Videos
January 29, 2024 | Daily JAM, F, GM, Mid Term, TSLA, Videos |
Today’s Trend of the Week video is Bad News from Tesla is even worse news for other electric vehicle companies. On January 24, after the close, Tesla announced a slight miss on their earnings report. Guidance was rather sparse but grim. Sales grew at about 38% in 2023, well below the 50% target that Tesla regularly touts. The 2024 guidance is even below that, (Wall Street estimates 24%). While this isn’t great for Tesla, it’s much worse for companies like Ford, GM and Volkswagen who are trying to figure out how much to spend and when to build market share for electric vehicles. The companies have been using estimates based on Tesla likely prices and profit margins in order to build their own projectors for their own profitability in electric vehicles. Those estimates, thanks to recent guidance from Tesla, appear to badly outdated, especially if Tesla is considering cutting prices again. Now companies like GM and Ford will have to decide how much pain, and for how long, they’re willing to take in order to get into this market.
January 28, 2024 | Daily JAM, Videos |
Today’s Quick Pick is ASML Holding (ASML). ASML Holding is a chip equipment maker, specializing in high-end ultraviolet lithography. The stock released an impressive earnings report on Tuesday which sent the stock up 8.5% on that day. It’s up about 18% since I recommended the stock back in December. However, please remember, chip stocks and especially chip equipment stocks are cyclicals. They do well when demand is high, and then dip back down when demand is low. We’re currently in a big up cycle for chips with demand for new AI chips continuing to rise. ASML expects 2024 to maintain that upward swing and the stock is rising as expected. The thing I want to point out is how we know cyclical PEs to behave. The highest point for a cyclical PE tends to be down at the bottom, and as the stock goes up, the PE should go down. At the moment, the market is not at all focused on fundamentals and what we’re seeing is cyclical stocks trading like growth stocks. ASML is not a growth (forever) stock, but it’s currently trading at a PE of 39, the same as Microsoft, a definite growth stock (for comparison). There will be a top for ASML, it may not be 2024 but make sure you’re looking at fundamentals even if no one else in the market is.
January 25, 2024 | Daily JAM, Mid Term, Videos |
Today’s video is Too Far, Too Fast. Yesterday, on January 24, the market hit Wall Street’s consensus 2024 target for the end of 2024. Yep, a bit early. The consensus target for the end of the year 2024 close is an average of 4867 and yesterday the S&P closed at 4868. The median target is 4950, and the high end forecast is around 5200–only 350 points from where we are. We’re still awaiting confirmation that the Fed will cut rates and when that happens (likely in June or July–not March), more money will come into the market. This mid-year injection of money is good, but how much of a reward is there in a market that may have already reached its target for 11 months from now? At this point, investors are chasing momentum in an attempt to make up for missing the mark in 2023. That leaves the market risky at the moment. There’s not a whole lot of reward in a market that moves sideways with very few big moves on the up side. We may very well finish the year flat from these levels.
January 21, 2024 | Daily JAM, Videos |
Today’s stock pick of the week is Merck, (MRK). Merck’s “problem” is that one of its biggest revenue streams comes from Keytruda, an oncology drug that will be going off-patent in 2028. In 2023, Merck projected new oncology drugs would bring in an additional $10 billion to replace Keytruda’s revenue. At this year’s JPMorgan healthcare conference, the company’s projection was even higher at $20 billion by the 2030s.
January 18, 2024 | Daily JAM, Morning Briefing, Videos |
Today’s video is Exogenous Factors: Middle East and Taiwan. The market has been focused on earnings and the Fed as of late, but, there are a lot of big exogenous factors that should also be on the radar. Two of those factors are Taiwan and the Middle East.
January 18, 2024 | Daily JAM, Videos |
I’m back! It’s been a long hiatus since I moved to Venice in September (yes, Italy, and not California or Florida) but I’m back and I’ll be resuming my videos from here on out. Today’s video is: Will We Have a Santa Claus Rally Hangover in January?
September 1, 2023 | Daily JAM, Videos |
Today’s video is Once Again, The U.S. is The Only Market Game in Town. It’s hard to grasp the longer-term trend in any August because, frequently, there isn’t one. True again this year. The S&P is essentially where it was a year ago and it’s especially difficult right now to tell how the market should be priced as, once again, it looks like the U.S. is the only game in town. There are uncertainties about the U.S. economy, with the Fed continuing to raise rates and signs of consumers starting to waver. However, these uncertainties are not nearly as bad as a near-consumer strike in China and a slow-moving European economy. Because money is flowing into the U.S. market from those alternatives, it’s unclear how to calculate a current fair value for U.S. stocks. Stocks like Microsoft, Apple, and Nvidia are all at record highs. Should they correct from here or move higher on the relative fundamentals? The question boils down to this: Do you get in on the only game in town, even though it is very expensive, or do you wait it for a shift in market cycles? After the Fed’s September 20 meeting, where they’ll set expectations for the future, investors should have a better idea on how to answer this question.
