I was wrong.

@CathieDWood is right.

Nvidia is a bubble, like Cisco.

The Apple Vision Pro will be a smashing success.

A recession is coming. It will start with a ‘credit event’

Inflation and interest rates will be lower for shorter.

60/40 is the future. Always was…

Trust whatever Goldman Sachs, Morgan Stanley, and JP Morgan call research.

Especially their conviction buys.

Tesla will be the most valuable company globally and dominate the EV market.

Cybersecurity investment is a fad.

Crypto is a scam.

The SEC has provided crystal clear regulations, firms should just go in and register.

SoFi will transform banking. Credit losses will be ‘contained’ because management said so.

X offers massive alpha. Just buy Snowflake and Palantir.

SoFi007girl is a real person and has genuine feelings for abstract corporate entities.

Stay single. You can get an AI girlfriend or boyfriend, and build a family in the metaverse.

Centralized power works. We just need enlightened leaders that are incorruptible and know better.

Tech firms should not be permitted to compete with JP Morgan and other big banks.

They can’t built banking apps or serve tens of millions of people without a branch network.

The future is in 3D printing and seed oil based meats.

The United States isn’t growing any more. Invest in Europe.

China will eclipse the United States. Robots will replace China’s shrinking population.

The SEC under Chair Gensler is neither capricious nor arbitrary.

There is nothing to learn from Buffett except his dietary choices: diet coke & burgers.

Investing in pre-revenue AI startups with $1 Bn+ valuations is a good idea.

The BRICs will create a currency that replaces the USD.

The peak for humanity was when Prince released ‘We’re going to party like its 1999’

We don’t need more nuclear energy. We need to reduce our energy demands.

Modern Monetary Theory (MMT) represents our best science.

We do not live in a simulation.

Stay Consensus. @CathieDWood 2/ Governments bonds are a store of value.

You can park your hard earned wealth in bonds and preserve your purchasing power.

1/ Genesis Plan:

To Vote Yes, or Not, That is the Question

Here's my take on the Genesis Bankrtuptcy plan...

🧵 2/ Disclosure: I am not a lawyer, and I am not your advisor.

I am not a party to the dispute and have no commercial or customer relationship with Genesis, Gemini, or DCG.

You should retain legal counsel and an advisor to work thru this complex plan.

The @lumidawealth Top Ten List

While everyone was busy making '2024 Surprise Lists', we were feverishly researching and implementing ideas.

Goldman has an allocation to Apple and Tesla in their model portfolio. Apple is a 'Conviction Buy'

I've been consistent that this is a bad idea - and at the recent Apple highs said this is the time to get out.

Take a look at Apple and Tesla now.

I am long Google and Meta and short Apple and Tesla as part of my portfolio hedge.

Meanwhile, Google *closed up* yesterday.

Search for my post "LTEG" where I cycle thru the Mag 7 names one-by-one. Or better yet, subscribe to the @LumidaWealth newsletter.

1. Tech is prone for correction and underweight.

Everyone went bullish, we went to the other side of the boat.

Check.

2. Buy energy, it's a hedge for tech. Check

3. Don't own bonds at 3.8% - rates headed up now. Check

4. SoFi is a short. Check.

5. Buy Hersheys. Check.

6. Overweight Google. Check.

7. Underweight Apple (or short it). Check.

8. Underweight Tsla (or short it). Check

9. Rotate into Ethereum. ETH outperformed BTC and SOL. Check.

10. Tidewater, Beyond Meat, Palantir, The Trade Desk all over-valued and headed down.

Check, Check, Check, Check.

11. Healthcare - buy Elevance. Check.

12. Nvidia will outperform ASML and AVGO (short term).

Nvidia was the best performing semincondcuctor yesterday.

Check.
2/ December 25th - "I do think tech stocks are overbought - market has 2 weeks left give or take"

https://x.com/ramahluwalia/status/1739481285746164093?s=20

Non-Consensus View:

The visit of China’s premier js a symbolic bending of the knee.

China is capitulating.

@balajis is not reading this correctly

Why? China is hurting.

- China’s currency is under pressure as capital leaves at the fastest rate in 7 years

- FDI is down to 1998 levels

- Exports are down significantly due to friend-shoring

- Semiconductor export controls are not yet throttling China…but they have come up to the line

- China’s Ali Baba and tech leadership cannot get their hands on advanced GPU chips

- China’s birth rate continues a decline that spells industrial mediocrity

Why visit California?

