Late Morning Trading -- AAPL Plunges -- The Sixth Indusrial Revolution -- October 23, 2024

Locator: 48645AAPL.

I'm not following the analysts' take on this -- AAPL plunging -- but it certainly suggests the ARM/QCOM feud is spooking investors. 

Of course, "all" the tech stocks are down today. NVDA is down almost 3%. CNBC attributes it to Treasury yields moving much higher, so that's fine. But for Apple, lots of bad news today, including headline story on Vision Pro though I don't really know what that means. So, I guess it's all about the 10-year Treasury. 

Link here:

I tried out the only M4 device Apple has on the market right now (at least I think that's correct; needs to be fact-checked) -- the M4 iPad Pro. At the Apple store over the weekend. It was absolutely incredible. The transition from M1 / M2 / M3 to M4 has been incredibly fast. Very exciting.

So, some charts. First, the 10-year moving much higher today:

I don't even know what to make of that. 

One day and one year:

*****************************
The Book Page 

How To Hide An Empire: A History of the Greater United States, Daniel Immerwahr, c. 2019. 

An incredible book; highly recommend. Just ordered from Amazon. Again, look at how far prices have fallen. Recurring theme on Amazon; also local grocery store.

 

The book is divided into two parts. A quick survey suggests, the US empire:

Part 1: from the 1776 revolution to December 7, 1941.
Part 2: from December 8, 1941, to the "birther conspiracy -- McCain, Palin, and Obama.

Absolutely fascinating book.

Two big takeaways with regard to WWII:

• it was all about logistics (everyone knows that) but the author failed in using the better analogy: Amazon (AMZN);
• the ten years peri-WWII was the true third industrial revolution

See wiki, as currently understood and generally accepted:

• first industrial revolution: 1760 - 1840; ended in the middle of the 19th century; inventions; advancements in textiles; age of inventions;
  
• second industrial revolution: advancements in manufacturing processes; 1870 - 1914 (beginning of WWI); age of mass manufacturing;
  
• third industrial revolution: beginning in 1947, information age; computer coming out of WWII; Colossus, Bletchley Park;
  
• fourth industrial revolution: rapid technological advancement beginning in the late 1990s; the Age of Apple (or the personal computer).
  

Much better:

• first industrial revolution: ended in the middle of the 19th century; age of invention;
  
• second industrial revolution: 1870 - 1914 (beginning of WWI); age of Henry Ford, mass manufacturing;
  
• third industrial revolution: peri-WWI -- the age of conventional manufacturing and logistics; rise of synthetics and the oil and gas industry; age of Standard Oil (or the age of John D Rockefeller);
  
• fourth industrial revolution: beginning in 1947, information age; the computer age (or the age of Turing);
  
• fifth industrial revolution: rapid technological advancement beginning in the late 1990s -- maybe it began in 1984 with the (in)famous Apple commercial; age of Apple (or the age of Steve Jobs)
  

The question is whether "we" have entered the sixth industrial revolution: Nvidia blades; LDCs; a return to nuclear energy to meet energy needs of the information age.

It's hard for me to accept that the need for nuclear energy to meet the needs of LDCs does not signify a new industrial revolution.

Ramblings On A Thursday Night -- September 26, 2024

Locator: 48405ARCHIVES.

Tag: private finance

When I listen to the talking heads on "Fast Money" and similar CNBC I am always negatively impressed with how little they seem to "tap into" the huge amounts of money .... there's no way anyone can get their heads around this immense amount of wealth. A lot of its paper wealth -- market value  -- electronic entries in someone's spreadsheet x (times) number of shares. But a lot of it is also cash flow, free cash flow and otherwise.

My dad loved investing. He was in the market during the 80s and 90s and absolutely loved it, but the companies that were in the news then had market values (I suppose) in the hundreds of millions and maybe late in his life in the hundreds of billions, but never trillions. 

And yet analysts are trying understand companies that are so unlike "traditional" companies in so many ways, not least of which their market value. 

I don't even care about the investing story: I'm simply fascinated by what we're seeing. An average congressman or US senator can't fathom what's going on. Readers get irritated with Nancy Pelosi in the market, and we're talking one million, five million, ten million dollars, whatever, and she's investing in companies with a market value of $3 trillion. 

These companies are going to build data centers that will require so much energy they're going to go nuclear. We have simply never seen anything like this before. 

First Industrial Revolution. Real.

Second Industrial Revolution. Real.

Third Industrial Revolution. A book. AKA, The Information Age. Onset: development of the transistor: 1947.

Fourth Industrial Revolution. Real. Current. Now. 

Klaus Schwab. 2016. Rapid technological advancement in the 21st century: AI, gene editing, advanced robots, blurring the lines between the physical, digital, and biological worlds.

What comes next? 

***************************
Trillions

Investors have never seen anything like this before.

Market value today:

• AAPL: $3.46 trillion
• NVDA: $3.04 trillion
• AMZN: $2.01 trillion
  
• META: $1.44 trillion
  

• BRK (A&B): $0.980.6 trillion

 

• LLY: $0.864 trillion
  
• AVGO: $0.832 trillion
• TSLA: $0.797 trillion
  
• WMT: $0.642 trillion
• XOM: $0.501 trillion
  
• ORCL: $0.466 trillion
• COST: $0.400 trillion
  
• QCOM: $0.192 trillion

• DIS: $172 billion -- parks
  
• PFE: $164 billion -- retail pharmacy
  
• SBUX: $110 billion -- coffee
  
• GM: $51 billion -- cars
• RIVN: $11 billion -- vans
  
• US Steel: $8 billion -- specialty steel
  

*************************
Existential Questions

Why hasn't Russia, in Ukraine, gone nuclear yet?

