fred hickey Profile picture
Editor, The High-Tech Strategist since 1987.
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11 May
You just can't make this stuff up. Now that the "joke' crypto Dogecoin has fallen after hypster Elon Musk failed to lift the price of the "coin" following his SNL appearance, the new hot crypto is Dogecoin's logo called Shiba Inu.…
Shiba Inu became attractive to crypto punters when Dogecoin became too expensive (over 50 cents!) Shiba Inu is much cheaper at the current price of: $0.0000317. There's 395 trillion of these Shiba Inu "coins" in circulation. But you better get in fast: it's up 1807% last 7 days
Shiba Inu millionaires are being minted fast with the "coins" now valued at nearly $14 billion in total. And you can now buy them on the #1 crypto exchange -Binance (per CoinMarketCap). Binance offers up to 125 to 1 leverage for crypto futures trading.
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31 Mar
Currently looking at a chart from this A.M.'s GCRU newsletter. A 54 year chart (1967-2021) comparing gold to real T-bill yields. Shows that during great gold bull mkt decades of 1970s & 2000s it didn't matter if negative rates became less negative due to rising rates. Gold rose
Didn't even matter if "real" rates went slightly positive. As long as they were low, gold still rose. For example, from the summer of 1977 to early 1980 gold skyrocketed as the fed funds rate was lifted from 4.75% to 15%. It was only when Volcker raised to 20% did gold break
GCRU conclusion: "You’ll notice whenever the real yield (in that 54-yr chart) has been over 3-4%, it has put downside pressure on gold. But whenever the real rate
has been below that level, it has been bullish
for gold."
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8 Mar
In mid-2000s I was told(by Bernanke & others) there couldn't possibly be a nat'l housing bubble. But I could see it with my own eyes(& wrote about it). Now I'm told inflation's too low, yet I can see inflation percolating everywhere - from commodity prices…
to foods & now even to energy, to freight rates, to the unprecedented money supply growth (though current M's increases are historic & much lesser money growth has led to inflation before), from anyone producing durable goods, to the "prices paid" ISM reports, to housing prices
J. Powell doesn't even believe U.S. govt's unemployment data (believes they're far too low), so why should anyone believe U.S. govt. inflation data - when we know there's a motive to suppress them - so politicians can keep spending, handing out free money & running up deficits?
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5 Mar
Legendary gold investor, Pierre Lassonde recently said that investment demand sets the ceiling price for gold, but the jewelry market sets the floor price. This is what Bitcoin doesn't have - real physical buyers to take the other side of the speculators.…
Speculators (led by hedge funds) have been pressing gold lower using their levered paper futures contracts (they never touch an ounce of gold) knowing all the technicians' chart sell price levels. Breaking those levels causes "forced" selling. They push "trend" as far as they can
But eventually they run into the "floor" set by real physical gold demand. The gap between the physical prices (where there are great shortages today) and the speculators' much lower paper prices are as great as I've ever seen them - meaning paper pushers are running out of room
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8 Jan
The herd has little interest in precious metals & "value" stocks in general. Too enthralled chasing one-direction bubble symbols such as TSLA, GBTC & ARKK. Repeat of '99-2000. Exact same behavior. Only the symbols have changed. Back then it was the likes of YHOO, WCOM & JDSU
Ending will be the same too. Total collapse in the parabolic blow-off symbols (down 90%+) and huge shift to value stocks & precious metals. In the meantime, with so little trading volume in metals, they're vulnerable to -$25 all-in-a-few minutes smashes in wee hours of night.
From the '99-2000 experience, I know it is pointless to engage in "conversation" with the Bubbleheads. Nothing will make them understand - greed has clouded their minds & they are full of hubris. Let them party on... the higher their symbols fly - the greater the crashes will be
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29 Oct 20
Back in 2011 when gold was selling around today's level, Alamos Gold traded at over $20 a share. Today it's trading at just 8, yet tonight it reported outstanding Q3 results including record cash flow from operations of 33 cents per share (up 62% Y/Y), GAAP EPS of .17 (up 240%)
Alamos reported "adjusted" EPS of .15 per share, up 150% y/y (a big "beat"), hiked its dividend 33% & paid off the remainder ($100M) of its revolving credit line. AGI now has no debt. Better still, its Young-Davidson flagship mine (AGI's biggest producer), was limited in Q3.