And meet a ‘Provincial Governor’?

California is the state whose IP is most at risk of corporate espionage.

And China needs US semiconductor designs.

What about US Bonds?

Sec’y Yellen has ‘intensified’ talks with her finance counterpart.

The US needs to sell bonds at better rates. The US can then also import from China.

The capital account and current account worked together beautifully for decades.

And Semiconductors?

China imports more semis than Oil.

And the US is controlling exports, but not killing GPU exports. That would be the next escalation - it’s a clear threat.

China is pouring more money into semiconductor startups than the US.

But the US and Taiwan have the technical leadership and edge… too little too late.

China and US Relations?

Visits don’t often happen without some news announcements - trade deals, understandings, or a rapprochement.

Engagement is constructive.

They are bargaining on American soil.

The China Premier is making Nixon’s trip to China many decades ago a complete circle.

The symbolism is thick and my have substance. 2/ China has youth unemployment of 20%.

It’s so bad they stopped reporting.

The bargain between China leadership & its public is fraying.

https://twitter.com/ramahluwalia/status/1678889762747297792

SoFi bulls miss a few points.

Let's cut to the heart of the matter - SoFi is a personal loan business.

It relies on capital markets for cashflow. That presents a structural flaw to the business model.

When a recession ultimately arrives, the losses will hit SoFi in 3 ways
🧵 2/ SoFi loses about ~$9 Bn in negative Cash Flow from Operations each year.

This is also why Adjusted Ebitda numbers are deceiving.

Investment legend Byron Wien passed away.

I never met him.

Still, after reading his pieces over many years I do feel a sadness for the loss of someone who was witty, provocative and non-consensus.

Read below his list of 20 life lessons.

Legend. pws.blackstone.com/education-insi… The hard way is always the right way. Never take shortcuts, except when driving home from the Hamptons. Shortcuts can be construed as sloppiness, a career killer.

1/ NY Attorney General vs. DCG @BarrySilbert:

FTX was worse than Madoff.

And, DCG was worse than Enron.

This thread will show how.

And why the NYAG's request will force a sale of Grayscale. 2/ The Enron fraud involved the use of off-balance sheet special purpose entities (SPEs) to hide debt and inflate profits.

Enron executives engaged in self-dealing transactions.

The NYAG alleges DCG did both of these...and more.

Time to Shame the IPO Underwriters:

We can add Birkenstock to the list of failed IPOs this season.

The stock opened at $41 per share after being priced at $46 per share.

The stock slipped 21% in the first week of trading.

That's the worst IPO performance in 2 years.

The CEO of LVMH had these words: "The reaction is more a reflection of the pricing than it is the quality of the stock".

Here's who the Lead Underwriters were:

Birkenstock: Goldman Sachs, JP Morgan, and Morgan Stanley

ARM: Goldman Sachs, JP Morgan, and Barclays

Instacart: Goldman Sachs, JP Morgan

Klaviyo: Goldman Sachs, Morgan Stanley, and Citigroup

There are obvious conflicts of interest when an investment bank raises capital, and at the same time sells those shares to its own wealth mangement clientele, and then writes a research report.

Remember that Morgan Stanley $400 price target on Tesla issued not too long ago?

Wake up folks.

https://twitter.com/ramahluwalia/status/1715386636232429851

Here's the Morgan Stanley report on Tesla.

Tesla's been heading to $200 rather than $400 since then.

https://x.com/ramahluwalia/status/1714817450015961337?s=20

Non-Consensus:

Why is it so fashionable to predict the decline of the US?

Hard disagree with @Noahpinion and @balajis

Let’s break it down by category.

1) Technology leadership: US dominates

2) Military: US dominates

3) Banking: US has 4 of the Top 10 banks.

China has 4 of the Top 10 banks.

>> This is the one source of vulnerability, but it’s the US prize to lose.

JP Morgan is now expanding to the UK…

Blackstone is in China…

>> True, China’s banks are ahead on cashless society

4) Demographics: Younger and wider base than China, Russia, Europe.

The US still ‘imports’ the best brains from China, Russia, and India.

5) Culture of Entrepreneurship: The US has multiple venture/angel ecosystems and the most advanced capital markets.

China meanwhile is silencing erstwhile heroes like Jack Ma.

Sergey Brin left Russia for the United States.

6) Capital Flows: Chinese millionaires and Russian oligarchs want to flee with their capital and secure their funds in American banks

7) China’s growth rate is faltering.