Why hasn't Iran gone nuclear yet?

**********************
Presidential Politics

No matter who the next US president is, it's going to be the most interesting US administration the world has ever seen. Neither candidate has a moral compass nor a Jeffersonian vision.

Never has this been more concerning: "That which does not kill us makes us stronger.”

And unless it's an "obvious" electoral landslide, we may not know for weeks, even months after November 5th. We have any number of circuit courts that could get involved. And the US Supreme Court may not get involved until the lower courts rule. The requirement to hand count all ballots in Georgia  is  insane ... and then the recounts. Unless, of course, it's a landslide. This, too, will be fascinating. 

And, of course, the polling and the reporting on the polling, is a joke. The Hill says Trump leads in Georgia; tied in North Carolina. The lead in Georgia? One point. And that's a poll.

The Book Page: From One Cell, Ben Stanger -- August 12, 2024

Locator: 48389B.

Tag: forecast global consumption.

Global oil demand, link here.

Forecast:

• 2024: global consumption of liquid fuels will rise by 1.1 million bop;
• 2025: will then rise another 1.6 million bopd (0.5/1.1 = 45% increase in growth y/y)

So, what was the forecast in 2020, in the midst of a global Covid pandemic? Link here.

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The Book Page

From One Cell: A Journey Into Life's Origins And The Future Of Medicine, Ben Stanger, 2023.

Audience: should be summer reading for high school students -- juniors / seniors -- with plans to attend college to major in the life sciences.  

I'll be doing at least two posts on this book, maybe more. 

Right now, I'm reading the section in the book on "knockout mice."

 One can get caught up on "knockout mice" by starting with three links.

• the Nobel Prize, October 9, 2007: link here.
• Knockout mouse, wiki; link here.
• gene knockout, wiki: link here.

From the book:

In 1990, an Italian-born developmental biologist named Mario Capecchi made history by creating the world's first, "knockout mice."

The term may evoke images of rodents with prodigious boxing skills, but the recipient of the decisive blow in a knockout mouse is not an opposing mouse, it is a gene. Through a painstaking process of cellular engineering, Capecchi had worked out the conditions to alter the mammalian genome, and now he was telling the world how he had done it.

Capecchi had an unimaginably difficult childhood. Born in Italy to a single mother just before World War II, he became homeless at the age of four when the Nazis arrested his mother for anti-Fascist activities. The toddler was shuttled from one living situation to another, first to a farm, then an orphanage, and finally into the care of his estranged and abusive father.

After the war, Capecchi's mother found him in a Reggio Emilia hospital, close to death from typhoid and malnutrition.

From there, mother and son moved to the suburbs of Philadelphia, where his uncle a physicist and Quaker, took them in. The traumas of wartime dissipated slowly, as Capecchi immersed himself in sports and schoolwork.

He attended Antioch College, a small liberal arts school in Ohio, spending summers in MIT biology labs through the college's work-study program. From there, he attended graduate school at Harvard (under Jim Watson, of double-helix fame), and ultimately landed a job at the University of Utah.

Capecchi was awarded the 2007 Nobel Prize in Physiology or Medicine for discovering a method to create mice in which a specific gene is turned off, known as knockout mice.

A Little Bit Of Everything -- And, No, This Is Not Like 1987 Or Even 2000 -- August 5, 2024

Locator: 48338ARCHIVES.

Market: wow, dividends and bonds that are already part of one's portfolio are looking really, really good.

Mideast: let's start the countdown --

• Friday, August 2, 2024: nothing
• Saturday, August 3, 2024: nothing
• Sunday, August 4, 2204: folks said "tonight" would be the night; nothing
• Monday, August 5, 2024: Trump says "tonight" will be the night.

Mideast: the only thing I'm tracking today -- "Mideast" over at twitter. 

Trump says Israel will attack Iran tonight. Remember the time difference. "Tonight" in the Mideast  means prime time television in this time zone (US central daylight time).

What does Iran have to lose if it persists in a regional war? A loss of its nuclear "weapon" sites. Israel is looking at an excuse / reason to take them out. A small response to Hezbollah / Hamas will not suffice, but an attack by Iran itself opens the doors for bigger targets for Israel.

Mideast: link here. Since this is not even a "thing" -- if one looks at the map there is no way Iran would fly over Saudi Arabia to attack Israel.

Iran shares no border with Israel, nor does Saudi Arabia.

To attack Israel, Iran would have to fly over a) Turkey (unlikely); b) Syria; c) Jordan (unlikely); Iraq (unlikely). 

So if Iran can't even entertain flying over Saudi Arabia to attack Israel, what is Prince MSB really saying?

The Prince is saying it loud and clear: Saudi Arabia is not going to get engaged in a regional war. Saudi is not about to risk its oil over an Iranian mis-step.

AI revolution: more evidence today that the folks who suggest "AI" is a "bubble" do not understand what's going on. One can start here. Or here.

MLB app: I'm not going to provide the specifics quite yet, but "the MLB" has just got a new subscriber. Me. 

Someone sent me tickers for a Texas Rangers game this week, and to get them, I needed to download the MLB app. Which I did. Thirty seconds while visiting Chipotle with Sophia, see below.

