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The š„H.E.A.T.š„ Formula
AI Driven Insights to Spark Your Portfolio
The H.E.A.T. Formula is a radically different way to look at investing your portfolio.
āH- Hedges, you should always have hedges and be agnostic as to being long or short. Bonds are not a hedge
āE-Edges, you should always look for edges. Preferably these are edges with some sort of psychological underpinning, structural edges, or some sort of barrier to entry.
āA-Asymmetric. Everything you do, be it trades or your overall portfolio, should be designed so that heads you win a lot, tails you lose a little.
āT-Themes. You should always be invested in the top themes. Most everything else is just noise.
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Rebel Finance Podcast
Market Recap
Another ugly day. Kind of knew when I woke up and saw Bitcoin with an 8 handle it was going to be an up hill battle for the bulls. Green morning all around, but that could change in a hurry and we have NVDA earnings tonight.
Following FinTwit and a few discords you would think we were in a bear market, but SPY is not far from the all time highsā¦.
Under the 50 day itās still a short, and looks like a double top to boot.
The real reason for the panic is that all the juiced up growth names have gotten crushed. They were a bubble in search of a pin, and that pin was first DeepSeek, then MSFT rumors, and possible new Covid, and weaker economy, etc.
Popular momentum trades like Palantir and AppLovin are unraveling. Donāt expect them to bounce right back.-MarketWatch
I agree about not bouncing right back, but they will bounce back. Retail traders have changed the market, theyāve gotten crushed the past couple of days, but they will be back in these names in force and ride them up again.
Again, when growth names get hammered my go to short (puts) is ARKK, way more bang for your buckā¦..
TLT continues to be the strengthā¦..
The market is pricing in 50bps of easing and it looks like bond traders are playing along. Canāt imagine they raise rates during the next 4 years so you have somewhat of a floor on this trade. Seems like Bessent is squarely focused on brining rates down.
Consumer staples are also the strength on the stock side, not bullish to have these guys be the leaders unfortunately. I would also stay away from the packaged food companies as I think Bobby could give them a hard timeā¦
Bottom line, the narrative is clearly risk off at the moment and nothing will likely happen intraday to change that ahead of NVDA earnings. Speaking of NVDA, they have massive expectations to beat tonight. I think NVDA is the future, everything we are doing in computing relies on their GPUs, but maybe not at these valuations. I continue to believe if you are a buy and hold investor that NVDA is a must own, but at some point it will come down and thatās when you back up the truck. For traders, it did have an undercut and rally at the 200 day yesterday that could have been buyable, which I would not do ahead of earningsā¦ā¦.
One Mag 7 name I did add to yesterday was GOOGL, which also had an undercut and rally at the 200 dayā¦ā¦
I already have long call exposure so I sold some cash secured puts. Donāt think we get back to highs quickly, but there is a ton of support that would be hard to break below.
META also had an undercut and rally at itās 50 day. It had a massive run of up days in a row just felt GOOGL was the better play hereā¦.
Still a fan of Bitcoin, but obviously itās not for the faint of heart, and for buy and holders it should be sized accordingly. If you are looking for a spot Iād be watching the January low of $89,153.40 for an undercut and rally.
I donāt have the same sense for Bitcoin that I have for stocks. If this was a stock I would think you would want to wait a bit for things to settle down. Crypto is kind of a different beast though, could just snap right back.
A lot has changed since Novemberās election, but not this: The economy is still pretty solid, and people are still really down on it.
The latest evidence of the disconnect is a Conference Board report Tuesday that consumer confidence plummeted 6.7% in February from January, the largest drop since 2021. The other major confidence survey, by the University of Michigan, also has recorded falling confidence, as have several business surveys.
I donāt believe this. I think the economy is fine for rich people, it hasnāt been fine for the poor and middle class for quite some time. The question is, how long can this divide last and what are the implications? I donāt know the answer, which is one of the reasons I tell people to always have hedges in place.
Still love the GLP1s. Retail traders getting ripped apart on growth stocks doesnāt change the fact that the US has an obesity problem and I donāt think this is number 1 on Bobbyās radar.
Yesterday I took some profits on LLY and converted my calls to a cash secured putā¦..
Still have NVO calls and love this chart, looks like it wants to fill that December gapā¦.
This is something to keep an eye onā¦..
Metseraās GLP-1 peptide has a long half-life, meaning it could be administered once a month. And the company is ready to scale up.
Not much history to go on here, but Iāll add it to the watchlistā¦..
Since Iām not a doctor, this is an area GPT can help a lotā¦
What Sets Metsera Apart From LLY & NVO?
Current GLP-1 weight-loss drugs require weekly injections ā MTSRās once-a-month dosing could be a game-changer.
Fewer gastrointestinal side effects (a common problem with LLY/NVO drugs).
Oral peptide platform (pending further validation) could be huge for patient adoption.
š Investment Takeaway:ā If Metseraās Phase 2b trials confirm long half-life benefits, the stock could re-rate higher.ā But LLY & NVO still dominate physician relationships & distributionāMTSR needs a Big Pharma partner.
Metsera Inc. (MTSR)
Rating: 4/10
Overview: As a newly public biotech company, Metsera is developing innovative GLP-1 therapies with potential advantages like monthly dosing. While promising, it is still in the early stages of clinical trials and faces significant competition.marketwatch.com
Axon 2024 revenue grows 33% to $2.1 billion; third consecutive year of 30%+ annual growth-PR Newswire
If there was one stock I would have bought ahead of earnings, this would have been it. I do own the calls and I own it in GUNZ, but you had to figure all the potential bad news was already in the stock. I will probably be looking to add some more at some point, right around some resistance so far this morningā¦.
Zoomed out to a weekly chart to get a better perspective. Still well off the highs, but in this environment Iām likely to stay away from this name for a bitā¦.
GPT is cautious on the name as wellā¦..
1ļøā£ Short-Term: Trade volatility, but avoid large directional bets until regulatory risks are clearer.2ļøā£ Intermediate-Term: BUY on executionāwatch for revenue growth & Nvidia pipeline.3ļøā£ Long-Term: Be cautiousāSMCI has potential but faces increasing risks.
I havenāt studied this but my sense is that hedge fund performance fell off a cliff after Raj Rajaratnam got convicted of insider trading. As I have frequently said, there is no alpha in traditional fundamental analysis anymore. If hedge funds start fully adapting to all that AI can do then maybe all bets are off.
Before you go: Here are ways I can help
ā
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