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