Downloaded the app on a lousy internet connection: no problem. And the tickets showed up. Small miracle. All the person had to know to send me tickets was my e-mail address. And my e-mail address for that app is attached to the IP of my mobile device and the risk of nefarious activity trends toward zero.

The market: link to The WSJ. 

No worries from me. I'm taking all available cash and buying as fast as I can. Well, methodically and according to rule. The best news. Monthly dividends for August have yet to flow. For example, Apple / AAPL will pay August 15th. Whoo-hoo. Hopefully market doesn't recover until October. September is the big month for dividends, plus other mailbox money.

The last big opportunity to buy AAPL: when it sunk to $160.

See disclaimers for the blog.

This is not 1987. Or 2000. Link to The WSJ.

****************************
On Inflation And Fast Food Restaurants

Counter-intuitive: my nephew and I went out for Texas BBQ yesterday, Sunday. He mentioned he had been listening to a personal finance/investing podcast last week in which the analyst suggested that McDonald's low sales were due to the "Ozempic effect." 

I doubted that Ozempic has anything to do with McDonald's low sales. First of all, Ozempic has not yet entered the mainstream to even begin to effect McDonald's. That may happen, but it will take awhile. Second, I'm not even convinced that the demographic group that is currently taking Ozempic is even going to McDonald's in the first place. 

McDonald's sales, if they are down, are down because of the (perceived) high price for their entrees. Folks are cutting back on their visits to McDonald's because of their high prices. My nephew mentioned that McDonald's is now costing him upwards of $12 / meal for each of his eight-year-old twins. 

Today, after "Tubular Camp," Sophia wanted to go to Chipotle, her favorite restaurant, by far. Nothing else comes close. I seldom go to Chipotle -- the servings are way too big for me. But if Sophia asks, I will take her to Chipotle. Today we invited her grandmother, May. I did not order anything but had a couple bites of the Chipotle salad that my wife ordered. Wow, it was incredible. 

Sophia's burrito was too big -- as usual -- to finish in one setting. So, she had half of it there, and then took the other half home to enjoy later. 

The Chipotle entre -- a burrito, a bowl, a salad -- all run about $9. My nephew mentioned that a McDonald's meal was trending toward $12 in the Minneapolis area. The most expensive item at McDonald's on a per serving basis? French fries. Chipotle: doesn't have French fries.

So, first observation with regard to McDonald's low sales. If you are a single, young, working adult going out to lunch, do you choose McDonald's where the perceived price for a meal is trending toward $12 or to Chipotle where an entree is about $9. Even if the prices for the lunch are about the same, where is that single, young, working adult likely to go? 

The real question is this: if prices are really high, because of inflation, if you are going to pay "up," that is pay more because of inflation, are you going to pay "up" for mediocre fare or pay "up" for great fare? Are you willing to pay the same inflated price for McDonald's as you would for Chipotle? 

Now, the second observation. Prices are high or "inflated" mostly due to what? It's my understanding the main reason for "inflated" fast food prices is due to wages. Wage inflation.

Wages aren't going to come down, and fast-food prices aren't going to come down. What could a fast food restaurant do to encourage customers: offer a "better" product for the same price! What a concept. Domino's can improve their product so many ways without adding anything (or at least not much) to the cost. After all, the "inflated" price of the pizza is due to wages. A 13"-pizza will cost the Domino's franchise almost nothing more than a 12"-pizza (or whatever the the current size is). 

Across the board, Chili's, McDonald's, Wendy's, Domino's need to improve their products and advertise that improvement -- it's the wages that are said to be driving the inflated prices, not the ingredients. 

My hunch:

• a) people will "pay up" for a Chipotle's; they won't "pay up" for a McDonald's.
• b) we should see "better" choices across the board at fast food restaurants, and "better" can come in many, many different ways.

McDonald's big problem: they really can't do much to change the perception of the quality of their product. The only way they can improve their product: lower the price. 

Domino's: advertise a slightly "better" product than what the competition is serving, and keep the price the same. Because it's all about wage inflation, a slightly "better" product is not the problem. 

 ************************
On Reading

I'm having a blast this summer getting back into my reading routine.

Currently reading:

• Jackie Kennedy (second book on Jackie K in past few months)
• Camera Girl: The Coming of Age of Jackie Bouvier Kennedy, Carl Sferrazza Anthony, c. 2023. Amazon.
  
• Jackie: Public, Private, Secret, J. Randy Taraborrelli, c. 2023. 
  
• The Naked and the Dead, Norman Mailer
• A Walk on the Wild Side -- Nelson Algren
  
• Homer: Iliad (now that I'm older, I think the Iliad is a "better" book than the Odyssey
  
• The Greek playwrights: ASE (Aeschylus, Sophocles, and Euripides)
• native American history (two books)

I'm absolutely convinced that reading age-appropriate books on the following for the grandsons, age five to twelve, would be superb:

• the Bible (already being accomplished by the parents)
• Homer
• Shakespeare 

By high school, I would add:

• Memoirs of US Grant
• Socrates, Plato, and, Aristotle (SPA)
• the Greek playwrights (ASE) 
  

Literature:

• Catcher in the Rye
• The Great Gatsby
  

Fine art:

• Romanticism

Architecture:

• Frank Lloyd Wright

I'm struggling with coming up with a good book of the American Revolution. The ones I have are too detailed, don't have quite the flavor I'm looking for.

