×

It’s not goodbye, it’s hello Magnifi!

You are now leaving a Magnifi Communities’ website and are going to a website that is not operated by Magnifi Communities. This website is operated by Magnifi LLC, an SEC registered investment adviser affiliated with Magnifi Communities.

Magnifi Communities does not endorse this website, its sponsor, or any of the policies, activities, products, or services offered on the site. We are not responsible for the content or availability of linked site.

Take Me To Magnifi

INO.com

INO.com by TIFIN

Is The Dollar Headed Into The Abyss?

Back in January, I attempted to answer the question “Is Dollar’s Dominance Over?”, as the dollar index (DX) had experienced significant losses.
However, we received two conflicting signals from the technical chart, which provided a bearish alert, and the interest rate differentials chart, which indicated support for the dollar.
In both polls, the majority of readers voted that the dollar’s dominance was over and that it had already peaked for the dollar index.
Since then, the DX has made a bounce close to $106 with the support of a hawkish Fed, however these gains proved to be unsustainable, and the price dropped back down to hit the valley established in January, reaching a new low of $100.

Is the dollar headed right into the abyss?
Let’s take a look at some updated charts, starting with the interest rate differentials.
Source: TradingView
This time, I will be using a monthly time frame to provide a closer look at what could potentially cause the dollar to decline.
The majority of real interest rate differentials remain bullish for the dollar, with the orange line representing the gap between the US and UK establishing a new top of 6.15%, and the red line representing the US-Japan gap breaking into positive territory at 3.4% and catching up with the US-EU differential.
However, the US-EU differential represented by the blue line is spoiling the positive outlook for the dollar as it has been falling since its peak of 5% in September 2022. It’s important to note that the euro is the largest component of the dollar index, and this downtrend in the interest rate differential is putting downward pressure on the DX.
The pace of the dollar’s descent may be somewhat exaggerated, as it appears to be based more on an emotional outlook than on current fundamentals as the curve of the blue line is not that steep and the Fed is not yet running out of ammo.

 Loading …
The next chart follows to show the technical outlook.
Source: TradingView
The dollar index futures have now hit a crucial support level, with the orange dashed line on the chart indicating the 2015 high of $101 positioned just above the psychologically significant level of $100.
Additionally, the RSI indicator has reached the critical support level of 50. Indeed, the dollar is on the edge now.
At this crossroads, the dollar faces three potential paths.

The first path, illustrated by the blue arrow, represents a non-stop rise of the dollar towards the upside of the black uptrend line at around $117. This path could be supported by a more aggressive tightening from the Fed, a “flight to safety” scenario similar to the Great Recession of 2008, or a major geopolitical event.
The green path suggests that the upward movement seen in 2021-2022 was only the initial part, and we may witness a second upward movement after a period of consolidation around the current equilibrium. This view is more technical in nature, as it follows the concept that the 2001 peak at $121 should be retested before any major reversal occurs for the DX on a global scale.
The red path indicates that the dollar index futures may continue to weaken due to the growing trend of countries looking to trade without the use of the US dollar. This is reflected in the increasing number of countries expressing their desire to move away from the dollar as the world’s reserve currency.
The initial support level would be at the downside of the uptrend around $94, while the growth point of $89 in the valley of 2021 would be the subsequent crucial support.

 Loading …
Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Is The Dollar Headed Into The Abyss? Read More »

INO.com by TIFIN

Bull or Bear or Neither?

Please enjoy this updated version of weekly commentary from the Reitmeister Total Return newsletter. Steve Reitmeister is the CEO of StockNews.com and Editor of the Reitmeister Total Return.
Click Here to learn more about Reitmeister Total Return

Six months ago, stocks made fresh lows of 3,491. Since then, we have seen a hefty bounce to our current `perch at 4,137.
So are we in still in a bear market…or has the new bull emerged?
That vital discussion, along with our trading plan with top picks, will be at the heart today’s commentary.
Market Commentary
Technically speaking we are still in a bear market. That is because the definition of a new bull market is when the S&P 500 (SPY) rises 20% from the lows. Here is that math:
3,491 October Lows x 20% = 4,189
However, some will say that was only an intraday low and more appropriate to measure based upon the closing low of 3,577 set on October 12. That would mean stocks would need to break above 4,292 to be considered in bullish territory.
The point is that we are getting closer to a bullish breakout. Yet where we stand at this precise moment is a state of limbo which is what creates a trading range.
One could say it’s as wide as the recent lows of 3,855 up to 4,200. But I think most of the near future will be spent in a tighter range of 4,000 to 4,200.