Alamos's flagship Young-Davidson (Y/D) mine was severely limited in July as AGI completed a multi-yr expansion that will significantly increase the mine's production & lower its costs. At the midpoint, AGI is forecasting a 42% increase in Y/D's production from Q3.
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27 Oct 20
Microsoft handily beat top & bottom line expectations but following the pattern of last week's tech results("beats" but then stock selloffs), MSFT's stock is off a few points in after hrs. trading. MSFT went into tonight with a 37 P/E & 11.6 times sales.…
MSFT's yr-over-yr revenue growth of 12% in the latest quarter & its forecast of just 8% in current qtr does not justify such high P/E & price/sales multiples it currently has. That's the case with most of the FANG & cloud stocks - so post-EPS selloffs trend may continue this week
During the 1999-2000 tech bubble, it was the same problem as today. "Investors" paid any price for great "stories." They neglected to think about valuation. But eventually that mistake caught up with them & all tech stocks collapsed -no matter how bright their futures would be
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19 Dec 19
So Micron CEO Sanjay Mehrota is calling "the bottom" (again). On Dec. 19, 2018 (exactly 1 yr ago) Mehrota stated Micron was just suffering from a short-term "air pocket" (untrue), the 2nd half of the calendar yr. would be "improved" (it got much worse), the inventory buildup...
would be cleared up "within a couple of quarters" (didn't happen -MU's inventories were up 28% from Dec. 2018 & according to Morgan Stanley (today) Micron's "customers are now also holding inventory, which wasn't a factor six months ago,as Micron again highlighted...(Continued)
inventory builds in China,and our checks show proactive inventory builds from cloud customers as well." Mehrota in December 2018 claimed customer demand was "vibrant" (again untrue as MU's revenues plummeted all year long). So why the heck would ANYONE believe ANYTHING he says?
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16 Oct 19
Had interesting discussions today including with one who'd been in "the belly of the beast" (shadow banking system). I'm convinced the Fed's surprise $60B a month QE program(while everyone was focused on the Trump/China show Friday) is to combat an evolving shadow banking crisis
Shadow banking - the land of little oversight, leveraged loans, covenant-lites, leverage on leverage, investments in zombie cos. & now much lower valued Unicorns, has seen the exit door (IPO market) shut and the WeWork types implode. Bank loans that can be called bi-weekly.
Also interesting is (coincidental?) timing of WeWorks' world implosion & money market/repo interest rate crisis that doesn't seem to be getting much better. $75B in repos today, despite fact that quarter end has passed as did the Sept 15 corp. tax payments.