I'm also looking for a good book on chess. Not one about all the moves, per se, but more of history and philosophy of the game. Hard to articulate. Possibly this one.

****************************
Teaching Reading

Three most important things when teaching children almost any subject:

• consistently and continually put things in context;
• the art of scaffolding; and,
• the techniques of speed reading.

Spaceholder

Everything Everywhere Happening All At Once, Part 1 -- August 1, 2024

Locator: 48319ARCHIVES.

Re-posting to add several items. New items in bold red.

These are the stories that interest me most right now; links may eventually follow.

Buffett:

• news and commentary -- August 4, 2024
• selling stock; "overnight" slashed 50% of his AAPL holdings; sold off most of his BofA holdings
• raising record amounts of cash -- and I mean record amounts of cash; and, no, he's not going to declare a special dividend, which some folks are suggesting. LOL.
  
• no one knows why; thinking back on financial crisis of 2008

EVs: 

• by now, "we" should be much farther along the S-shaped curve;
• VW looking to close an EV manufacturing plant in Belgium; first auto manufacturing plant to close in Europe; lack of interest in EVs in Europe
• American car companies can't afford to keep making EVs
• Tesla talking a big story, but failing to meet milestones

Chips:

• US computer chip manufacturing; loss of Intel could be catastrophic for US chip program
• all eyes on security of Taiwan, where 95% of all global computer chips actually manufactured
• there was a reason the US Federal government passed the "CHIPS Act."
• Intel: not "too big to fail," but rather, "too important to fail."
  

Politics:

• polls absolutely not looking good for Vance/Trump after "cats" and "hostage deal" comments
• presumed bounces before election:
• Trump has none
• Kamala has two: a) after she names her VP; and, b) after the convention
  
• we should know a lot more with regard to polling ten days from now, but right now some polls in swing states show huge lead by Harris
  
• Kamala doing final interviews for VP this weekend; will announce NLT than next Friday, I'm thinking Monday
• Trump underestimated the multi-racial demographic 
• next president will get at least one US Supreme Court pick; possibly two
  

Mideast:

• huge successes for Netanyahu the past two weeks; three top terrorists killed?
• but the story is not yet over
• major regional war about to break out 
• US Navy returning in force; occurring in backdrop of US presidential election; Kamala Harris, not particularly strong with regard to Israel has to tread carefully, if not to lose Democrats in Detroit; Democrats in Pennsylvania 
• France, Saudi Arabia: have told its citizens to get out of Lebanon now
  

Investing

• if interested in equities, highly recommend following Evan over at twitter
• market is only going to get more volatile
• great, great buying opportunities for those with long horizons
• investors will stay the course

Chevron

• with regard to Hess / Guyana, Chevron in deep doo-doo
• Chevron / Hess need to find another path

EVs

• the narrative continues
• VW will close first automotive plant in Europe; first ever automobile plant closed in modern era

AI

• follow the money
• follow the data centers
• follow the chips
• investors
• stay focused: 
• copper, fiber, chips (CPUs, FPUs, NPUs), 
• data centers, hyperscalers, natural gas, utilities
  

INTC:

• down as much as 20% after hours; lowest in a decade;
• announced two-year warranty on all PCs affected by their fried CPUs; 
• will cost INTC huge amounts of money (think Ford, warranty costs)
  
• still hasn't released a fix for fried CPUs; fix not expected until mid-August

AAPL

• it will take a week to sort out the takeaways from the most recent quarterly earnings
• analysts don't get it: it's an "ecosystem" 
• services revenue is now becoming the story; 
  
• Apple, Inc. has more than 2.2 billion active and installed devices
  
• does average Apple user spend $10 per month on Apple services?
• warranties
• AppleCare+ ($3/month)
  
• cloud storage (minimum: 99 cents/month; next level, $2.99/month; as much as $69.99/month)
  
• TV+ ($9.99 / month)
  
• ads
• Apple Music ($10.99 / month)
  
• Apple's total net sales run about $400 billion annually
  
• new record set this last quarter but Tim won't release actual numbers
• Apple ecosystem, Apple users:
• at a minimum: two mobile devices -- an iPhone and laptop
• most common: three mobile devices -- an iPhone, laptop, and tablet or watch
• rare, but not unusual: three mobile devices and a desktop computer
  
• perhaps not as rare as folks think: four mobile devices and a desktop computer
  
• each member older than ten years of age in a family has two mobile devices
  
• need for speed
• NVDA/AMD: moving at freeway speeds
• AAPL: taking the frontage roads
• INTC: in the ditch

• Apple's installed user base:

The Fed:

• panelists on CNBC fit to be tied that JPow and Fed "lied." Not following the data;
• had they stayed true to their word, would have announced a cut by now.
• anger / frustration will soon be forgotten; eager to see how long the buying opportunity lasts;
• September is a huge month for dividends; many folks hope buying opportunities last through the autumn;

Mad Money (CNBC): reruns --

• current episode: S18 E731 -- trying to find the date -- sounds like yesterday -- Thursday, August 1, 2024
• this is important because I missed today's episode; want to see the rerun tomorrow; eager to see what Cramer had to say about the debacle in today's (August 1, 2024) market
• cutting retail prices may drive foot traffic (think McDonald's) but it will hit margins --> will hit earnings --> will hit Wall Street; this is not rocket science
• Diageao YTD: -14.36% despite huge sales volume

Never quit reading. 