Why Are We in Limbo?
The threat of recession still looms large. This was reinforced Wednesday because the FOMC minutes discussed their fear of recession later in 2023 because of residual damage from banking issues.
On the other hand, we have heard about the threat of recession since early 2022…and it keeps NOT happening.
This has led many traders to not hit the sell button too hard on any whispers of recession. They have been faked out too many times on that in the past only for the market to bounce back ferociously as no recession unfolded.
This is creating an upward bias in the market the last 6 months. Yet will be hard to see too much more upside until the bears are thoroughly convinced that no recession will be in the offing.
Meaning the clear new bull market breakout will not happen until more bears are convinced of an improving forecast. When more of them turn tail and start buying in earnest is when the new bull market will begin.
BUT WHAT IF A RECESSION DOES FORM?
Indeed, those recessionary storm clouds still linger especially as the Fed’s primary goal is to stamp out inflation by “lowering demand”. Lowering demand is just a fancy way of saying they want to slow down the economy.
In a perfect world that is a soft landing near 0% GDP before the economic growth engines restart. In that scenario we have already seen the stock market lows and the next bull market would emerge.
However, just as likely is that all the steps to “lower demand” actually spark a recession with negative growth, job loss and yes, much lower stock prices (below the October lows).
Recent shocking declines in ISM Manufacturing, Service and Friday’s Retail Sales report do paint the picture of an economy potentially tipping over into negative territory. And again, remember that the FOMC minutes did point to their increased concerns that the recent banking issues will be harmful to the economy likely leading to a recession by end of the year.
As long as these serious threats linger, then there will be enough people rightfully bearish to prevent the overall market from heading much higher.
The sum total of this stand off between bulls and bear is a trading range environment likely with serious resistance at 4,200 as was found in February. I don’t even believe the May 3rd Fed announcement has the muscle to change that outcome.
Thus, I could see this trading range scenario in place for a good part of the summer until investors can better determine the true likelihood of recession.
One of the classic investor sayings is that we do not have a stock market as much as we have a market of stocks. Meaning that each individual stock has the potential to rise no matter the overall market environment.
It is much easier to appreciate the virtue of this saying when you understand that over 2,000 stocks were in positive territory in 2022 even as the bear market got its claws into most others. And amazingly over 1,000 of those stock rose 50% or more.
This begs us to always be on the lookout for the very best stocks and funds to outperform. And in my 43 years of investing experience nothing does a better job of that than the POWR Ratings scan of 118 different factors that point to a stock’s likelihood of future success.
So even though I fully appreciate the potential for recession and deeper bear market, I still want to be pinpointing the very best stocks and funds to hold in our portfolio.
What To Do Next?
Discover my balanced portfolio approach for uncertain times. The same approach that has risen well above the pack so far in April.
This strategy was constructed based upon over 40 years of investing experience to appreciate the unique nature of the current market environment.
Right now, it is neither bullish or bearish. Rather it is confused…volatile…uncertain.
Yet, even in this unattractive setting we can still chart a course to outperformance. Just click the link below to start getting on the right side of the action:
Steve Reitmeister’s Trading Plan & Top Picks >
Wishing you a world of investment success!
Steve Reitmeister… but everyone calls me Reity (pronounced “Righty”)CEO, StockNews.com & Editor, Reitmeister Total Return

About the Author
Steve is better known to the StockNews audience as “Reity”. Not only is he the CEO of the firm, but he also shares his 40 years of investment experience in the Reitmeister Total Return portfolio. Learn more about Reity’s background, along with links to his most recent articles and stock picks.