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23 Apr 19
I know all the "price action" momentum monkeys won't care, but AVX, a nearly $2 billion electronic/semiconductor component supplier to a broad amount of end markets had a little different outlook on the world today. AVX's stock down 5.5% after hitting a 7-month high yesterday
AVX CEO: "The worldwide economy continues to be in turmoil after peaking in early 2018.The global purchasing Index consistently dropped through the yr as we approach the crucial 50 point crossover mark.Major manufacturing regions like China did fall below 50 and into contraction"
AVX CEO continued: "In calendar quarter one, 2019, the global manufacturing index has shown a slight uptick." Notice the word SLIGHT. AVX inventories continued to soar, up 22% Y/Y to $632M as AVX cut current qtr revenue guidance to a 1%-2% Y/Y decline. AVX book-bill ratio: 0.94
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21 Aug 18
WSJ headline this AM - "U.S. Stocks poised to Enter Longest Bull Market" Might be time to reflect back on just how negative people were on March 9, 2009 "CNN/Money "Special Report issue #1: America's Money Crisis" headline:"For Dow, another 12-year low"…
From the March 9, 2009 (stock mkt bottom) CNN story: "We're seeing more of the same," said John Buckingham, chief investment officer at Al Frank Asset Management. "With an absence of good news, the path of least resistance is down." "every rally attempt is being met with selling"
Nathan Mayer Rothschild reportedly coined the maxim:"Buy on the sound of cannons,sell on the sound of trumpets." With all these "longest bull market record" stories - anyone hearing the trumpets? No one can seem to see or hear the sound of Fed rate hikes &QT tightening(deaf&dumb)
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16 Aug 18
The badly lagging SOX index (semiconductors) fell again today, even with DJIA up nearly 400 points.Tomorrow SOX will have further trouble following 2 major semiconductor disappointments tonight - Nvidia & Applied Materials. NVDA guided lower citing crypto biz(gee what a surprise)
Getting hard to justify NVDA's mega $156B market cap (14x sales) when yr-over-yr revenue growth sinks from 66% in Q1 to 40% in Q2 to just 23% in Q3 (NVDA forecast). On other hand with 3% sequential revenue decline accts receivables soared & DSOs jumped from 35 to 48(big red flag)
NVDA's inventories jumped 37% sequentially to $1.1B (on 3% revenue decline & a weaker forecast for next qtr.)Days sales of inventory jumped from 64 to 86 days seq. Free cash flow plunged 41% seq. NVDA joins several other tech faves(FB, NFLX,INTC,AVGO,MU) that have lost their mojo
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16 Aug 18
Response tonight to smart guy's question to me. Sees "no floor" for gold& "Doesn't know what to think." Me:You should think we live in a warped world (thanks Fed)where government debts are out of control, debasement is the cure and 20-yr old dweebs can program their computers...
to take correlations(erroneously)to extremes(using huge amounts of leverage).Fed "normalization" will not work(as is the assumption).It's already blowing up the "delusive" objects - first cryptos, then emerging markets, now spreading into other parts of world (global stocks down)
No floor? - that's always the cry near major bottoms. I have cash at the ready - I'll end up making money on this panic. Just looking for signs of bottom (example: big reversal). Huge GDX volume 2day (biggest of yr.). Hopefully more panic tomorrow - maybe then we'll get the turn
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29 Jul 18
That $2.3B Vanguard Precious Metals&Mining Fund was more than a name change(to Global Capital Cycles Fund). Mining stocks (mostly gold stocks) as % of fund drops from 80% to 25%. May explain why big-cap precious metals stocks have been oddly underperforming smaller names (more)
Last week GDX fell 2.11%, but GDXJ dropped just 0.53% (a 4X difference), yet there weren't any outflows from GDX. For July month-to-date GDX shares outstanding have RISEN 5% from June. But the six largest positions in the Vanguard Precious Metals & Mining Fund were all gold stks
The largest position in the fund was Agnico-Eagle (AEM). AEM's stock was pounded 9.1% last week, yet outside the squirrely tax rate of 88% in Q2,which was the primary cause of the bottom line "miss" (the tax rate will "normalize" for rest of yr),AEM topped revenue estimates(more)
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21 Jun 18
Dow Industrials down 7 consecutive days & futures point to another down open while FANG-driven Nasdaq continues to hit records. Dow 2000 points down from late-Jan. peak (S&P peak too). My May 4 newsletter subsection title: "In the First Phase of the Bear, Tech Investors Rotate"
From that section: "Since most tech investors in the first phase of the bear are not anywhere near ready to abandon tech stocks(that will come later), they'll do what they've done in the past...rotate into the "invincible" tech stars." Happened in 1990,2000 & 2007(prior 3 bears)
Since the "invincible" tech stars continue to hit records, few notice the broad deterioration in overall stock mkt. The bulls don't see they're already several months into a bear market - this time driven by the obvious catalysts of higher interest rates, QT, & a global trade war
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