************************
Polls

******************************
From Reddit Tonight

Link here.

Question Of The Day -- US Debt -- July 30, 2024

Locator: 48268US.

The US, for the first time, reaches $35 trillion in debt.

Story buried on business pages if reported at all.

Not talked about on CNBC.

Why not? Why is "nobody" talking about the US debt? Why does no one seem worried about US debt? 

Question of the day.

************************
Corollary

Is US spending "doing anything" for quality of life? Since 1951?

 ************************
Maybe This Is Where We Need To Start

And then there's the "brand name." Certainly the "US brand" is worth a few trillion dollars. One wonders if the total worth of the United States includes the dozen or so old Apple computers stored in the garage and never used any more. Certainly they have some resale value. No?

*********************
US GDPNow

Link here.

July 26, 2024: 2.8% estimate for 3Q24.

***********************
Comment

Maybe these are two questions that can be discussed some day.

***********************
How Good We Have It

This is "the club" in Southlake, TX.

This is where Sophia is going this week for her chess camp.

Link here.

Commentary --- What Interests Me Now -- July 25, 2024

Locator: 48231COMMENTARY. 

The big stories that I am following and won't be able to post everything. There is just too much stuff happening.

California Supreme Court: Uber, Lyft win.

Under-reported investing story:

• the yen -- could be a Black Swan event
• Sara Eisen's expertise: currency markets
  

Presidential politics: 

• Trump: two bumps in the polls
• after the assassination attempt -- done
• picking JD Vance -- done
• Harris: three bumps in the polls
• after Biden withdraws -- done
• first national poll after this -- Harris, 44%; Trump, 42%
• but this is the big story: 44 + 42 = 86
• 14% of the electorate waiting to see Harris' VP pick
  
• when she names her VP (it now looks like a former astronaut) -- yet to come
• at / after the Democratic convention -- yet to come

Presidential politics:

• if Trump loses
• the turning point: pick of JD Vance as his running mate
• if Harris loses
• the turning point: her speech at the convention

The EV narrative

Three biggest lies:

• Tesla's robotaxi coming out in 2025 (next year)
• Stellantis marketing a $25,000 Jeep (ever)
• Ford making money on "small" EVs
  

The market:

• as usual, during periods of high volatility -- I pretty much ignore
• exception:
• Cramer's first hour
• Halftime Report

The economy:

• the GDP numbers today

Energy:

• my interest is waning right now;
• won't get excited until WTI reverses

Apple

• always exciting

Inflation:

• folks need to listen to Josh Brown's comments on "Halftime Report" today
• strong GDP does not equal inflation
• only two things driving "sticky" inflation right now: rent and labor
• rent inflation has been broken (though rent is still a problem)
• labor: unemployment numbers worsening -- if Fed is truly data dependent, Fed would "surprise" with an early cut
• but there's no urgency to a rate cut
• Fed rate cut in July: won't happen but there are a fair number of analysts suggesting it could happen
• my hunch: no analyst would be surprised if there was a July cut
  

Top Query Of The Day: Crooks Over At Twitter -- July 17, 2024

Locator: 48163MONKEYS.

Tag: assassination Crooks secret service conspiracy

Updates

Comment: I've been "doing" the blog since 2007 and I've seen untold number of "conspiracy theories" -- mostly from the MAGA crowd / far-right conservatives / Trump supporters -- and mostly on twitter .... an you know what? I don't recall one of those conspiracy theories that I've read, ever turning out to be true. It gets tedious. On another note, I get a lot of crackpot political notes that offer no actionable intel and are simply a waste of time.  

July 26, 2024: it's pretty definitive -- it was a bullet -- and no conspiracy. From The New York Times:

Original Post

Link here. [https://x.com/search?q=Crooks&src=trend_click&vertical=trends]

More fun than a barrel of monkeys.

Your $3 billion in taxes to fund the Secret Service at work:

 ******************************
Meanwhile

"Drill, Baby, Drill" -- US Energy Drilling Dominance -- July 11, 2024

Locator: 48114B.

Link here. 

From the linked article:

A central plank of former President Donald Trump’s election campaign is that he’ll restore America’s “drill baby drill” energy policy. But new data makes it clear that the U.S. is already drilling for oil and natural gas at a record clip, and is on pace to become even more energy-dominant next year.

The country is widening its lead in oil and gas production, steadily taking market share from the old giants—Saudi Arabia and Russia in oil, and Qatar in natural gas.

Over the next year, the U.S. is on pace to keep growing production, putting the Organization of the Petroleum Exporting Countries and its allies like Russia, in a difficult position. If those countries add more production, it’s likely to cause oil prices to fall, because oil demand growth isn’t keeping pace.

The International Energy Agency said in a report released on Thursday that U.S. production growth is the largest factor keeping oil supplies on the upswing this year. The country is expected to add 740,000 barrels of oil a day to the market this year, accounting for the bulk of the world’s net production growth.

******************************
Musical Interlude

This song / video is so "important" on so many levels.

Chips -- Update, Commentary -- AMD To Build A Supercomputer? July 3, 2024

Locator: 48040TECH.

With regard to tech, chips, and investing, I consider this a big deal (for me). Note the usual disclaimer -- everywhere on the blog and also at the bottom of this page.

