Post by Admin/YBB on Oct 16, 2021 8:09:02 GMT -6
Pg 10-11.
REVIEW. Elon MUSK boasted about his #1 place in Forbes billionaire rankings that put Jeff Bezos at #2 (do most people care about $209 billion vs $192 billion?). With Tesla/TSLA stock doing better than Amazon/AMZON, this petty boasting may go on for a while.
PREVIEW. LITHIUM is hot due to high demand from EVs. But there are only small lithium miners (ALB, LTHM, etc; all up sharply) who may face boom-and-bust cycle as lithium price has fluctuated widely ($6K-25K/metric ton over 5 years).
DATA THIS WEEK. Industrial production, capacity utilization on MONDAY; housing starts on TUESDAY; Fed beige book for 12 districts on WEDNESDAY; existing home sales, Philly Fed diffusion index, LEI on THURSDAY; manufacturing PMI, services PMI on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. DELL (looks interesting after the upcoming spinoff of its 81% interest in VMWare/VMW; remaining core-Dell will be in PCs, servers, storage with est yield 2.5%, est fwd P/E 8.4; now, Michael Dell controls 50% and Silver Lake 12% through dual-class structure; pg 14);
small-cap biotech Meira GTx (MGTX; genetics-switches/riboswitches; focus on patents, not on papers; partner JNJ owns 7%; pg 19).
BEARISH. See other stories.
Pg 13: FOLLOWUP. Q3 earnings season started with OK earnings for BIG BANKS; some of the earnings were from the reversals of past loan-loss reserves. Banks have run up already (KBE +32% YTD). Banks are benefitting from IPOs and M&A activity and now the loan demand is rebounding. But big drivers for big banks are not seen.
Pg 13: University ENDOWMENTS did quite well for the year ending on June 30 and venture capital may have played a big role. Can this be repeated? This was after a disappointing decade for alternative investments.
Pg 16: The FDA has several major decisions pending. That will affect Pfizer/PFE, Eli Lilly/LLY, Intra-Cellular/ITCI, BioMarin Pharmaceutical/BMRN, etc. The FDA is currently headed by Acting Commissioner Janet WOODCOCK whose term is expiring on November 15. The FDA has been involved in several recent controversies: Covid-19 vaccines; Aduhelm for Alzheimer; JAK inhibitors for rheumatoid arthritis, ulcerative colitis, atopic dermatitis, etc.
Pg 27: "Adam Kramer.....lead manager of the Fidelity Multi-Asset Income fund (ticker: FMSDX).....His sharp eye for investing opportunities is especially critical now, when the landscape for fixed-income investing feels a bit like a minefield. Interest rates are almost zero. Some investors worry that recent economic-stimulus packages could spark a bond rout if higher inflation follows. (Interest rates rise with inflation, and bond prices move inversely to rates.) But a resurgence of Covid-19 cases could cause the opposite effect—another economic downturn, which would likely drive some lower credit-quality bond issuers into bankruptcy.....In this environment, income-hungry investors need flexibility, and a willingness to go beyond bond-only investments.....institutional share class (FAYZX) of the fund that is run identically but with a slightly lower expense ratio—0.83% versus the retail class’ 0.85%.....Kramer is also a portfolio manager on Fidelity Convertible Securities (FCVSX), Fidelity Preferred Securities & Income (FPFD), and other high-yield and income-oriented stock funds, such as the popular $5.7 billion Fidelity Strategic Dividend & Income (FSDIX)......two co-managers on Multi-Asset Income: Ford O’Neil, who also works with Kramer on the bond-focused Fidelity Strategic Income (FADMX), and Ramona Persaud, who runs the dividend-stock-focused Fidelity Equity-Income (FEQIX)....."
Pg 29: ECONOMY. Where have millions of UNEMPLOYED workers gone? With economy reopening, there is now a huge shortage of workers. WAGES are rising and that may put a big hole into the notion of INFLATION being transitory. Google mobility tracking data show that people are moving around, but just not to work. Many formerly unemployed have become entrepreneurs; many 2-income families with high childcare expenses have become 1-income families with the other one taking household responsibilities; many are busy trading stocks and cryptos; vaccine mandates are backfiring (making antivaxxers quit than comply). Those are guesses.
Pg 30: TECH TRADER. Any decline in BIG TECHS due to negative sales and earnings impacts of semi-chip shortages, supply-chain disruption and shipping problems may be a buying opportunity. These issues are expected to be sorted out gradually. But the impact will be uneven, so be selective. Zoom/ZM all-stock deal for Five9/FIVN fell through because of a selloff in ZM stock. Although FIVN has decided to go alone for now, there may be other bidders. Tech industry M&A will continue strong.
Pg 31: 100 YEARS OF BARRON’S reviews the events prior to the Black Monday, 10/19/1987 (DJIA crashed -22.61% on that day). Although fingers have been pointed to portfolio insurance; Fed rate hikes; unstable forex markets, etc, no one is still sure. A 3-month bear market followed, but no depression, not even a recession, and the market recovered fully in 2 years. So, if we don’t know what caused it, can it happen again?