Bull or Bear or Neither? Read More »

INO.com by TIFIN

Buy-The-Dip Stocks For Silver Exposure

For the past two years, investors in the precious metals complex have watched nearly every commodity race higher, with oil, coffee, orange juice and copper up significantly from their 2021 lows.
Unfortunately, gold (GLD) and silver (SLV) were both left in the dust after topping in August 2020 and February 2021, respectively.
And for investors looking for leverage to the metals, the corrections were even more painful in the mining stocks, with the GDX sliding over 50% from its highs above $45.00 per share set in August 2020.
Fortunately, we’ve since seen a reversal to this trend. Not only is gold knocking on the door of a new all-time high, but silver is outperforming over the past month, up over 35% from its lows after making a new year-to-date high above $25.00/oz.
This has lit a fire under several silver miners, with their margins set to improve by over 50% based on AISC margins of ~$6.00/oz in FY2022, and the potential to enjoy margins closer to $9.00/oz if the silver price averages $25.00/oz this year.

In this update, we’ll look at two silver miners that are still trading well off their 2020/2021 highs and look to be solid buy-the-dip candidates:
Pan American Silver (PAAS)
Pan American Silver (PAAS) is a $7.0 billion gold and silver producer with a production profile of approximately ~1.5 million gold-equivalent ounces [GEOs] after acquiring Yamana’s South American assets last year.
This makes it one of the largest producers sector-wide and the acquisition solidifies its spot as a top silver producer, with the company expected to produce ~28 million ounces of silver in 2024, and this excludes the massive Escobal Mine which has the potential to produce ~20 million ounces of silver if it is restarted.
The major benefits of the acquisition were that Pan American improved its diversification by adding new assets in Brazil (Jacobina), Argentina (Cerro Moro), plus two assets in Chile (El Penon, Minera Florida).
Notably, these assets are lower-cost than Pan American’s current production profile, and the company also added a majority stake in the MARA Project in Argentina, a massive copper-gold-molybdenum project that is capable of producing 530 million copper-equivalent pounds on a 100% basis. This is equivalent to $1.2 billion in annual revenue or ~600,000 gold-equivalent ounces.
Despite this significant upgrade to the investment thesis following the acquisition of most of Yamana’s assets, Pan American Silver continues to trade at a lower valuation than it did at its peak in August 2020, yet it’s added over $4.0 billion in net asset value. This is a significant disconnect and Pan American Silver continues to be one of the cheapest ways to get silver exposure, with the company trading at barely 3x sales assuming we see no further upside in metals prices.
Plus, there are multiple projects not accounted for in FY2023 sales and cash flow estimates, including Escobal, MARA, La Arena Sulphides, and La Colorada Skarn, with a combined value for these projects of more than $3.0 billion [US$8.00 per share].
Based on what I believe to be a fair multiple of 11.0x cash flow and FY2024 cash flow per share estimates of $2.48, I see a fair value for PAAS of $27.30, pointing to 43% upside from current levels.
In addition, investors are getting an attractive ~2.0% dividend yield at current levels, pushing the total return closer to 45%.
So, with over 40% upside to fair value to its 18-month target price, and this not accounting for an impressive development portfolio (and or assets in care & maintenance), I see PAAS as one of the sector’s best buy-the-dip candidates, and I would view pullbacks below US$17.10 as buying opportunities.
Wheaton Precious Metals (WPM)
Wheaton Precious Metals (WPM) is a $23.0 billion company in the precious metals space and is arguably the premier way to play the silver sector.
This is because it boasts scale, capital discipline, and diversification, with its President and CEO, Randy Smallwood, being involved in the founding of WPM as its EVP of Corporate Development.
Since it was founded in 2007, Wheaton Precious Metals has seen its revenue increase from $160 million to ~$1.1 billion, and the company should see a record year in 2024 with the potential to generate revenue of $1.35 billion and over $700 million in free cash flow.
Looking at the FY2024 free cash flow estimates (~$700 million) and its current market cap, many investors may quickly jump to the conclusion that WPM is very expensive, with it trading at more than 30x free cash flow.
However, this is a superior business model to producers with considerable leverage in a rising metals price environment, and the company is sitting on one of the strongest balance sheets sector-wide with nearly $1.0 billion in cash.
The reason for its superiority vs. producers is that Wheaton Precious metals does not actually produce metals, it instead makes an upfront payment in exchange for the right to purchase a portion of production over the life of mine of its partner’s assets.
For example, WPM has the right to buy 50% of silver produced at Cozamin for a payment of just 10% of the spot price ($2.50/oz at a $25.00/oz silver price).
The benefits to this business model is that Wheaton Precious Metals is insulated from inflation on operating costs as well as capex inflation, and it is much more diversified than the average producer with streams on over thirty assets globally.
Based on what I believe to be a fair multiple of 28.0x cash flow and FY2024 cash flow per share estimates of $2.10, I see a fair value for WPM of $58.80, translating to over 17% upside from current levels.