In the big scheme of things, I see:

• NVDA: GPUs
• AMD: CPUs
• MU: memory
• NPUs: multiple, proprietary
• AAPL: SoC

Tabs at the top of the page:

• Chips.
• Tech.

The big source: wiki.

• transistor county;
• system on a chip;

System on a chip: Apple and Broadcom graphics at wiki --

A quick perusal of all these sites, plus:

• the blog, January 20, 2023;
• Chip War, Chris Miller, c. 2022;
• around 2022, I pivoted from energy to tech and developed an investing map based on that book

Putting that altogether ....

.... so, when I saw this, I was quite pleasantly surprised.

AMD: to build a supercomputer, 30x larger than the world's largest operational supercomputer? Link here. Press release from AMD:

Be sure to read the comments at the link. Particularly this one: https://x.com/WatchThisIWC/status/1808252744056426652. 

So, it that just idle chatter coming out of nowhere? It sure seems "pie in the sky," but then this credible source, tom'sHARDWARE:

Possibilities:

• US public: only intel agencies, and AMD wouldn't be discussing this if that's where the offer existed
• US private: there are only a few companies that could pull this off; think of the trillion-dollar market cap club: Amazon, possibly; Apple, no; MSFT, no; Musk (TSLA), possibly; NVDA, obviously not.
• sovereign nations:
• as noted above, US, no
• Saudi Arabia: wouldn't surprise me
• Japan: why?

The timing is incredibly interesting. An AMD press release following an international conference: see above.

The Frontier computer at wiki.

Then to come full circle:

Putting that altogether ....

.... so, when I saw this, I was quite pleasantly surprised. As an investor, this is almost actionable intel:

• unlike global warming, climate change, the tech revolution is not controversial;
• the tech revolution is very, very real
• huge FOMO among sovereign countries, and large market-cap publicly-traded companies
• unlike the dot.com bust several decades ago, "real" hardware -- not just webpages and dreams -- are being sold
• the tech revolution is being "run" by huge, well-known, well-managed tech companies, not be start-ups that we saw during the dot.com bust
• unlike the dot.com period when start-ups depended on huge amounts of hedge-fund support, the companies involved in the tech revolution have huge cash reserves; they have huge cash reserves and/or equity valuation that is not considered wildly out of line
• this revolution is occurring despite high interest rates; imagine what happens when the Fed makes that first cut;
  
• tech companies are growing into their evaluations
• Exhibit A:
• Nvidia: a p/e of 73
• AAPL: below it's "usual" p/e
• AVGO: 73; 10-1 split pending
• QCOM: 27
• INTC: 33
  

While writing the above:

• MSFT hits a new all-time high;
• AAPL turns positive again; if closes in the green, will set a new record; hits a new all-time high;
• NVDA snaps several-day losing stretch and is now (nicely) green today;
• MU up nicely today.

****************

Disclaimer Briefly Reminder

• I am inappropriately exuberant about the US economy and the US market, 
• I am also inappropriately exuberant about all things Apple. 
• See disclaimer. This is not an investment site. 
• Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.
• Reminder: I am inappropriately exuberant about the US economy and the US market, 
• I am also inappropriately exuberant about all things Apple.  

For The Archives -- Overturning Chevron -- SCOTUS -- June 29, 2024

Locator: 48019CHEVRON.

From Bloomberg Law overnight:

THE DEATH OF CHEVRON will increase difficulties for President Joe Biden’s administration at a time when it’s looking to cement policy goals ahead of the November election.

• The Supreme Court’s 6-3 decision stripping federal agencies of the power to interpret ambiguous laws makes it tougher for the administration to defend its biggest policy ambitions, including regulations issued in recent months to mitigate climate change, forgive student debt, and crack down on “junk fees,” Courtney Rozen reports.
• New Reality: Biden, who reiterated policy promises during a shaky debate performance Thursday, must contend with a reality that opponents now have fresh ammunition to pursue arguments that certain regulatory actions overstep the authority Congress gave to federal agencies. “This is as extreme an overruling of Chevron as anybody could have anticipated,” said Sharon Block, a Harvard Law School professor and former Biden-era leader of the Office of Information and Regulatory Affairs. “I don’t see really any remaining respect for the expertise of agencies.” Read More
• The impact of the Chevron doctrine’s demise will be lessened by years of high court skepticism undercutting the precedent, and also because judicial review of agency action has already grown more searching amid the rise of the major questions doctrine, Christopher Walker, an administrative law professor at the University of Michigan, told Jennifer Hijazi and Robert Iafolla. Still, the decision alters the regulatory landscape. It “takes an argument out of the quiver of agency lawyers and puts new arguments in the quiver” for industry challengers, said Nathan Richardson, a professor at Jacksonville University College of Law. Read More
• Also Read: Blockbuster Ruling Seals Long Gorsuch Quest to Gut Agency Power
• Hill Hiring: The justices also put the onus on lawmakers to become better versed in regulatory matters and to hire and retain expert staff needed to craft the complex regulatory legislation that will be expected in a post-Chevron world. Congressional staff are largely early in their career and lack the expertise, such as a law degree, for more technical work, Zach C. Cohen reports. Read More
  

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The Problem

Link here. 

Chevron:

Chevron deference is the latitude federal judges give agencies over how to interpret the statutes they administer when a dispute arises. Some 40 years ago, the Supreme Court articulated a relatively simple two-part test. First, the judges examine the wording and the context of the statute in question to see if Congress’s intent is clear. If it is, then the matter is settled: The agency is obliged to follow the letter of the law.