Pg 32: Noubar ALEYAN (59), Flagship Pioneering (venture capital/creation, private R&D). He was the 1st MIT PhD in biochemical engineering. He has backed/created/operated 70 biotech companies including Moderna/MRNA (cofounder & current Chairman). Flagship now only does in-house R&D funded by private 10-12-year investment pools. It employs 750 and has 32 internal business units. So far, there have been 23 spinoffs and 13 IPOs. He has multiple creative approaches. “LEAPING” involves a leap far away from what is known now and that leads to successes and failures (remember, nothing ventured, nothing gained). “EMERGENT DISCOVERY” is more evolutionary and builds on what is known now to find something new. An example was anellovirus, “good” viruses by its Ring Therapeutics; after all, there are good microbes in our bodies, so why shouldn’t there be good viruses? PROGRAMMABLE molecules/drugs are an important area (Omega Therapeutics/OMGA, Tessera Therapeutics). A new area is PREEMPTIVE MEDICINE (Flagship Lab 77) to deal with diseases before they become detectable. The idea isn’t so far fetched as prediabetes is well-recognized now, so why not pre-cancer or zero-stage cancer? Privately funded companies can look at this sort of crazy stuff that may work (or may not).
Pg 34: OTHER VOICES. Eswar PRASAD, Cornell. New book, The Future of Money: How Digital Revolution is Transforming Currencies and Finance, September 2021. China has banned cryptocurrencies but is adopting blockchain technology and developing its own CBDC digital-yuan. This development is unfortunate. Governments typically worry that cryptos promote illicit domestic and international transactions; are poor vehicles for daily transactions due to their high volatility; are speculative assets that may hurt the general public; and consume huge amounts of energy for processing. It is suggested that crypto advocates work with governments and regulators to devise a workable and acceptable system.
Pg 35: INCOME. Dividend stocks may serve as bond-proxies: CVX, C, NEM.
(EXTRAS from online Friday that didn’t make the weekend paper version)
1st futures-based Bitcoin ETF BITO (ER 0.95%) from ProShares may start trading on Tuesday. It will have complex tax issues. Futures markets may be in contango or backwardation and that will matter for their periodic rolls. Several other futures-based crypto ETFs may be approved soon. There are now special funds with restrictions that hold cryptos (GBTC, BITW), and investors can also hold cryptos at Coinbase/COIN, Robinhood/HOOD, Square/SQ, PayPal/PYPL, etc.
REVIEW. Elon MUSK boasted about his #1 place in Forbes billionaire rankings that put Jeff Bezos at #2 (do most people care about $209 billion vs $192 billion?). With Tesla/TSLA stock doing better than Amazon/AMZON, this petty boasting may go on for a while.
PREVIEW. LITHIUM is hot due to high demand from EVs. But there are only small lithium miners (ALB, LTHM, etc; all up sharply) who may face boom-and-bust cycle as lithium price has fluctuated widely ($6K-25K/metric ton over 5 years).
DATA THIS WEEK. Industrial production, capacity utilization on MONDAY; housing starts on TUESDAY; Fed beige book for 12 districts on WEDNESDAY; existing home sales, Philly Fed diffusion index, LEI on THURSDAY; manufacturing PMI, services PMI on FRIDAY.
www.barrons.com/magazine?mod=BOL_TOPNAV
BULLISH. DELL (looks interesting after the upcoming spinoff of its 81% interest in VMWare/VMW; remaining core-Dell will be in PCs, servers, storage with est yield 2.5%, est fwd P/E 8.4; now, Michael Dell controls 50% and Silver Lake 12% through dual-class structure; pg 14);
small-cap biotech Meira GTx (MGTX; genetics-switches/riboswitches; focus on patents, not on papers; partner JNJ owns 7%; pg 19).
BEARISH. See other stories.
Pg 13: FOLLOWUP. Q3 earnings season started with OK earnings for BIG BANKS; some of the earnings were from the reversals of past loan-loss reserves. Banks have run up already (KBE +32% YTD). Banks are benefitting from IPOs and M&A activity and now the loan demand is rebounding. But big drivers for big banks are not seen.
Pg 13: University ENDOWMENTS did quite well for the year ending on June 30 and venture capital may have played a big role. Can this be repeated? This was after a disappointing decade for alternative investments.
Pg 16: The FDA has several major decisions pending. That will affect Pfizer/PFE, Eli Lilly/LLY, Intra-Cellular/ITCI, BioMarin Pharmaceutical/BMRN, etc. The FDA is currently headed by Acting Commissioner Janet WOODCOCK whose term is expiring on November 15. The FDA has been involved in several recent controversies: Covid-19 vaccines; Aduhelm for Alzheimer; JAK inhibitors for rheumatoid arthritis, ulcerative colitis, atopic dermatitis, etc.