However, this fair value could rise to north of $65.00 per share if metals prices continue their upward trajectory, and these cash flow per share estimates do not include new projects set to come online in 2025 with WPM being one of the better growth stories in the royalty/streaming space.
So, with a diversified portfolio, an experienced team and upwards of $2.5 billion in liquidity to scoop up new streams, I see WPM as one of the safest ways to play the sector.
That said, I see the ideal buy zone being $42.00 or lower, meaning that the best way to play the stock is to wait for a correction.
Several precious metals stocks have rallied sharply over the past few months, but the key is separating the wheat from the chaff.
And while many might seem to have solid growth stories, the track records in the sector are dismal at best and there are only a few names that are truly investable.
So, for investors looking for silver exposure, I see PAAS and WPM as two of the best names to buy on dips.
That said, both stocks have seen strong runs, so while they belong at the top of one’s watchlist, I would be waiting for a sharp pullback to start a new position.
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

Buy-The-Dip Stocks For Silver Exposure Read More »

INO.com by TIFIN

What Happened To Reducing The Fed’s Balance Sheet?

Over the past year the Federal Reserve has driven up interest rates by nearly 500 basis points in its quest to try to tamp down inflation.
From a range of 0.25%-0.50% back on March 17, 2022, the Fed since then has steadily raised its target for its benchmark federal funds rate to 4.75%-5.00%, with the possibility of more to come. Over that time the Fed has raised rates nine times—four times by 75 basis points, twice by 50 bps, and three times by 25 bps.
At its two most recent meetings, in February and March, the Fed raised rates by only 25 bps each, possibly because it saw fit to take a slight pause and measure the effect of all these rate increases to see if they are having the desired effect of slowing the economy in order to bring down inflation.
Of course, as we know, the rate hikes haven’t done a whole lot in reining in inflation.

Rather, they created a panic among some fairly large regional banks that has unsettled the entire banking industry, the effect of which has done more to slow the economy than raising rates has done.
Should the Fed then say that the ends justify the means, even if the means—creating the panic—were totally accidental? Should the Fed now brand its “policy normalization” program a success even if a couple of banks failed in the process? Let’s hope not.
This fiasco does call attention to the other prong of that normalization process, namely a reduction in the Fed’s massive balance sheet, which was supposed to help raise long-term interest rates gradually and lessen the Fed’s presence in the U.S. economy.
On that score, there has been negligible progress.
Back in the good old days, before the 2008 financial crisis, the Fed’s balance sheet never totaled more than $1 trillion, a figure that now looks fairly quaint, yet it was a mere 15 years ago.  
Then, of course, Lehman Brothers failed, residential real estate prices crashed, millions of people lost their homes, and the Fed in just a few weeks had pumped enough money into the economy to raise its balance sheet to more than $2 trillion by the end of that year.
But that was only the beginning. Over the next several years, as the economy had trouble growing more than 1% a year, the Fed more than doubled its government and mortgage bond portfolio to more than $4 trillion. Then came the Covid-19 shutdown, and between February 2020 and the middle of last year the balance sheet had more than doubled again, to just under $9 trillion, at which time the Fed said it would start trimming it.
While the balance sheet has indeed come down, it’s certainly debatable if enough progress has been made on this score. Indeed, just as the Fed started to make some minimal progress in reducing its portfolio, it has started to increase it again.
The balance sheet hit a peak of just under $9 trillion last July, at which point it started to recede gradually, falling to $8.3 trillion early last month.
But then guess what happened? The Fed found itself blindsided by the SVB banking crisis it had largely created itself, had to pump more money into the economy to calm nervous depositors and investors, and before you knew it the balance sheet was back up to $8.7 trillion by the end of the month.
So, while the Fed has squarely focused all of its vaunted “tools” on raising short-term interest rates, it hasn’t made any commensurate progress on raising long-term rates by reducing its balance sheet.
Indeed, it appears to be artificially “propping down” long-term rates by insisting on having such a gigantic bond portfolio, which continues to distort conditions in the bond market.
If the Fed was as serious as it claims to be in “normalizing” interest rates, it could do a lot more. But then it probably would trigger another crisis and have to intervene in the markets yet again.