But:

The problem is solved if the US Congress would do its job and write statutory language that is unambiguous.

That's what has most upset folks. The US Congress won't do its job. Roe vs Wade was perhaps the most egregious. Congress had 40 years to codify the court's ruling in Roe vs Wade. 

The question comes down to this: would one rather have Congressional acts of law be subject to change / re-interpretation every four years -- or even more often -- through appointed, non-elected, bureaucrats; or, attempt to ensure that the precedent of law, extending back to the founding of the country, takes precedence? 

If bureaucrats have near-ultimate control, we have four branches of government. The US Supreme Court rightly confirmed there are three branches of government. Both sides of the aisle regularly complain the bureaucrats have too much power / not doing enough.

In fact, there's also a fifth branch -- bureaucrats whom the "elected president" cannot fire.  We can start with director of the National Institute of Allergy and Infectious Disease.

Link here. 

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Most Amazing "Fact" About The Chevron Ruling

I found it amazing that the court took this case, and then when it took this case, the early analysis clearly anticipated how the court would rule.

But most amazing: the actual voting -- 6 - 3. 

Two of the three, and perhaps all three of the dissenters are widely accepted to be the least ... well, I'll leave it there for readers to fill in the blank. I've said this before.

The Fed: Lucy; The Financial Analysts? Charlie Brown -- June 28, 2024

Locator: 48064ARCHIVES.

Tesla deliveries: to be reported the second day of the next quarter? Next Tuesday, July 2, 2024?

*****************************
The Fed

The Fed, the "rate," the market, the talk: after lots and lots of discussion about the Fed and when will the Fed cut rates, and then today's numbers (the PCE) and then comments from various Fed committee members. the fog is starting to clear:

• "they" may be talking about 2% inflation, but no one has really defined what components / what metric the Fed is really, really following (they have a "preferred" metric but that's just one of many); and,
• no one has really, really defined how long the metric must remain at 2% for the Fed to cut.

If one has not yet noticed, the Fed's promise to cut the "Fed rate" is like watching Lucy holding the football for Charlie Brown to kick, and furthering the analogy, if Lucy ever lets Charlie Brown kick the ball, he will find Lucy has moved the goal posts.

This is what's going on and how things will play out:

• the Fed is not shooting for 2%; they're shooting for 1.5% inflation rate for several months and for indications that inflation has truly been tamed before they will make meaningful cuts;
• to get to 1.5% inflation, we will have to see significant deflation (or is it called disinflation now?);
• bottom line: the Fed is now targeting 1.5% not 2%;
• the only way to get to 1.5% is to get through 2% and to see lots of pain;
• the Fed hawks will want to see headlines of "pain" on the business pages of general interest magazines and other media outlets, not simply in the headlines of business magazines and other business media outlets.
• the only "thing" now holding back that 2% target is rent, and maybe house prices, but in the big scheme of things, the only "thing" between now and 2% inflation is rent;
• and the housing situation is so tight in the US, there is no chance landlords are going to lower rents, which is required if we're going to get to 2%.

So, again:

• the Fed is targeting 1.5% inflation using undefined metrics and undefined time periods;
• to get to 1.5%, lots of pain will need to be endured by the broad "middle class" -- however one wants to define that demographic
  
• the lower class is relatively unaffected by inflation (and if they are, no one is listening to them anyway); and the wealthy are doing, doing very, very well with 5% in  money market funds to hedge against their investments in Nvidia.

And, oh by the way, while contemplating the above, no one has ever explained to me why the Fed targets a 2% inflation rate, and not 1% or 1.5% or 3% or 3.5%. So, even targeting 1.5% is incorrect. In fact, the Fed is looking for something else, but the press and Steve Liesman need a number, and 2% is the Fed's number, though in fact, it should be clear by now, it's really 1.5% if one needs a number. 

In fact, the Fed is looking for something else.

The Fed is looking for this: an undefined (for lack of a better word) "pain index."

The Fed's “pain index":

• increasing unemployment rate, greater than 5% in U-3 unemployed;
• the lack of "we are hiring signs" in the store windows on Main Street;
• headlines in USA Today screaming the US economy is deteriorating;
• a falling GDP but without going negative.

The Fed will get no credit if it lowers rates  in a Goldilocks environment, but if the economy starts to deteriorate and the pain index is obvious to all, then JPow can swoop in, cut rates, and look like the hero. And if timing works out, the Fed’s dithering could prove to be incredibly fortuitous for the next president, whomever (whoever?) that might be.

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The Market Today

The market was doing great the first half of the day, rising to new all-time highs in the S&P 500 and the NASDAQ but then by the end of the day everything deteriorated. What happened.

This is so obvious.

Last day of the month; last day of the quarter; last day of the first half -- after an incredible one month, one quarter, one half -- the money managers sold, locked in their profits, will take next week off, and then get back in the market in late July before the summer doldrums really set in.

By the way, how bad was it? 

Before the 10 - 1 split, NVDA was trading for $1,000 / share, or split-adjusted, $100 / share.

Now it's in the $125 range. Today. NVDA lost ... drum roll .... off 30 cents or thereabouts, and then NVDA rose after hours.

Although AAPL pulled back significantly today, AAPL was still up 1.42% for the week, and , like NVDA, rose after hours.

