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CNN Should Buy Twitter

Hear me out…

Trump has been dominating the headlines the past few days, drawing ire from the most ridiculous tweet of the year.  In case you’ve just awoken from your pre-4th of July blackout coma, please watch the video below.

Being a redneck conservative and old school wrestling fan, I thought the video was comical but also insane. Unless you absolutely hate Trump’s guts, I would venture to say his post at least made you smirk a little or at least shake your head in bewilderment.  But, once you started seeing the media’s reaction, you acted in disgust and contempt.  Every time he posts something insane like this I think to myself, “Yup, this is gonna be the one that gets him impeached.”

Could you imagine if Obama did something like this?

Trump will go down in the troll hall of fame with this post and mainstream media cannot stop talking about it or him for that matter.  The post kicked off a witch hunt led by CNN to find the person responsible for creating the video.  Leftists were also calling for Twitter to ban Donald Trump.  Lest we forget that not less than 2 months ago, Jack Dorsey said Donald Trump’s tweets are good and he should keep posting them.

But, let’s get back to why CNN should buy Twitter and the steps they can take to regain a sliver of their dignity.

  1. Buy Twitter (for an insane premium so I can sell and get back to even).
  2. Fire Jack Dorsey (so someone else can put in an edit button).
  3. Make Anderson Cooper CEO of Twitter (he seems like the Silicon Valley type).
  4. Make Trump apologize (lol).
  5. If Step 4 doesn’t work, ban Trump from Twitter. (to try and establish alpha male status).
  6. If Step 4 works, ban Trump from Twitter. (to 1-up the troll of all trolls).

The following playbook would most likely be the death blow for Twitter as a functioning product and company, but god damn it would be hilarious.  I can already picture Trump making all of his advisors produce anonymous egg accounts on a daily basis to barrage mainstream media with a lifetime supply of high level trolling.

CNN is owned by the Turner Broadcasting System division of Time Warner which is currently trying to close the merger with AT&T.  So when I say CNN should buy Twitter, I really mean AT&T/Time Warner should buy Twitter.

Full Disclosure: Long $TWTR. No position in $T or $TWX.

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No One Has Made Serious Coin From Bitcoin

I have a few friends who got in on the ground floor with $BTC and now $ETH and a handful of other cryptocurrencies.  I was in Portland a few months ago and just shook my head while I witnessed my buddy’s rig setup sitting next to some bongs.  Looking back through my texts, he was mining $ETH at $8 back in January.  Today it trades at $162.50, up a mere 1913% in 2017.  Totally normal action folks…if you are trading penny stocks.

To say that these cryptocurrencies are not in a bubble is foolish.  To say that these cryptocurrencies are in a bubble is foolish.  Either way, we are foolish.

Do you want to know the easiest way to spot a bubble?  It’s when the underlying asset is already in a long term uptrend and then that uptrend starts to shoot parabolic.  Looking at the chart of $BTC below you can clearly see an uptrend line that I drew that closely resembles the 200DMA.  Notice how every time it started moving parabolic it was quickly reminded of gravity and buyers regrouped near the long term uptrend line.  This is the largest difference between the uptrend line and the current price in the last 3 years.  As you’ve witnessed it has had an impeccable run from $1000 to $2300 in barely over a month’s time.  This doesn’t mean the crash is coming, but I will be there to remind you wen it tags the uptrend line again.

The other easy way to spot a bubble is when your friends send daily texts saying “Choo choo!!” or “Ride it, like a pony!”.

I don’t own any Bitcoin.  I don’t care to own any to be quite honest.  I’d rather own Rampcoin which is fully backed by the Fed.

I ran a series of polls yesterday and the results were pretty interesting.  As you can see 52% of the respondents don’t own a single bitcoin and 53% have made less than $1,000 (with the most likely number being $0).

By the way my definition of serious coin is >$100,000 and the poll results show 28% have made that much on $BTC. *cough* *coughbullshitcough* *cough*.

According to the table below, if you own 10 BTC you are in the top 2%, yet in my poll a combined 24% said they owned >10 coins.