The Fed’s next monetary policy meeting is scheduled for May 2-3. Right now it’s difficult to bet what its next move will be.
Some expect another 25 bp hike, some believe the Fed will stand pat and make no change, while still others are hoping the Fed will “pivot” and actually lower rates if there is enough evidence that its previous rate hikes have finally put a meaningful dent in inflation.
I think that’s a little too much wishful thinking, and would not be surprised by another 25 bp hike.
However, what would be welcome would be some kind of announcement that the Fed is taking a closer look at putting a significant dent in its balance sheet.
With long-term Treasury bond yields so low, it’s doubtful that such a policy move would unsettle the markets too much. But it might have an impact on raising long-term rates, thereby reducing inflation while guiding the economy to a soft landing.
George YacikINO.com Contributor
Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

What Happened To Reducing The Fed’s Balance Sheet? Read More »

INO.com by TIFIN

How To Profit Now That Gold Is Back

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

Investors are betting on further increases in the price of gold after it touched a 12-month high in late March.
The reasons are twofold: first, the Federal Reserve’s cycle of interest rate rises appears to be over (despite oil rising again), and second, gold makes for a safe haven during banking sector turmoil.
Aakash Doshi, head of commodities for North America at Citigroup, told the Financial Times there had been a surge in investor activity in recent weeks. “The big catalyst has been the stress in the regional banking system in the U.S.… [and] it has been pretty much one-directional buying,” he said.
March was set to be the first month of net inflows into gold ETFs for 10 months. In addition, the volume of bullish options bets tied to gold funds has approached record levels.
Call options are a bullish bet that give investors the right to buy assets at a set price at a later date. By late March, the five-day rolling volume of call options on the SPDR Gold Trust ETF (GLD) had surged more than five-fold since the start of the month.
There was a similar increase in interest in CME’s gold futures and options tied to them, including deep “out-of-the-money” options, which would only pay out if the gold price hits new all-time highs.
And it’s not smaller investors or speculators jumping onto the gold bandwagon. Over the past few years, a key source of demand has been central bank buying. Between 2020 and 2022, central bank purchases went up 4.5 times!
Financial advisors sometimes recommend having some gold as an insurance policy against financial markets calamities.
So, let’s say you do want to add some gold to your portfolio. Then you face the choice between whether to go with a physical gold ETF or with an ETF that focuses on gold stocks.
Our colleague Serge Berger discussed this recently — is physical gold better, or gold stocks?
We thought we’d do a comparison of the two ETFs Serge talked about — the aforementioned GLD and the VanEck Gold Miners ETF (GDX). The quick and easy way to do this is to ask Magnifi Personal to run the comparison. It’s as simple as asking this investing AI to “Compare GLD to GDX.”

This is an example of a response using Magnifi Personal. This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including INO.com’s relationship with Magnifi.
As you can see, over three years GDX is (not surprisingly) more volatile, but its returns are greater than for GLD. So, it looks to be a wash. Just make sure you have some monies in gold for protection.
This is just a starting point, of course. Magnifi Personal can easily compare several stocks or ETFs on more criteria, such as dividend payments, turnover, volume, and so on. Magnifi Personal makes research like this as simple as typing in a question.
To have Magnifi Personal run similar comparisons for you, or to dive deeper into this one and compare the two Gold stocks using different criteria, click here.
This ability to have an investing AI pore over reams of data for you in seconds and spit out an easy-to-understand comparison of two or more stocks is an invaluable tool in deciding where to invest next.
We recommend you try it out. Click here to see how.
Latest from Magnifi Learn: Financial literacy is a fundamental aspect of wealth management and security. Since April is Financial Literacy Month, we’ve decided to devote today’s segment entirely to the topic!

