hedges. In the future, when I sell covered calls (probably

not on Intel), I will have more puts as hedges. Even if those hedges go down to zero, those are

tax deductible. Learn and live! Some are comparing Intel to Boeing but most agree that Boeing

is in a better position. If Intel loses the billions it gets from the government, it might declare

bankruptcy.

Jeffrey Gundlach was formerly the head of the $9.3 billion TCW Total Return Bond Fund,

where he finished in the top 2% of all funds invested in intermediate-term bonds for the 10

years that ended prior to his departure. Whenever the Federal Reserve makes a decision on

rates, Gundlach comes up on CNBC. This is what Gundlach stated on 7/31/24:

 The stock market could go up now as the Feds signaled a rate cut in September.

 Jerome Powell was over-prepared for the meeting.

3

 Unemployment rate is going up and the Federal Reserve is keeping close tabs on it.

 Expect 3 rate cuts in 2024.

 In the second half of 2024, expect to see a lower rate of inflation- “seasonality of

inflation”.

 Feds will cut more than what the market expects.

 In September 2024, we .will discover that we are in a recession.

 People who are losing jobs cannot find other jobs.

 Government is hiring more to manipulate labor numbers.

 Hi Yield Bonds are very attractive. 8% can be found in safe bonds.

 Gundlach likes gold.

On 8/2/24, Citibank announced that we are already in a global recession

Have a great month!

Fernando

July 2 Post

Hi Again,

The 3 tech stocks we added to our portfolio on 6/1/24 (Adobe, Dell Tech and Salesforce) had an

average gain of 22% in June; which led to a 36.53% gain for the total portfolio in June. The

market had a pretty good first half of 2024. Everyone is talking about NVIDIA. Now the

biggest market cap stock in the world! $3T Mkt cap as of 6/30/24. On 6/10/24, it had to 10 to 1

split. On 6/11/24, I bought some call options expiring January 2025 and in 2 days, my call

options were up by 25%! Two years ago, I bought some NIVIDIA at $117, hoping to buy more

when it drops but it kept moving up. I do not like to buy more when the stock prices go up as it

increases my average cost. By 6/7/24, NVIDIA was up by 1000% !!

Larry Richard Williams (born October 6, 1942) is an American author, stock and commodity

trader, Williams is the author of 11 books, most on stocks and commodity trading. Williams has

created numerous market indicators, including Williams %R, Ultimate Oscillator, COT indices,

accumulation/distribution indicators, cycle forecasts, market sentiment, and value

measurements for commodity prices.[8][9] Williams won the 1987 World Cup Championship of

Futures Trading from the Robbins Trading Company, where he turned $10,000 to over

$1,100,000 (11,300%) in a 12-month competition with real money. On 6/14/24, on CNBC,

“Mad Money”, Larry stated that NVIDIA is close to a temporary top and it should fall to around

$90. On 6/18/24, it made an intra day high of over $140 and ended the day at $136. From

6/18/24 to 6/24/24, it fell from $136 to $118! Stay tuned! If NVIDIA goes down 25% to 50%, it

would be a perfect buying opportunity!

A couple of years ago, when everyone was bullish on regional banks, I bought put options to

short sell regional banks through the ETF, “KRE”. When the Silicon Bank failed in 2023, my

put options tripled in price. A few months ago, once again, expecting the Feds to cut rates, Wall

Street was bullish on regional banks. I do not agree. Even if interest rates go down, it is very

unlikely that we will see zero percent rates again. If we do, we will have a huge problem with

inflation and another global economic disaster. Regional banks are going to have crisis as the

office real estate crisis grows all over the US. According to one estimate, these real estate

companies have to increase rents by 42% to stay alive. With very high vacancy rates, that is not

possible. In my opinion, by the end of 2026, we should see this negative impact on regional

banks. Therefore om 6/12/24, I bought some put options (to short sell) regional banks (ETF,

“KRE”) that expire in December 2026. Once again I expected the prices to drop in the short run

so I can buy more and make a profit around December 2026. In just 14 days, on 6/26/24, my put

options were up by 51%! If the Feds lower rates later this year, regional banks (KRE) will go up

and my put prices will go lower; which will give me a chance to buy more.

