Weekly Recap | September - W5
Watchlist Update, Tariffs Risks, Trade Setups Sumary, The AI Bubble, Transmedics & Mercedes, Nebius Price Targets & Averide Scalling, Alibaba Cloud Conference and AsteraLabs vs Nvidia & Intel.
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Weekly Buying List Update.
Here is my watchlist & buying plan. Reaching those prices does not mean I always pull the trigger; those are only my view of valuation & price action today. I only pull the triggers on the ones I believe to be the best liquidity attribution at the moment - purchases are shared on my Savvy B&H portfolio.
https://savvytrader.com/wealthyreadingspro/buyandhodl
Optimized Cost Basis (OCB) - optimum average price for a long term position.
Accumulation Target - buying target based on price action, to average up.
Rating - Buy < 3.5 < Hold < 7 < Trim.
“(Slow) DCA” - trading at proper conditions to open a position or accumulate.
Bold cells are updates compared to last week.
Macro.
There isn’t much to say on this section as nothing important changed. Data shows the same tendencies, a struggling labour market while the fear of inflation is still present which gives no good path to the FED, as I shared more than a year ago now & Jerome Powell confirmed it many times lately, the latest one during his speech Tuesday.
Near-term risks to inflation are tilted to the upside and risks to employment to the downside - a challenging situation. Two-sided risks mean that there is no risk-free path. If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later to fully restore 2 percent inflation. If we maintain restrictive policy too long, the labor market could soften unnecessarily. When our goals are in tension like this, our framework calls for us to balance both sides of our dual mandate.
That inflationary pressure comes from tariffs which are creating massive revenues to the government, but will trigger price hikes.
It is impossible to know when and how, nor to which extends or how the government will manage them, and we shouldn’t base today’s investing decisions on “maybes” but it is important to keep that in mind. The U.S. economy is not outside of the woods yet and a recession can still happen.
Watched Stocks and Portfolio.
Rapid laius on this week’s write-ups as I shared lots and want to resume their content. The market changed fast and I had to adapt my plans rapidly as even if my timeframe is usually months, when the market gives bearish indications, you listen. Preserving capital is more important than some percentage points.
The bottom line of those write-ups is: I remain confident on China and Ethereum and both narratives remain my priority to accumulate on pullbacks - Ethereum is already there. The S&P is giving signs of weakness so I closed my lowest convictions as I want to preserve my capital and have cash available in case of a breather. And I shared one new trade setup idea on JD.com as Chinese stocks wake up.
I am still working on organising my write-ups to share my trades and opinions clearly with distinction between my long-term and swing plays. Here are the write-ups with the content if you guys are interested in a specific subject.
On the 19 I shared my view of the market and my positions at the moment, plus my new PayPal trade. Nothing changed from what was shared on this write-up.
On the 23, I confirmed my plan on China and Ethereum as the latter started to fall and it usually is the time most panic. I wanted to confirm that nothing changed for me, the plan was unfolding as expected. I also shared a trade on Rubrik, which I still consider to be a good trade.
Two days later, I closed that trade on Rubrik and shared my view on the market; that it were sending lots of weakness signs. When you use options or leverage, you have to control downtrends; options can go to $0 in days and if they are bought on leverage, the damages can be wild. So when the market shows weakness - losing trendlines and short-term EMAs, even swing traders have to pay attention and that is what I did.
Missing some gains is less damaging that being leveraged during a breather.
I sent another write-up yesterday to detail a trade on JD.com, to give you the keys if you wish to take it, following my method or building your own.
That being said, I have some ideas to improve these going forward, starting by having two different sections and thumbnails for the long-term and trade setup write-ups, so you guys can easily identify the type of write-up you’re interested.
Constantly focus on improving the service.
The AI Bubble.
We see more comments about the AI bubble since the partnerships between Nvidia, Oracle and OpenAI with many using visuals of power strips plugged on themselves, insinuating that those companies are running a scheme to fake revenues.
It’s kinda ridiculous and Martin Shkreli explains it better than me.
Nvidia provides hardware, Oracle uses this hardware to provide compute and OpenAI uses this compute to provide a final service & generate income in users’ subscriptions. They provide different goods/services but rely on each other so what Martin explains is that instead of raising capital from the market, they invest in each others and rely on their common success to generate value - equity in that case.
They choose to do it that way as raising funds through convertible notes or dillution is less optimized, would take longer and bring external variables in the mix, and would end up paying each other for their product either way. Instead of doing so, they tie up their success together - and potential failure, as part of those deals are in future revenues, not cash, which requires a strong demand for final products, otherwise these investments won't yield any results.
Transmedics Partnership.
Transmedics announced a partnership with Mercedes in Italy for ground transports of its OCS case. The first step towards its NOP expansion within Europe, a pretty big deal although it seems like a pretty small step.
September is almost finished, flights have been healthy although September slowed down. I’ll share my quaterly projection soon and remain bullish on the stock.
Nebius Price Target & Avride.
Funds and analysts continue to wake up to Nebius, with Northland setting up an outperform rating with a price target at $206, published after a meeting with the company’s management.
There are probably more to come as larger funds will also wake up to the name.
Secondly, Avride published a new post to celebrate their 100,000 delivery at OSU this year. The 114 deployed robots at the university completed 80,000 deliveries between January and April, the end of the academic year - around 20,000 per month, hence a pretty similar start for this academic year.
Those small robots will scale and Avride remains a pretty underrated subsidiary from Nebius to my opinion. Positive news.
Alibaba's Cloud Conference.
Management focused on their plan which can be resumed as an aggressive expansion geographically and in terms of technology, with aggressive investments.
I also shared my opinion on their geographical expansions, which I am not a fan of but that’s only my personal opinion and the company didn’t start it yet.
Not sure they will push aggressively on this. Will have to wait and see how it goes, although the market likes the new, logically.
AsteraLabs vs Intel & Nvidia.
The market fears that the partnership between both ends up in competitive hardware to AsteraLabs’. I personally doubt it and would either way take years to get there.
I wouldn’t worry much and would love to use this fear as an entry point. It’s still too expensive and risky to me now, but the point might come when I’ll buy in.