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The reason I say no one has made serious coin is because 1) people are liars and 2) people are emotional.  Do you honestly think if you got into Bitcoin in 2010 that you wouldn’t have sold it after it being up 100 or even 1,000%?  Humans are programmed to take profits and cut their winners.  What I find so funny about these cryptocurrencies is how you could buy a pizza one day and a Mercedes the next day.  Again, totally normal.

I’m sure this post will get all of the cryptofreaks out gunning for my head, calling me a blasphemer.  How about you tweet me your statements that show how much you made and I will follow anyone who has made over $100k.

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$SNAP Bids Disappearing Quicker Than Male Reproductive Organ Pictures

$SNAP is getting annihilated again today, trading down 11% at around the $21 level, already well below Thursday’s open IPO price.  Some poor soul paid $29.44 for shares on Friday and it’s already down approximately 30% from the highs in 2 days.  This is and will continue to be an extremely volatile stock as “investors” try to determine a fair value for Snapchat’s Penis to Earnings ratio as well as growth of their MADPs (Monthly Average Dick Pics).

When are we going to stop caring about eyeballs and start caring about real profits?  This appears to be another failed IPO and is eerily reminiscent of $FB IPO where it dropped 50% in a matter of weeks and everyone all but gave up on it around the mid teens only to see it climb multiples higher.  I could see the former happening here, but not the latter.

Full disclosure: I do use $SNAP on pretty much a daily basis but I could easily go without using it for a while.  The same could not be said for $TWTR.  People get on $SNAP to send nudes and humblebrag with their stories.  People get on $TWTR to read the news and check Trump tweets.  People get on $FB to complain about their life and post baby pictures.  People get on Instagram to look at pictures of cats and girls with big butts.

I think $SNAP is another fad and their moat is not very wide.  Look at Instagram, they’ve already completely copied the disappearing message and My Story concept.  It’s only a matter of time before $FB starts eating more and more into $SNAPs revenue and eyeballs as they appear to be a one trick pony.  Don’t get me wrong, their growth in the past 5 years is unremarkable and extremely impressive.  But without profits to back up those numbers, what do you really have?

From a Business Insider article a month ago:

Snapchat parent company Snap Inc. posted a net loss of $514.6 million in 2016, according to the initial public offering prospectus it filed on Thursday.

The company’s losses have been widening in recent quarters as Snap ramps up spending and hiring.

Snap also said that it “may never achieve or maintain profitability,” as it plans to continue investing heavily in its business.

In quick summary, I wouldn’t buy or short this thing unless you like to be a glutton for punishment.  Way too unpredictable.  In the long run the fundamentals will give you the fair price.  The only problem is how do you read the fundamentals?

I found this picture from the future.  Haters will say it is photoshopped.

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Punxsutawney Phil Sees Shadow; Sets Stage For 3 Rate Hikes In 2017

While most of you were recovering this morning from last night’s rioting in Berkley, Punxsutawney Phil was up early checking out his shadow.  This is very ominous as it means we can expect 6 more weeks of winter and 3 more rate hikes in 2017.  I don’t typically believe in this kind of voodoo but Punxsutawney Phil also predicted a Trump win last year.  Sad.

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Humans Are Notoriously Bad At Making Predictions

I ran a poll storm right before Inauguration Day (1/20/17) so that we can keep a record of how bad humans are at predicting things.  Robots, on the contrary, are very good at predicting things because we don’t have emotions.

All of the polls stayed within a +/- 5% range which to me just reiterates the fact that no one has a clue what President Trump is really going to do during his tenure and how it will affect the markets.  To me these polls resemble current investor sentiment as everyone is rooting against President Trump and criticizing every single one of his actions now.  This gives a higher probability for an upside surprise as the fear mongering will continue for the next 4 years.

All poll results said we will be lower 1 week, 1 month, 6 months, and 1 year after Inauguration Day.  I will be keeping track throughout the year of how we end up and will be reporting updates periodically.  So far humans are 0 for 1 as the S&P 500 was up 1% the week after Inauguration Day.

 

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How To Talk To Your Pets About Multiple Rate Hikes In 2017

I ran a poll last week to get a gauge of how many times the Fed will raise rates in 2017.  Over 1,000 votes were tabulated which was good enough for most 2016 Presidential voting polls.  I consider 1,000 votes from my followers to be a much better and unbiased gauge of the market than any other poll put out by some $29.99 newsletter slinger.