Jeffrey Edward Gundlach (born October 30, 1959) is an American businessman, investor, and

philanthropist. He is the founder of DoubleLine Capital, an investment firm. Gundlach was

formerly the head of the $9.3 billion TCW Total Return Bond Fund, where he finished in the

top 2% of all funds invested in intermediate-term bonds for the 10 years that ended prior to his

departure. He was fired by TCW in 2009. In the aftermath, Gundlach and TCW sued each other

and went to jury trial in California; TCW alleged that Gundlach stole trade secrets (TCW

prevailed, but was awarded $0 for the claim), Gundlach sued over compensation claims

(Gundlach prevailed, and was awarded $66.7 Million). In 2009, shortly after his firing from

TCW, Gundlach founded Doubleline, along with Philip Barach and 14 other members of

Gundlach's senior staff from TCW. Barach was Gundlach's co-manager of the $12 Billion TCW

Total Return bond fund. In a February 2011 cover story, Barron's called him the "King of

Bonds" On 6/12/24, soon after the Fed decision, Mr. Gundlach made the following

observations:

 Powell is neutral now.

 Powell used the word “balance” quite a bit.

 Less confident of a rate cut in 2024.

 Powell is in a reactionary mode.

 Feds are tilting towards a rate cut but a rate hike is possible in 2024/2025.

 Labor market is weakening but not in a major way.

 We are receiving highly contradictory information on the economy.

 Next move should be a rate cut.

 Money Supply M2 is way above pre-pandemic levels and it is growing.

 Inflation depends on the life style of the person. Top 50% of people are doing well and

the bottom 50% are in trouble.

 Unemployment rate dipped below 4%-first time since 1960. Expected to be at 4.4% by

December 2024.

 Government might try to bring down gas prices.

 Some low risk bonds have a yield of around 8% per year.

 The stock market needs rate cuts to survive.

 Still bullish on Gold and India (strongest economy).

 Current situation is comparable to 1968.

 It would be suicidal to extend tax cuts which is a blow to deficits.

Have a great month!

Fernando

June 3 Post

Hi Again,

Have you heard of “Sell in May and go away”? If others sell, it would create an opportunity for

us to buy. We saw that in some tech stocks over the past few weeks. Salesforce (CRM) dropped

from $270 to $212 ! I bought some and when it goes down further, I will buy more. However,

on 5/31/24, CRM was up by 7%. Dell dropped from $179 to $131. I bought some and when it

goes down further, I will buy more. Since January, Adobe (ADBE) has dropped from $634 to

$444. Nathan Rothschild, a 19th-century British financier and member of the Rothschild

banking family, is credited with saying that "the time to buy is when there's blood in the

streets." As for our newsletter portfolio, I replaced Delta Airlines, Southwest Airlines and

WYNN with Salesforce (CRM), Dell Computers (DELL) and Adobe (ADBE). These will

appear in the July 2024 scorecard. I seriously considered adding Pfizer (PFE) as it has a chance

of doubling over the next 5 years. On my personal accounts, I have been making money selling

covered call options on Pfizer (PFE).

Have you been noticing that it was with great difficulty that the Dow (DJIA) went above

40,000? It only managed to stay above 40,000 only for 3 trading days! On 5/31/24, call options

on DJIA (DIA) at 40,000, expiring 6/7/24 is going for 2 cents or $2 per one contract (or 100

shares of DIA). This implies that no one expects the DJIA to be above 40,000 on 6/7/24.

According to CNBC on 5/28/24, Office Real Estate loans maturing in 2024 is at $30 Billion!

These loans are getting refinanced at high rates. If landlords want to break even, they have to

raise rents by 42%. Banks will sell debt creating a once in a lifetime opportunity. Prices are at a

25 year low. Probably, this is a good time to short regional banks (KRE) again.

The rise of private credit over the past decade has been nothing short of monumental.

But JPMorgan Chase CEO Jamie Dimon warned this week that parts of the burgeoning sector

have some of the same problems that the mortgage market had prior to the Great Recession of

2008, including questionable credit ratings from ratings agencies. “I’ve seen a couple of these

deals that were rated by a ratings agency, and I have to confess it shocked me what they got

rated,” he said at a conference Wednesday, per Bloomberg. “It reminds me a little bit of

mortgages.” Right after these comments, Dimon said when it comes to private credit, there's

been a similar dynamic at play today. The private credit market, where non-bank financial

institutions like insurance companies and hedge funds lend to corporate borrowers, has had a

renaissance in recent years with banks reducing their lending due to regulatory scrutiny,

inflation, and higher interest rates. Assets and committed capital in the sector surged from

around $500 billion a decade ago to $2.1 trillion last year, according to IMF data. And private

credit assets under management are expected to hit $2.8 trillion by 2028, according to  Preqin’s

2024 Global Report .on’t expect it to be systemic, but I do expect there to be problems,” Jamie

Dimon added. (Will Daniel, Yahoo Finance, 5/30/24)

Have a great month but do not sell and go away!

Fernando