Hi Again,
April 2026 was the best month for the stock market (S&P500) in 6 years! When it comes to our newsletter ‘scoreboard’ portfolio, it went up 7.25% in April 2026, but it fell 7.02% in March 2026. Markets fluctuate. Frankly, I believe that the market has been too complacent, ignoring the real risks we face with the Iran War etc. People are hopeful but hope is not a good strategy. This is how we get into crashes. In the last newsletter I warned that due to this war, the whole world could go into a recession in 2026. Since then, the managing director of the International Monetary Fund warned that due to this war (if it ends or not), the whole world will go into a recession and inflation rate would go over 5%. That is stagflation. Remember the 1970s? The US will do much better than other countries, but we will feel the effect. 70% of revenue of the biggest US companies come from overseas. This will be good for the US domestic oil and gas industry. Already countries like Japan are switching from middle east oil to Alaska. On 5/6/26, Google (aka Alphabet) became the world’s biggest market cap company for a few minutes! Remember when Wall Street experts were saying that Open AI is going to kill Google Search? Now we see people jumping from Open AI ChatGpt to Google as it better. As I have been saying for decades, once again, gold did not act as a hedge against market corrections or global events. Nor did Bitcoins. Compare the price chart of gold to the market chart for the past 100 years and you will see the evidence. Gold was in a bubble, so everyone got in to gold to make money out of that trend. This time around, what acted as a hedge? The US Dollar! Even now in a global crisis, people run to the US dollar.
Tesla announced that they would increase capex spending exponentially and to expect losses for the next 2 years. This is not a bad thing. If the price of Tesla drops, it is an opportunity to buy more of Tesla.
For the past few years, I have been saying that the 2 worst companies on Earth are Intel and Boeing. Bad management! Recently, after 30 years, Intel made a new high. On 8/11/25, Intel was at $20. On 3/26/26, Intel was at $40. On 5/6/26, it was at $111! Why? AI agents are autonomous software systems that perceive their environment, reason, and take actions to achieve specific goals on a user’s behalf. Unlike chatbots that just generate text, agents use tools, APIs, and memory to complete multi-step workflows, such as booking meetings or researching data. They function by observing, planning, and acting. Now there is a huge demand for CPU’s and Intel has the capacity to manufacture CPUs. However, I have my doubts about Intel. 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. Gene is one of the best tech stock experts. Many execs who left Intel told Gene that Intel is a “broken, dysfunctional company”. Beware!
Intel owes its success to Trump. Biden promised to give away $10 billion to Intel with no guardrails. Trump changed it and put $9 Billion and received intel stock for that amount. The US government got Intel stock at $20 per share. Trump bullied many companies to partner with Intel and now it is at $126 per share.
Over the past 6 months, what was the most bullish part of the market? Have you seen what “memory stocks” were doing? Sandisk (SNDK) was one of the best-going up over 50% within 30 days! Same thing with stocks like Micron (MU) and Samsung. There is a shortage of memory for data centers but do not expect them to go up to ‘infinity and beyond’. I was looking for an ETF on these stocks and finally a few days ago an ETF called DRAM came up. To short sell in a very small way, I put in a little bit of money on DRAM put options that expire January 2027. Probably I will lose 100% of the cost of my put option. It is like buying a lottery ticket. For me to make a decent profit, DRAM has to go down by 50% within the next 7 months.
AI is scarier than science fiction!
Treasury Secretary Scott Bessent and Fed Chair Jerome Powell reportedly convened Wall Street leaders on Tuesday in an emergency meeting about Anthropic’s latest AI model, flagging concerns over a greater cybersecurity risk.