Pg 27: "Adam Kramer.....lead manager of the Fidelity Multi-Asset Income fund (ticker: FMSDX).....His sharp eye for investing opportunities is especially critical now, when the landscape for fixed-income investing feels a bit like a minefield. Interest rates are almost zero. Some investors worry that recent economic-stimulus packages could spark a bond rout if higher inflation follows. (Interest rates rise with inflation, and bond prices move inversely to rates.) But a resurgence of Covid-19 cases could cause the opposite effect—another economic downturn, which would likely drive some lower credit-quality bond issuers into bankruptcy.....In this environment, income-hungry investors need flexibility, and a willingness to go beyond bond-only investments.....institutional share class (FAYZX) of the fund that is run identically but with a slightly lower expense ratio—0.83% versus the retail class’ 0.85%.....Kramer is also a portfolio manager on Fidelity Convertible Securities (FCVSX), Fidelity Preferred Securities & Income (FPFD), and other high-yield and income-oriented stock funds, such as the popular $5.7 billion Fidelity Strategic Dividend & Income (FSDIX)......two co-managers on Multi-Asset Income: Ford O’Neil, who also works with Kramer on the bond-focused Fidelity Strategic Income (FADMX), and Ramona Persaud, who runs the dividend-stock-focused Fidelity Equity-Income (FEQIX)....."
Pg 29: ECONOMY. Where have millions of UNEMPLOYED workers gone? With economy reopening, there is now a huge shortage of workers. WAGES are rising and that may put a big hole into the notion of INFLATION being transitory. Google mobility tracking data show that people are moving around, but just not to work. Many formerly unemployed have become entrepreneurs; many 2-income families with high childcare expenses have become 1-income families with the other one taking household responsibilities; many are busy trading stocks and cryptos; vaccine mandates are backfiring (making antivaxxers quit than comply). Those are guesses.
Pg 30: TECH TRADER. Any decline in BIG TECHS due to negative sales and earnings impacts of semi-chip shortages, supply-chain disruption and shipping problems may be a buying opportunity. These issues are expected to be sorted out gradually. But the impact will be uneven, so be selective. Zoom/ZM all-stock deal for Five9/FIVN fell through because of a selloff in ZM stock. Although FIVN has decided to go alone for now, there may be other bidders. Tech industry M&A will continue strong.
Pg 31: 100 YEARS OF BARRON’S reviews the events prior to the Black Monday, 10/19/1987 (DJIA crashed -22.61% on that day). Although fingers have been pointed to portfolio insurance; Fed rate hikes; unstable forex markets, etc, no one is still sure. A 3-month bear market followed, but no depression, not even a recession, and the market recovered fully in 2 years. So, if we don’t know what caused it, can it happen again?
Pg 32: Noubar ALEYAN (59), Flagship Pioneering (venture capital/creation, private R&D). He was the 1st MIT PhD in biochemical engineering. He has backed/created/operated 70 biotech companies including Moderna/MRNA (cofounder & current Chairman). Flagship now only does in-house R&D funded by private 10-12-year investment pools. It employs 750 and has 32 internal business units. So far, there have been 23 spinoffs and 13 IPOs. He has multiple creative approaches. “LEAPING” involves a leap far away from what is known now and that leads to successes and failures (remember, nothing ventured, nothing gained). “EMERGENT DISCOVERY” is more evolutionary and builds on what is known now to find something new. An example was anellovirus, “good” viruses by its Ring Therapeutics; after all, there are good microbes in our bodies, so why shouldn’t there be good viruses? PROGRAMMABLE molecules/drugs are an important area (Omega Therapeutics/OMGA, Tessera Therapeutics). A new area is PREEMPTIVE MEDICINE (Flagship Lab 77) to deal with diseases before they become detectable. The idea isn’t so far fetched as prediabetes is well-recognized now, so why not pre-cancer or zero-stage cancer? Privately funded companies can look at this sort of crazy stuff that may work (or may not).
Pg 34: OTHER VOICES. Eswar PRASAD, Cornell. New book, The Future of Money: How Digital Revolution is Transforming Currencies and Finance, September 2021. China has banned cryptocurrencies but is adopting blockchain technology and developing its own CBDC digital-yuan. This development is unfortunate. Governments typically worry that cryptos promote illicit domestic and international transactions; are poor vehicles for daily transactions due to their high volatility; are speculative assets that may hurt the general public; and consume huge amounts of energy for processing. It is suggested that crypto advocates work with governments and regulators to devise a workable and acceptable system.
Pg 35: INCOME. Dividend stocks may serve as bond-proxies: CVX, C, NEM.
(EXTRAS from online Friday that didn’t make the weekend paper version)
1st futures-based Bitcoin ETF BITO (ER 0.95%) from ProShares may start trading on Tuesday. It will have complex tax issues. Futures markets may be in contango or backwardation and that will matter for their periodic rolls. Several other futures-based crypto ETFs may be approved soon. There are now special funds with restrictions that hold cryptos (GBTC, BITW), and investors can also hold cryptos at Coinbase/COIN, Robinhood/HOOD, Square/SQ, PayPal/PYPL, etc.