The constraint on US growth is not capital nor investment opportunity - it’s hungry for workers of all skill levels.

8) Advance Technical Education:

CalTech, MIT, Stanford, CMU, IAS

9) Biotechnology

90% of new IP originates in the United States. (The exceptions are Astra Zeneca and Novo Nordisk)

It’s not a competition.

Are there issues?

Plenty (fiscal imbalances, public education, immigration, student debt, digital asset policy, banking policy, credibility in institutions, etc).

BUT, the issues other countries face are far more severe.

The default in rival countries is censorship, corruption, and no exit.

*Any other country would gladly trade their position for the US*

Side Note: There is an ‘edge’ for small ‘city-states’: Singapore, Dubai and Finland

It’s easier practically to unify, govern, specialize and root out corruption.

https://twitter.com/noahpinion/status/1710748177731920369

China’s entrepreneurs are incredible.

They are insanely hungry. They sleep at work. They are smart. They are humble.

I have a lot of admiration and respect for Jack Ma.

And yet the CCP views Jack Ma as a threat to their power rather than a symbol of entrepreneurship.

Great countries rest on a foundation of markets, entrepreneurship, rule of law, innovation, and property rights.

There’s no close second to the United States.

Michael Lewis is a great storyteller.

But he delivers narratives rather than true understanding.

FTX was a money losing business.

That led to fraud.

FTX was getting arbed by their own clients.

An exchange can withstand *any* run on the bank because deposits are never rehypothecated.

https://twitter.com/smtuffy/status/1708634686929375282

This thread explains the nature of how FTX was a money loser 👇

https://twitter.com/ramahluwalia/status/1599573699375828992

1/ The Future is Tokenized Culture

Franklin Templeton’s Jenny Johnson nails it at CNBC ‘Delivering Alpha’.

- Tokenization = Securitization on Steroids

- Tokenization of Cultural IP via NFT Royalty Streams.

Rhianna is creating modern era ‘Bowie Bonds’ for fans that can consume, promote and share in the upside.

>> Athletes, Creators, and their Fans is the fastest path to digital asset adoption.

Why? Cultural Relevance

Compilation of my Tokenization Threads 👇
2/ My thread on David Bowie bonds on-chain

Rhianna is leading the way. We need updated Crowdfunding frameworks to truly unlock the magic

x.com/ramahluwalia/s…

Serious Question: What Will Be the Legacy of SEC Chair Gensler?

We are only now grasping the consequences.

1) **Death of Chevron Doctrine**: Under Chair Gensler's watch, the SEC's waning court victories have diluted the deference usually afforded to the agency's interpretations of ambiguous laws. The doctrine's erosion suggests that future SEC actions will face higher judicial scrutiny.

2) **Shift Toward Congressional Authority**: As the SEC loses in multiple districts, courts increasingly look to Congress for definitive guidance on ambiguous matters. This redirects the source of financial regulation authority from the SEC to Congress. (Major Questions Doctrine in ascent.)

3) **Redefining Investment and Commodities**: Legal precedent is evolving. One court's ruling that 'speculation' doesn't qualify as an investment if it lacks common enterprise undermines traditional securities definitions. Combine that with the Ripple ruling (the manner of sale matters in determining whether something is a security) and you have a stronger CFTC and a proliferation of Digital Asset commodities.

4) **Questioning Regulation by Enforcement**: Courts have deemed the SEC's approach to regulation via enforcement as ‘capricious and arbitrary’. Future SEC Chairs, are likely to abandon that unsuccessful strategy.

5) **Increased Litigation**: With the SEC's interpretive guidance holding less weight, we could see a surge in litigation as market participants challenge the agency's authority more aggressively.

6) **Legitimacy Questions for Previous Cases**: If the recent court losses call into question the SEC's interpretive authority, there may be grounds to reexamine past enforcement actions, leading to potential appeals or even reversals.

The sum total of these consequences points to a future where both the SEC and the financial markets it regulates navigate a landscape of greater complexity and uncertainty.

The legacy of SEC Chair Gensler, thus, risks being one that complicates rather than clarifies the rules of the game.

The Chair’s strategies have inadvertently weakened the SEC's legal and enforcement frameworks.

In retrospect, issuing Interpretive Guidance, responding to requests for rule making, or working out a framework with Congress would have been better.

The damage to public confidence, enforcement bite, and the SEC’s reputation as an institution appears significant.

