Item #1: Meta stock falls 10% on weak guidance and concerns over AI spending despite an otherwise strong quarter, shown below:
Of course, I lost a lot on this, which amounted to around 5% of the total portfolio. Thanks to diversification this was not as bad as the 20% decline incurred by FBL, an ETF that tracks 2x the daily movement of Meta. I had sold some of the position weeks ago when Meta was at $500, as it had grown to dominate the entire portfolio.
I needed more diversification, which helped on Friday when Google/Alphabet stock surged 10%, helping to offset some of the Meta losses. The fund is GGLL, which seeks 200% daily leveraged investment of Alphabet/Google, which was up 20% this Friday. So overall, thanks to GGLL, and gains from other tech stocks like Amazon and Tesla, and also shorting Bitcoin (which fell from 66k to 64k), it was still a strongly positive week.
Meta will recover, so not worried. But it did come as a shock seeing it down so much. Obviously had I known I would have sold it and bought back in. But the Metaverse is still a money pit, and it remains to be seen if it will ever succeed. I have no idea.
Item #2: Stock market surges thanks to World War 3 being called off, strong tech earnings. I was right two weekends ago in predicting Israel’s response to Iran’s drone strike would be weak and stocks would surge as a result, which it has. The Nasdaq was up huge this week, but Bitcoin, however, was down.
My 2024 prediction of Bitcoin lagging 3x tech funds TQQQ and TECL is still on track for being right (I was right about this in 2023). Below you can see TQQQ, the 3x version of the Nasdaq 100 was up 10% but Bitcoin was down 1%:
People wonder, “Why do traders and quants make so much?” The reason why smart people tend earn more is to solve difficult problems, to anticipate, to make sense of things, or to find or see hidden risks. Investing is a minefield: there are more ways to lose money than to make it. For example, why would anyone invest in Bitcoin, which is highly correlated with the stock market on downside and less on the upside, when one can just invest in leveraged index funds and remove the uncertainty of investing in Bitcoin (or any single undiversified investment) whilst still getting the upside comparable to Bitcoin with the leverage? Coming up with this sort of epiphany or insight–when most advice is bad or wrong even if it’s free–is why smart people earn more, or at least are justified in being paid more. Free advice that is bad is costlier than correct but expensive advice.
Item # 3: Bitcoin Triple top still in play, target $20k on deck. Anyone with a working brain can see this. As one of the highest IQ people in the world, mine happens to work exceptionally well. The smartest people are not only limited to those “world’s smartest” lists, but also many unknown people. It’s extremely improbable that out of 8 or so billion people, that the smartest people only happen to be on those lists or are famous.
Item # 4: DJT stock keeps going up. So many pundits are expecting Trump Media to go bankrupt. The trade is way overcrowded, and short-sellers continue to get squeezed as DJT surges higher and higher.
Item #5: Biden’s 13th-Quarter Approval Average Lowest Historically. Trump Win Inevitable?
Trump’s odds of winning are easily at >50%. Biden’s low approval ratings, at just 42% (vs Obama who at >50% at this same time in 2012), as an incumbent portends to a loss. The Electoral College math favors Trump in swing states, like in 2016 and 2020, so Biden needs the popular vote. A sub-50% approval rating suggests a loss of overall support. Trump will be super-bullish for stocks due to anticipated tax cuts, stimulus spending, and less regulation.