Juggling With Knives: Profits, protection and planning for volatility in stocks, bonds, real estate, and real life.
This website is based on my book, Juggling with Knives. Both the book and website are about volatility in everything from stocks and bonds to real estate, and real life topics such as jobs and education.
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The long-term case for buying Tesla (TSLA) is easy to make (or easy to argue.) The company has created electric vehicle technology that delivers faster speeds, longer range, and greater efficiency than any of its emerging competitors. The company has done a superlative job of building out its global supply chain so that it has suffered less disruption due to raw material glitches or chip shortages than any of its competitors. The big long-term questions for Tesla are Can it drive costs out of its production system? and How long will it take for competitors to catch up with Tesla’s technology advantage? (Just for the record I come down on the “buy” Tesla side on these questions.) In the short term the buy/sell/hold case for Tesla is more complicated.
Finally, on Friday, August 5, in documents filed with the Securities & Exchange Commission Tesla put dates to the split its 3/1 split
My one-hundred-and-sixty-first YouTube video “Quick Pick First Majestic Silver” went up today. This hasn’t been a great year for precious metals hedges. However, allow me to make the case for First Majestic Silver (AG), given the coming recession and my expectations for the Fed’s schedule of rate increases. A hedge for 2023? At the current price, it’s an attractive bit of insurance against a big surge in risk.
At the close today, July 26, the Teucrium Corn Fund (CORN) was up 2.55% and the Teucrium Wheat Fund (WEAT) was ahead 4.11%. Both of those commodity plays outgained the U.S. Natural Gas Fund (UNG) with its 1.38% move higher. But for consistent gains–and the potential for more–I’d have to say that natural gas is my favorite commodity
In the last week Technology stocks, and chip stocks in particular, have staged a very impressive rally off of a really low base. Nvidia (NVDA), for example, is up 17.43% in the week that ended on July 21. That still leaves the stock down 39.43% for the year. Advanced Micro Devices (AMD) is up 15.36% in the last week. And it’s still down 37.85% for 2022. Qualcomm (QCOM) is up 1.85% for the week. And down 16.26% for the year. Impressive. But I’d be more inclined to see this as a sustainable rally if stocks were rising across the board–with tech and chips leading the way, perhaps.
Instead what I’m seeing is a rotation from safe and less risky stocks
Remember, natural gas isn’t just for heating; air conditioning demand sends natural gas for August delivery up 10.2% today
There are the base-load power plants that run all the time and meet the bulk of normal electricity demand. And then there are the power plants that are only intermittently called into service when demand spikes. In the United States the majority of the plants used to meet “spiking” demand run on natural gas. So you can imagine what something like the current heat wave now gripping much of the country does to electricity demand for air conditioning and to demand for natural gas.
The bill, known as the Chips for America Act, is a pared-down version of a broader set of competition measures and would authorize $52 billion in grants and loans for chip manufacturers, as well as a new, four-year 25% investment tax credit for chip making. Senate Majority Leader Chuck Schumer has pressed for a vote today with final passage as early as next week.
I’m firmly in the negative camp on emerging markets. If you want to profit from the downward move in these markets, I see two options: one is investing in a fund that shorts emerging markets, like EUM. Or, two, you can buy put options on a fund like EMXC (which tracks emerging markets minus China). There are benefits and downsides to each approach.
In my July 7 YouTube video: “Quick Pick UUP” I added the Invesco DB U.S. Dollar Index Bullish Fund (UUP) to my Perfect 5 ETF Portfolio. (To replace the Consumer Staples Select Sector SPDR ETF (XLP) in that portfolio. More on that in another post today.) Today I’m also going to add this dollar ETF to my Volatility Portfolio and to my Jubak Picks Portfolio. I’m setting a target price of $33.20 in the Jubak Picks Portfolio. You should take the fact that I’m adding a dollar position to three portfolios as an indication of how strongly I feel about a continued strong dollar.
My Quick Pick this week is Cheniere Energy (LNG), a liquified natural gas producer that I currently own in my Volatility Portfolio on JubakAM.com and plan to add to my Jubak Picks portfolio as well. The stock has fallen as U.S. natural gas prices have taken a hit after a fire at the Freeport liquified natural gas facility that has caused a backup in U.S. LNG exports. I think it’s a great time to get in on this long-term story at Cheniere, which just announced that it had given the go-ahead to the construction of a new LNG chain at its Corpus Christi facility. That chain won’t be in operation until 2025 but I see the demand for U.S. LNG continuing to rise through then.