Bessent and Powell assembled the group of high-powered execs at the Treasury’s headquarters to ensure banks were aware of the cyber risks presented by Anthropic’s new model, Mythos, and similar future models, reported Bloomberg and the Financial Times. Sources who spoke to Bloomberg said those in attendance included Citigroup CEO Jane Fraser, Morgan Stanley CEO Ted Pick, Bank of America CEO Brian Moynihan, Wells Fargo CEO Charlie Scharf, and Goldman Sachs CEO David Solomon. JPMorgan CEO Jamie Dimon was also invited but was unable to attend, the sources said. The Federal Reserve declined to comment to Fortune. The Treasury didn’t immediately respond to Fortune’s request for comment. The meeting comes just weeks after Fortune exclusively reported Anthropic was developing an unreleased model described by the company as “by far the most powerful AI model” it had ever developed, the existence of which Anthropic inadvertently made public last month through its content management system. Later, the company acknowledged that model was Claude Mythos. Anthropic on Tuesday released a report titled “Assessing Claude Mythos Preview’s cybersecurity capabilities,” noting how the model was able to find many 10- and 20-year-old vulnerabilities, as well as a 27-year-old vulnerability in OpenBSD, an operating system that has a reputation for being one of the most secure. Anthropic briefed senior U.S. government officials and industry stakeholders on Mythos Preview’s capabilities ahead of its release, someone with knowledge of the matter told Fortune. In a blog post, the company said it is willing to work with officials at all levels of government to ensure national security is a priority when rolling out new AI models, and that the U.S. maintains a lead in AI technologies.. Anthropic told Fortune that partnering with the government was the company’s plan from the start (the company is currently in a legal battle with the Pentagon after the Defense Department blacklisted it for placing restrictions on use of its AI technologies). In partnership with JPMorgan Chase, Amazon, and Google, along with other key tech companies, Anthropic launched Project Glasswing this week, an initiative aimed to secure critical software amid AI advancements. As part of the partnership, Anthropic said in a blog post, it would share what it learns with the tech and financial services industries. Aside from its partners, the company has extended access to 40 additional organizations who build or deploy critical software infrastructure, and committed up to $100 million in Mythos Preview usage credits, the most basic AI usage unit. Anthropic noted the project was launched in response to the capabilities the company has observed in its new frontier model, Mythos, that it believes could “reshape cybersecurity.” . “Given the rate of AI progress, it will not be long before such capabilities proliferate, potentially beyond actors who are committed to deploying them safely,” the post warned. “The fallout—for economies, public safety, and national security—could be severe.. Anthropic said in the post Tuesday it would release the new model initially to a limited group of industry partners to “enable defenders to begin securing the most important systems before models with similar capabilities become broadly available.”. As part of Project Glasswing, JPMorgan aims to reduce cyber risks stemming from AI’s fast-evolving capabilities. “Promoting the cybersecurity and resiliency of the financial system is central to JPMorgan Chase’s mission, and we believe the industry is strongest when leading institutions work together on shared challenges,” Pat Opet, JPMorgan chief information security officer, said in a statement. (Jake Angelo, Fortune, 4
Bradley Thomas Gerstner is an American entrepreneur, investor, venture capitalist, hedge fund manager, and podcaster. He is the 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. On 5/4/26, Brad made the following comments:
· Capes spent by the “mag7” will exceed $800 Billion om 2026 alone!
· We are not in a bubble
· April 2026 was best month in 20 yrs
· Per PE (price/earnings) all Mag7 are undervalued
· Nvidia has the lowest PE or the best value
· META CFO focused on cash flow and they will surprise the market during the latter part of 2026.
· Anthropic has been winning with revenue
· He would buy Open AI and Anthropic if they were public now.
· He will not own Microsoft now but maybe in the future
· Samsung will have more earnings than Google/Alphabet
On 4/29/26, the Federal Reserve made a decision on interest rates. They kept the rates unchanged as most expected. Three wanted to increase the rate and only one wanted to reduce the rate. The bond market raised all rates. For the first time in 40 years, 4 members dissented.
At the news conference, Fed Chair Powell (for the last time) made the following comments:
· The US economy is expanding at a steady pace.
· Current rates are appropriate.
· Mid East crisis is a threat to the US economy.
· Little change in the job market.
· Prices rose 3.5% for period ending 3/31/26.
· Powell will not leave the Board till all investigations are over.
· He will maintain a low profile.
· For the US people, it is important that the Federal Reserve maintain its independence. Due to things that happened during the past 3 months, he decided to stay at the Board for independence of the Fed Reserve. Prior to that he was thinking of retiring at this time.
· Housing market has remained weak.
· This will be a normal transition to the new Fed Chair.
· Lisa Cook decision to be made by the US Supreme Court is not a factor.
· Labor Market is not a source of inflation.
· We are at or close to a neutral rate.
· His colleagues are worried that “bullying’ will go on.
· Imports of USA-10%. Imports of Europe- 50%
Jeffrey Edward Gundlach is the CEO and CIO of DoubleLine Capital, a mutual fund company he co-founded that manages $91 billion in assets. He's known as the "Bond King" and is an expert in fixed income and bond investments. Gundlach has won several awards, including "Money Manager of the Year" in 2013 and being named one of Bloomberg Markets magazine's "50 Most Influential" in 2012. As he has done in the past, Jeffrey made the following comments about the Fed decision:
· Feds are not even thinking of lowering rates.
· 2yr Treasury to go up to 4%.
· In a month or two, CPI (inflation) to exceed 4%.
· Treasuries have been negative- down ½%.
· Do not buy gold
· Feds are truly neutral. Maybe they will start hiking rates by December 2026.Odds of a hike are greater than the odds for a rate cut.
· Transportation and food costs will go up due to the ‘Iran War’.
· Our weapon stockpile has gone down due to the Iran War and the Ukraine War so if China invades Taiwan, we will not be able to intervene.
· Now too much information coming from the Fed Reserve so the new Chair might have less meetings.
· It is negative for long term bonds.
· Private Capital- It is a slow moving problem. It is a trust factor problem. The problem is that they take illiquid assets and try to turn them in to liquid assets.
Have a great month!
Fernando