The responses were fairly evenly spread out if you combine “cut rates” with “zero”.  Therefore, 1/3 of people think the Fed will cut or not hike at all, 1/3 think one hike, and 1/3 think two or more hikes are on the way.  Fair enough.  Let’s see what some of our friends think…

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For those not in tune with the Fed dates, below is the full calendar for the potential to hike multiple times or kick the can throughout the year.

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I can promise you this: the longer the Dow stays below the all-important 20,000 level, the longer the Fed continues to kick the can.  Lest we not forget that the Fed has only hiked two times in the past 10 years.  I also imagine Trump is still waiting for a handwritten thank you letter and Christmas card from the Fed for allowing them to hike with confidence after the election without having to endure the same outcome that came from the first hike back in December 2015.  The fact that the market was unwavered by the 2nd hike in a decade shows to the strength of the rhetoric and pro-business and pro-growth policies that Donald Trump has been preaching.

The reason Fed policy is so difficult to predict is because the market is difficult to predict.  Most likely they use too many metrics so that if 1 out of 99 of them flashes a red warning signal they can justify kicking the can.  Also risks and ramps happen fast.  Right now they are playing catch up.  If the economy and Dow continue to improve then yes we could see multiple hikes in 2017.  But, if we get one hint of uncertainty, you better believe the Fed will sit on their hands and let the market come back into their playing field.  Right now it’s President-elect Trump’s move with the inauguration looming next week.  If we get a buy the election sell the inauguration outcome we will continue to see the Fed sit on their hands for the time being and the Dot Plot will be reorganized once again.

I’ll set a mental note to circle back to this article after the December meeting to see how we did.

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A Tale Of Two Charts

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of bullishness.  -Charles Dickens

The two charts below show the US Fed Funds Rate and the Dow Jones Industrial Average from 1970-2016.  Note the area of recessions and how they coincide with peaks in the US Fed Funds rate.

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dow-jones-100-year-historical-chart-2016-12-14-macrotrends

In short: We haven’t started a recession when the Fed Funds Rate was below 4-5%.  Currently we are at 0.25-0.5 bps and there is a 95% chance the Fed will raise to 0.5-0.75 bps.

Room to run?  Or is this the new normal?

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97% Chance Of December Rate Hike, 0% Chance Of Selloff

It should be no surprise that the Fed is hiking rates in December.  The only surprise would be if they hiked to 75-100 bps instead of the 50-75 bps that is predicted.  They can thank President-elect DJ Trump for rates exploding to the upside.  I wonder how treasuries would have reacted if HRC would have won the election.

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Courtesy of CME Group

As it currently stands the US10YR is yielding 2.44% and the US30YR is yielding 3.11%, up 84% and 48% respectively from the post-Brexit lows in July.  That is not a typo folks, both long term yields are up over 100 basis points and all of the pundits and media are proclaiming the banks are about to enter another golden age.  Financials continue to dominate and most haven’t seen levels this high since Occupy Wall Street as they too have been stuck in the mud from the Fed policy.  I can promise you this, there will be an Occupy Wall Street 2.0 very soon, believe me.  I also can’t help but marvel over the rising rates as I was lucky enough to lock in my home refinance in early October before they really started exploding to the upside.

As long as the Fed sticks to their dot plot, we shouldn’t have much to worry about right?  As Fed-head Dudley said this morning, he favors gradual rate hikes if the economy stays on track.  In other news, the sky is blue.  But, if it changes colors, we won’t hike.

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Courtesy of CME Group

With everyone and their grandma knowing that this rate hike is coming, there should be no surprise selloff like last December and at the start of this year.  But, as I always say, the market will do what most people don’t see coming.  Eventually, the tone will change on Wall Street that every rate hike from here on out will be labeled as bullish.  Watch and see.

The Dow hit another ATH this morning.  Merry Christmas ya filthy animals.

