News

November 2020

The European Union Goes After Amazon

November 16, 2020John Banks

A day will come when it makes sense to short the juggernauts: Amazon, Apple, Facebook, and Google. That day is not today, and it may not be here for a while yet. But it will come. As we explained on Aug. 3, the tech juggernauts are trading like a zero-coupon U.S. Treasury substitute. Investors have been reflexively trained to buy Amazon, Apple, Facebook, and Google when little else is working, because the tech giants are seen as impervious to downturns

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Covid Winter is Coming

November 13, 2020John Banks

On March 6, 2020, we wrote in these pages that 80 million Americans were likely to be infected by COVID-19, and that more than 400,000 Americans could die as a result. At that early date, many did not believe it. Many thought it impossible. And yet, here we are. At the time of this writing, more than 242,000 Americans have died since February by official estimates, and the 400,000 threshold looks well within reach. Scientists at the Institute for Health

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Brilliant Billionaires Keep Buying Bitcoin

November 12, 2020John Banks

When smart people look at Bitcoin, they wind up buying it. This seems to be happening with clockwork-like regularity now. It feels like every other week or two, if not every other day or two, some new individual or entity, known for excellence in their domain of expertise, is buying BTC. The latest example of this is Stan Druckenmiller, a retired multi-billionaire hedge fund manager known for having one of the greatest money management track records of all time. While

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The Chinese Government Killed the World’s Largest IPO

November 10, 2020John Banks

Last week, the U.S. presidential election consumed the world’s attention. This week, the potential for a game-changing COVID-19 vaccine dominated headlines and market action. But something else shocking happened last week, an event so surprising — and in some ways so ominous — it would have dominated headlines if not for the stiff competition. The Chinese government killed the world’s largest-ever initial public offering (IPO) at the last minute. On Oct. 28, we explained the details of the largest IPO

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Pfizer Announces a More Than 90% Effective Vaccine Result, and Markets Rejoice to the Skies

November 9, 2020John Banks

Pfizer, the pharma giant, and its research partner, BioNTech, changed the outlook for 2021 — and for the whole world — with a huge announcement this morning (Monday, Nov. 9). Pfizer and BioNTech shared Phase 3 trial results of a COVID-19 blocking vaccine that was effective in more than 90% of patients. The data results are early, and not yet final, but were verified by an independent external committee, and looked promising enough to share. You can read the press

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Bitcoin is a Schelling Point

November 6, 2020John Banks

On Oct. 30, we noted that Bitcoin is outperforming gold. Less than a week later, as the U.S. election week comes to a close, Bitcoin is up another 14% (above $15,500 as of this writing). The latest run higher seems driven by a sudden burst of extreme U.S. dollar weakness — a bullish thing for risk assets in general, and Bitcoin especially. It could also be related to a Department of Justice (DOJ) seizure of 70,000 Bitcoins generated by drug

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The Markets Process Jaw-Dropping Uncertainty as Election Odds Plummet and Soar

November 4, 2020John Banks

If you’ve ever wondered what mind-bending, jaw-dropping uncertainty looks like, this it. The snapshot below, taken at 8:00 a.m. Eastern on Nov. 4, shows a vertigo-inducing swing in betting market odds for who will win the 2020 presidential election. As of election night on Nov. 3, President Trump had roared ahead in the betting odds, thanks to a strong showing in Florida, Ohio, and other key states. But then, in the early morning on Nov. 4, former vice president Joe

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October 2020

A High-Profile Hedge Fund Manager Warns an “Enormous” Tech- Stocks Bubble Has Popped

October 29, 2020John Banks

A high-profile hedge fund manager is warning that an “enormous” bubble in technology stocks has popped. He believes the top was registered on Sept. 2, 2020, that investor sentiment has shifted from “greed” to “complacency,” and that bear-market pain for technology stocks is ahead. Is he right? Possibly, yes. The reasons he cites for calling a tech-stocks top will be familiar to TradeSmith Daily readers, as we have touched on some of them over the past few months. Among those

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The Largest Initial Public Offering (IPO) of All Time, for a Digital Payments Leviathan, is On Deck

October 28, 2020John Banks

Ant Group Co. — the owner of digital payments leviathan Ant Financial, a digital payments firm with 730 million active monthly users in China — is set to complete the largest initial public offering (IPO) of all time by Nov. 5, raising an incredible $34 billion via dual share offerings in Shanghai and Hong Kong. The rise of Ant Financial says a lot about the changing state of the world, the tech-driven chill in an increasingly frigid U.S.-China relationship, and

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The Crypto Adoption Cycle Just Got a PayPal-Powered Nitro Boost

October 23, 2020John Banks

One of the great wealth-building vehicles of the 20th century was the publicly traded retail franchise. There is a reason why retail franchise stocks, when successful, can deliver multi-thousand-percent returns over a long-term holding period. With a great franchise — like, say, a casual restaurant concept, or a new type of clothing store — the initial locations are shown to have a profitable business model that attracts customers. As new locations open up, incoming revenue goes up, which increases the

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The Department of Justice Went After Google — and the Market Shrugged

October 22, 2020John Banks

Did you hear the one about the Department of Justice (DOJ) going after Microsoft? It isn’t a joke, but the stock market seemed to laugh at the news. On Oct. 20, the DOJ announced the largest antitrust lawsuit in decades, officially declaring Google “a monopoly gatekeeper of the internet.” The last antitrust action of this size and scope was launched against Microsoft in 1998 — the same year Google was founded by two Stanford students. In many respects, today’s Google

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The DOJ’s “Cryptocurrency Enforcement Framework” is More Good News for Bitcoin

October 13, 2020John Banks

As a rule of thumb, regulation is good for established players. It helps the strong get stronger and the big get bigger, by making it harder to break into a space. Take data privacy rules around e-commerce and social media, for example. On the one hand, the big players in e-commerce and social media don’t like these rules. They are burdensome, expensive, and add to the cost of doing business. On the other hand, the giants think these rules are

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