A new SEC Chair and Congressional action seems inevitable to repair the damage. It turns out longest serving bipartisan SEC Chair @ArthurLevitt was correct: "‘Crypto will be part of the American financial scene sooner than later.’"

x.com/ramahluwalia/s…

1/ Why is Apple down 3% on earnings. Here's why

- Iphone sales down
- Mac sales down
- Ipad sales down
- Wearables, home and services revenues up

In short Hardware down, services up, no AI capex

My Take: Apple is going from a Growth to a Value Stock. Where to grow next 🧵 2/ On AI: "We view AI and machine learning as core fundamental technologies that are integral to virtually every product that we build"

>> Incremental improvements in personal voice, live voicemail, fall detection. I respect that Apple did not blow billions on Capex/Nvidia chips

1/ Coinbase Q2'23 earnings breakdown.

The stock was up 6% in the after market initially but now slightly down.

Still, COIN is up 160% for the year outpacing the S&P.

Here's what you need to know 🧵 2/ Coinbase stayed on message from last quarter focusing on:
- sustainable long-term growth, expense mgmt
- their role updating the financial system'
- new products, finanical innovation
- balance sheet strength (now $5.5 Bn in liquidity)

1/ If I had a choice between owning Stripe at 50% off last round, or I'd go with JPM.

Why? It generates 25% Return on Capital *at scale* and is too big too fail.

Let's dig in. Profits up 67%.

Without the First Republic profits would be up 40%.

Long: JPM

🧵🧵 2/ What's impressive about JPM is that it posts big growth numbers and it's already the biggest bank in the United States.

Revenue rose 34% from a year earlier to $41.31 billion. It's hard to conceptualize that scale.

How many startups can pull off that growth on that base?

1/ There are real gems on the future of AI in this Marc Andreeson (@pmarca) interview with @lexfridman.

Marc is like GPT-8 (on an 8 point scale), so I recommend tuning in to test against your own mental models.

If you're interested in AI, it's a must listen. 2/ Marc is squarely in the 'We can't get AI fast enough' camp in contrast to @tegmark. He reminds folks that limiting AI limits human progress.

>> My loose armchair theory is that we are OK if dealing with feed-forward nets rather than recurring feedback nets (self-awareness)

1/ Larry Fink just spoke with @CGasparino on Fox Business.

Topics:
- Bitcoin ETF
- Crypto & Disintermediation
- Inflation and Rate outlook
- Banks & CRE

All of our favorite topics :)

Here's a breakdown & rapid reactions🧵 2/ BlackRock's Win-Loss record on ETF applications is 575:1.

Note: The thread below background on the BlackRock ETF and a walkthru of the S-1 filing and other dynamics

https://twitter.com/ramahluwalia/status/1670841423602626560?s=20

1/ EDX Markets, a non-custodial exchange, went live today.

That sounds like a contradiction right?

Here's background on EDX and initial thoughts. 2/ EDX Markets is a non-custodial cryptocurrency exchange that launched in 2022.

EDX is backed by Citadel Securities, Fidelity Investments, and Charles Schwab, Virtu and others​​.

1/ Markets are down and the Vix is...down.

Why is the Vix sub-14? And what is the Vix?

Debrief from my convo with a equity volatility options trader.

What happens from here?

Charts below.

#VIX #volatility #nvidia 2/ Vix closed at 13.5 today.

The VIX, or Volatility Index, is a measure of expected price fluctuations in the S&P 500 Index options over the next 30 days.

It is often referred to as the "fear index" or "fear gauge" because it represents the market's expectation of volatility.

1/ I went thru the BlackRock Bitcoin ETF S-1 filing.

There are novel elements to the BlackRock application.

This covers the background and what the main open questions are to asses likelihood of approval.

🧵 2/ First some perspective - The iShares Bitcoin Trust filing is at least the 28th attempt at launching a spot Bitcoin ETF in the US, and we believe BlackRock is the 20th company to file.

(Source: Bloomberg @JSeyff @EricBalchunas kudos for excellent reporting!)

1/ Takeaways from Stanley Drunckenmiller Bloomberg Invest interview with @sonalibasak

"I've never had a down year, but I'm not sure I've made money in shorts."

- History of Bubbles
- Bearish on Macro, Bullish on AI
- Nvidia talk $NVDA
- Shoes to Drop 2/ Entitlements are a 'pig in the python'

The Baby Boomers are becoming seniors.

People are living longer. Social security, medicare, medicaid are taking a larger share of gov't spending.

>>Expect higher interest rates for longer.