****************

Disclaimer Briefly Reminder

• I am inappropriately exuberant about the US economy and the US market, 
• I am also inappropriately exuberant about all things Apple. 
• See disclaimer. This is not an investment site. 
• Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.
• Reminder: I am inappropriately exuberant about the US economy and the US market, 
• I am also inappropriately exuberant about all things Apple.  
  

TGIF -- June 21, 2024

Locator: 47852ARCHIVES.

Disclaimer: in a long note like this, there will be typographical and content errors. In addition, facts, factoids, and opinions will be interspersed and may not be easily discerned what is what. In the big scheme of things, this is just a bit of rambling and if you skip this entire page you won't be missing anything important.

Speaking of which, what did the market do today? Near the close, essentially flat for the day -- a good day for stock pickers and traders, perhaps not for investors.

Louis Rukeyser: Friday night, one half hour -- that was about all the investing / financial programming we got on live television decades ago. Now, we have 24/7 financial programmig if you include the internet. Does anyone compare with Louis Rukeyser today? Yup. Scott Wapner on CNBC's "Half-Time Report." Wapner is as good as / or better than Rukeyser, day-in, day-out for an hour every business day. And when he has the right panel he is just so much better. 

Pet peeve: when knowledgeable (?) financial analysts refer to "chips" as commodities. 

Tech: wow, things move quickly. 

It was very fortuitous that I did a "deep dive" into CPUs, GPUs, and all that jazz, back on April 29, 2024 -- wow, that was less than two months ago. In less than two months, we have gone from talking about 7-nm chips to talking about 3-nm CPUs, GPUs and NPUs, along with cores, and now we have performance cores and efficiency cores. And "they're" all chips. And anyone who says chips are commodities display a level of ignorance that is mind-boggling. I'm not saying that the success and failure of chip makers won't change over the years, but chip makers aren't in the commodity business.

Phones: is this what it comes down to? This needs to be fact-checked

• Apple iPhones: in-house chips, currently A-series; ARM-based.
• Android: Qualcomm Snapdragon; ARM-based;
• Huawei: Kirin series, made by Semiconductor Manufacturing International Corp (SMIC; a Chinese company), and Chinese-designed chips.

Battery: years (decades?) ago, Steve Jobs said his biggest challenge was batteries. 

To the best of my knowledge, there has not been a lot of advances in battery technology -- at least there are not many headlines.

My hunch, at some point, Apple pivoted. Realizing that solving the battery problem (SUPPLY) was not going to happen any time soon, they turned to DEMAND. And that meant specialized chips, more efficient chips, smaller chips, chips that can be placed together more closely, and chips that work better together (are optimized for each other). All of those factors could reduce DEMAND, and thereby lengthen the intervals between charging. The holy grail? Twenty-four hours of high demand use (gaming and movies) on the smallest iPhones (with a side benefit, less heat). 

Specialized chips: CPUs, GPUs, NPUs. More efficient chips: performance cores and efficiency cores. Smaller chips: 3-nm. Placed on one chip: SoC. Optimized: in-house synergetic software.

Robert Winnett out as editor at The Washington Post. Links everywhere.

• "Winnett has decided to remain at the Telegraph." -- The WSJ. 
• typo in The WSJ headline; "joint" vs "join." Doesn't happen often.
  

Glut? As predicted? Used car prices dropped like a rock. A recurrent theme on the blog in recent months. Link here. Maybe Carl Q will comment.

Only One Sector Of The Economy Has Any Effect On The Entire Rest Of The US Economy: Housing -- June 17, 2024

Locator: 47864ECON.

Only one sector matters any more: housing. And that sector won't be solved any time soon, if ever. Certainly not in my investing lifetime.

• everything else is part of the US Goldilocks economy; everything else is manageable; and almost everything else is going to improve even more over the next 24 months. 
• the only sector that is "out of control" but which does not have any effect on the overall economy is secondary education. 
• women's reproductive rights has become a terrifying issue for 14% of the US population, but it won't affect the economy; and it's hard to call it "out of control" -- 
  

Actually, the only other sector that is out of control is the media, and specifically, the media that covers politics, but in the big scheme of things, politics has very little effect on the daily life of most Americans. 

• exhibit A: all that talk and the federal / state action regarding IVF? Two percent of all births, annually, in the US, are the result of IVF.
• swamping IVF: babies born to new arrivals from the southern border: born in the USA -- fastest way to gain citizenship --
• and the US government isn't going to separate newborn babies (citizens) from their parents, regardless of status
• social security numbers "automatically" provided to all newborns

Biggest bargain for US shoppers within the next 24 months: privately owned vehicles (POVs), and in this order, timeframe in parentheses):

• used EVs (now)
• used ICE (in next six months)
• new EVs (now through the next 24 months)
• new ICE (six months through the next 24 months)

The Fed: whatever the Fed does now will simply affect American psychologically; 

• whatever actions the Fed takes over the 12 next months (through July, 2025) will have no material effect on Main Street or for home buyers. 
• whatever the Fed does now, however, could have an exaggerated effect on the market, for investors, and for the wealthy.

Most interesting consumer sector to watch over the next twelve months: fast food restaurants. Not talking tickers; talking headlines, prices.

Second most interesting "sector" to watch, not the ticker symbol but the earnings and headline stories:

• Walmart
• Amazon
• Target

Most interesting ticker to watch this next year? DIS. Maybe BRK.

Boeing. Seriously, why would any airline choose Boeing over Airbus?

*******************************
Tech Revenue

Link here.