INO.com, a division of TIFIN Group LLC, is affiliated with Magnifi via common ownership. INO.com will receive cash compensation for referrals of clients who open accounts with Magnifi.
Magnifi LLC does not charge advisory fees or transaction fees for non-managed accounts. Clients who elect to have Magnifi LLC manage all or a portion of their account will be charged an advisory fee. Magnifi LLC receives compensation from product sponsors related to recommendations. Other fees and charges may apply.
Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.
Mutual Funds and Exchange Traded Funds (ETFs) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

How To Profit Now That Gold Is Back Read More »

INO.com by TIFIN

US Treasury Touches “Crypto-waters”

On 6th of April, the U.S. Department of the Treasury published the 2023 DeFi Illicit Finance Risk Assessment, the first illicit finance risk assessment conducted on decentralized finance (DeFi) in the world. The assessment considers risks associated with what are commonly called DeFi services.
The document is 42 pages long. This report looks at how criminals are using DeFi services to move and hide money illegally. DeFi services use technology called blockchain and smart contracts to allow people to make transactions without banks or other financial institutions.
However, many DeFi services are not following the rules meant to stop money laundering and financing terrorism. Some DeFi services are trying to avoid these rules by claiming to be fully decentralized, but this doesn’t excuse them from following the rules.
The report recommends improving the rules and regulations for DeFi services to make sure they follow the laws and don’t help criminals.

The cryptocurrency market may face regulatory scrutiny as authorities look to increase oversight on digital assets, so be informed and prepared for real bombshells in the not so distant future.

 Loading …
I would love to see your comments on this news.
Let me update some crypto charts to snapshot what’s going there. The comparison chart of major cryptos vs. the market follows below.
Source: TradingView
The primary cryptocurrency, BTC (orange line), has outperformed both the second-largest cryptocurrency, ETH (black line), and the overall cryptocurrency market excluding BTC and ETH (blue line) year-to-date. It has gained almost 68% compared to 54% for the second largest crypto (ETH) and only 28% for the total crypto market excluding BTC and ETH.
It appears that the cryptocurrency market has matured over time, with various scams and market busts occurring, as well as new cryptocurrencies emerging and then fading away.
However, two of the original cryptocurrencies, BTC and ETH, continue to remain strong and dominant. Despite the growth of these major players, the rest of the market seems to have reached a plateau, with less trust in the market as indicated by the flatness of the blue line.
The dominance chart is the next.
Source: TradingView
The chart clearly shows that the main coin has made significant progress in terms of market share, hitting a peak of 48% in July 2021.
The next barrier to overcome is the middle of the range at 57%, which could further solidify its position as the trusted “first child” of the crypto market.
On the other hand, Ethereum’s market dominance has remained flat at 20%, with little movement over the past two years.
The final chart depicts the total crypto market below.
Source: TradingView
The total crypto market cap, which is currently slightly above $1.1 trillion, has been showing small volatility for the past three months around the strong barrier close to $1.2 trillion. Although the cap recently tested this mark again, it has remained unbroken so far.

We can observe a similar scenario that occurred last August, where the market faced a strong resistance near the $1.2 trillion mark, which eventually led to a rejection and a collapse in the crypto market cap.
However, the current situation is the second attempt to break this barrier, and if successful, the market could potentially double to reach $2.2 trillion. This level is significant as it intersects with the top of the Right Shoulder of the former Head & Shoulders pattern (blue dotted line) and the broken Neckline (purple dashed line).
On the downside, there is a limited risk as the market has established a double valley at $727 billion, which acted as the lows of 2022.

 Loading …
Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

US Treasury Touches “Crypto-waters” Read More »

INO.com by TIFIN

AI Technology Taking Heat

When ChatGPT hit the scene a few months back, the rip-roaring rally for anything artificial intelligence related was on.
Fast forward to today, and said rally has flamed out rather quickly. Not only have the artificial intelligence-related stocks begun to give back their gains received during the rally, but there is a national backlash swirling across the US.
In Washington, both Congress and the President are questioning whether artificial intelligence is a good thing. President Biden recently said, “Technology companies have a responsibility to make sure their products are safe before making them public.” He was asked if AI was dangerous and responded, “It remains to be seen. Could be.”
Even Congress is looking into AI and its safety. A nonbinding measure was recently introduced by Rep. Ted Lieu, D-Calif., which will direct the house to look into artificial intelligence.