August 31, 2023 | Daily JAM, LNG, Videos |
Today’s Quick Pick is Cheniere Energy (LNG). There are a number of positive trends for Cheniere right now. The company is adding to its liquid national gas production capacity and has signed long-term contracts with Equinor, Korea Southern Power, China ENN National Gas, and BASF. This is on top of a big increase in sales and margins in its most recent report. (Year to date the stock is up about 10%.) Another factor that makes this a “buy now” stock is that Australia will likely see a liquid natural gas strike. Workers at Woodside Energy have already voted to strike if there’s no contract and Chevron workers look like they may follow suit. These strikes could happen as soon as September, so now is the time to add shares in LNG, as Australia accounts for about 10% of global LNG supply. Morningstar calculates that the shares are at a 2% premium. I think we can expect more upward bumps for LNG and as much as it pains me to accept, I think liquid natural gas will be a necessary global energy transition fuel. I own this stock in my online portfolios.
August 24, 2023 | Daily JAM, Videos |
Today’s video is: Stay Away From China for a While. China is looking at a long-term downward trend in the price of Chinese stocks. The iShares MSCI China ETF is down 8.1% year to date. It was down nearly 23% in 2022 and around 22% in 2021. What’s causing this? China has a long-term demographic problem. You’ll see occasional spikes in stock prices whenever the government puts money into the economy, but those spikes disappear after it becomes evident that putting more money into the system isn’t enough to fix it. In the long term, China is going through some extreme demographic changes. Last year, China’s population fell for the first time since 1961 and the United Nations predicts that China’s population will go from 1.4 billion now to 800 million by the end of this century. This is because fewer couples are deciding to have children, and the one-child policy led to a scarcity of females in the population. The younger generation is highly educated but unable to find jobs, which has led to negative sentiment on the economy and sluggish consumer spending. China’s economic policy has been based on high-tech industrialization and a dampening of consumer spending in an effort to provide the capital needed to support its industrialization. This model works for a while but inevitably hits a wall because the things you produce need somewhere to go. For a long time, China exported most of its goods, but many countries, like the United States, have pivoted to policies designed to increase domestic production. China looks to have hit the middle income economy wall, like a lot of industrializing countries before it.
August 23, 2023 | Daily JAM, Short Term, Videos |
Today’s Trend of the Week is Watch Nvidia. NVIDIA (NASDAQ) reports earnings today, August 23. The consensus is that the company will report $1.69 a share, up from last year’s $0.32. And that revenue growth will come in with 65% growth.
This stock has been one of the big gainers this year and has effectively led the market. The shares recently hit a bit of a plateau until Monday, when the stock popped 8% on earnings optimism. The stock trades at a trailing PE of 238 but the big earnings jump should help with that. So what do you do with this stock that is leading the market, but is also known to be overpriced and therefore somewhat risky? You go with the momentum. Follow the market to see if investors start to sell and take profits after earnings, or if people continue to buy, even at a high price, with hopes for even greater gains. This will be an indicator of how momentum in the market is going, especially for the booming AI sector.
August 22, 2023 | Daily JAM, Videos |
Today’s Trend of the Week is What’s the Story? What is happening with the market? Retail numbers are up but stocks are down. Wall Street was expecting a 0.4% growth in retail from June to July, and we got .7%. While big-ticket items like furniture, electronics, and appliances remained down, e-commerce sales were up 1.9%, and consumers seem to be spending money on things like dining out. Retail numbers were much better than expected, so why did stocks go down? At the time of filming (August 15), the S&P 500 and Nasdaq Composite were both down nearly 1%. Part of the reason we’re seeing the market go down, I think, is because money is going into bonds, instead of stocks. The U.S. economy is doing markedly better than the overall international economy, and people are looking to buy Treasuries. The yield on the 10-year treasury went up to 4.27 on August 15 and real yields, (yield minus inflation), are near a 14-year high. The expectation is that inflation will continue to moderate, but the Fed will likely not be cutting rates any time soon. As more money goes toward treasuries, less money is available in the market to buy stocks.
August 19, 2023 | Daily JAM, Jubak Picks, Top 50 Stocks, Videos |
Today’s Quick Pick is Eli Lilly And Co (LLY). Lilly is my favorite big drug stock right now. The company recently announced second-quarter earnings and showed 22% year-over-year sales growth. The company has a promising pipeline of new drugs. Mounjaro, Lilly’s diabetes drug, is likely to get weight-loss approval from the FDA. They also have new products for Alzheimers, and Cardio Metabolic drugs coming out soon. The growing enthusiasm for diabetes and weight-loss drugs has the stock overvalued by about 46% according to Morningstar. Their competitors are in similar situations. Novo Nordisk (NVO) is 28% overvalued according to Morningstar. At this point, if you’re looking for somewhere to immediately put some money to work, I’d still go with Eli Lilly. In this case, you have to consider not just the absolute valuation but also weigh the prospects of both companies. In my opinion, Eli Lilly outshines Novo Nordisk if you look at the pipelines at the two companies