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The Hottest Gift This Christmas

The hottest gift this Christmas will be coming from Nintendo.  They are firing on all cylinders right now (sort of) with the release of Pokemon Go (Nintendo owns 1/3 of The Pokemon Company) earlier this summer to the new adaptation of the Mario franchise with the release of Mario Run app on the iOS on December 15th.  They are also going to be releasing a new gaming platform in March 2017 called Nintendo Switch.

All of these new Nintendo products are sure to excite gaming enthusiasts, but the hottest gift this Christmas will be the NES Classic Edition.

The NES Classic Edition is nostalgia at its finest.  At $59.99 this thing is an absolute steal.  It comes with 30 pre-loaded games, which equates to $2 per game, and they are some of the greatest ones ever created for the console.  There are a handful of other games that could have easily been added to the list but I’m not complaining.  There is speculation they may try to push a major update to the system via USB.  Even though it appears to replicate the original NES, it is about 1/8 the size and looks more like a blocky smartphone.  It does not accept original NES cartridges and you need an adapter to use the original controllers.  It also uses HDMI and USB cables for display and power compared to the A/V or Coaxial cables of the past.

My major knock on the system is that they give you a single controller with a 2.5 ft cord, that is just not feasible and almost unforgivable.  It would have made sense if people planned on playing this console on their old 20″ CRT.  I’ll be playing it on a 60″ LED, so sitting that close to the TV makes absolutely zero sense.  I will be purchasing the cord extension adapter in lieu of the wireless controller as I’ve heard the wireless controllers aren’t that great.

A select handful of major retailers are selling the NES Classic but they are all sold out.  This appears to be either a Nintendo supply chain issue or a giant marketing scheme, or both.  I lean toward the latter as Nintendo is notorious for pulling off this move to spur fake demand and hype up the product.  The thing is they don’t need to hype it up.

Walmart, Best Buy, Amazon, and Gamestop have all carried the product since it launched on November 11th, but it sold out instantly.  I wasn’t smart enough to pre-order it, but Amazon has said they expect to fill all pre-orders by mid-December.  Which means, if Nintendo can get their shit together, hopefully we can all enjoy this over the holidays.

I’ve been looking forward to getting my hands on this system for a while.  In fact, I was so anxious that I actually pulled out my original NES last weekend and tried playing with it.  Unfortunately, when I went to start it up I got the red blinking light of death.  Many of you are familiar with this conundrum.  The traditional fix is to blow into the game cartridge or the front loading pin connector to blow out any dust or debris.  That didn’t work like it had so many times in the past 25 years so I decided to take it completely apart and cotton swab the pin connector with alcohol (vodka).  Again, that did not work, so I’m afraid I might have to order a new 72-pin connector or mod one of the chips on the circuit board.  It’s funny how complicated yet simplistic the original NES is, being 30 years old.

Retro-gaming seems to be a trend that is coming back.  One of the biggest reasons I stopped playing video games and getting the latest PlayStation or Xbox consoles is because the games are over-complicated and arduous.  You could play a game like SkyRim and spend days, literally, playing it.  I read online that a game like Skyrim takes 300 plus hours to beat and that’s probably if you knew every step to follow.  A game like Super Mario Bros could take 3 or 4 minutes to beat if you do a speed run.  That plays well when having friends over to play classics like Super Mario Bros, Donkey Kong, or Pacman.  I’ve even seen bars pop up that have NES, Sega, Super Nintendo, N64 consoles set up where you can go and drink and play retro games that you played growing up.

This gift is a great idea for anyone between 8 and 45 years old.  For the younger kids who are used to the newer systems, it is effectively 30 games for the price of 1 that the whole family can enjoy.  For the older crowd, you can relive the nostalgia of the mid 80s and early 90s.

A word to the wise: Do not pay more than $59.99 for this system, unless you absolutely think you have to have it before Christmas and you love throwing money away.  I have seen scalpers on major retail sites selling this thing upwards of $300.  I even saw ridiculous outliers of $4,000 on eBay.  It’s not that this system isn’t worth more than $59.99 (it is), but the fact is that Nintendo will make as many as possible to meet the demand, which is yuge.  Based on demand for the Classic NES console, Nintendo could easily replicate their Super Nintendo console and N64 console and make a killing.  Hopefully they don’t shoot themselves in the foot and provide ample supply for the Christmas shopping season.

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