Interestingly enough, the bill was actually written by the chatbot ChatGPT, which really put AI in the spotlight.
ChatGPT became a household name and really started the AI rally on Wall Street after it was announced the popular website BuzzFeed was planning to use the chatbot to write articles and create content. This occurred on January 26th, 2023. AI technology began to come under fire at the end of March, early April 2023.
Although, even at the beginning of the ChatGPT explosion, some experts and journalists were already calling out ChatGPT for returning historically inaccurate information when asked basic questions. These mistakes raised concerns, even during the beginning of the AI hype, about how trustworthy artificially intelligent machines’ answers would be.
The answer is only as reliable as where the answers are originally coming from.
See, the way ChatGPT and other chatbots work is that they just pull data from one place on the internet and give it to you in the form of an answer or article. Think of it like a Google search, but the answer is more specific, and there are only one, not thousands, for you to choose from.
And there lies the problem.
With an AI chatbot, we all want it to be correct with each and every answer. But how does it know the correct answer when it’s pulling data from sources that aren’t always correct?
Furthermore, what is even more freighting is if someone else wants the chatbot to give you an incorrect answer. Or perhaps even worse, someone wants to manipulate the way you think and your beliefs using a chatbot. The way people say Russians or others manipulated US elections using social media platforms.
There are a lot of things to consider when it comes to artificial intelligence projects and how safe they truly are at this time and will continue to be in the future.
However, at this point, Pandora’s box is open, so it’s hard to see a future without AI in some form or fashion. With that being said, let’s look at a few exchange traded funds that you can buy now, while you wait for AI to dominate the world!
The first one I would like to point out is the ARK Autonomous Technology & Robotics ETF (ARKQ). This fund invests in several different futuristic technologies, making it good for any investor.
While you wait for AI technology to explode, ARKQ’s holdings in autonomous driving or some other innovative technology may take off. The infamous Kathy Woods runs the fund, and despite her poor performance in recent times, she has a proven track record over the years.
A few of the other ETFs are the Global X Robotics & Artificial Intelligence ETF (BOTZ), the iShares Robotics and Artificial Intelligence Multisector ETF (IRBO), and the First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT).

While the ARKQ ETF is focused on several different innovative technologies, AI being one of them, along with robotics, these three focus solely on AI and robotics. From a performance standpoint, all four ETFs are up double digits year-to-date. ARKQ and BOTZ have 37 and 44 holdings, respectively, while IRBO and ROBT have 119 and 112, respectively.
ARKQ is also the most expensive fund at 0.75% expense ratio, while BOTZ charges 0.69%, IRBO is the cheapest at 0.47%, and ROBT charges 0.65%. BOTZ is the largest fund with $1.75 billion under management, ARKQ is second with $922 million, then IRBO with $303 million, and ROBT with $237 million.
The biggest question you need to ask yourself is whether or not today is the best time to buy any AI-related stock. AI had its rally in late January, and now it’s getting hit. So is today the best time to buy, or will prices fall in the future, giving you a better buying opportunity?
I honestly don’t know. But, what I am sure of, is that AI technology is here to stay, and at some point, you should own some companies that operate in the AI space.
Leave me your thoughts below about whether today is a time to buy or wait on AI stocks.
Matt ThalmanINO.com ContributorFollow me on Twitter @mthalman5513
Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

AI Technology Taking Heat Read More »

INO.com by TIFIN

Buy Zones For These Two Small-Caps

It’s been a solid year so far for the major market averages, with the market up 7% year-to-date, a solid rebound after what was a brutal year in 2022.
However, the small-cap universe hasn’t fared nearly as well, with the Russell 2000 Index (IWM) barely in positive territory.
I attribute some of this underperformance to the relatively high weighting of regional banks in the index, which were hit hard following fears of bank runs.
Fortunately, this underperformance has left some small-cap names trading at deep discounts to fair value, and one has been stuck in the mud despite the significant metals price increases in the precious metals sector.
In this update, we’ll look at two small-cap names becoming more reasonably valued, and where I see their ideal buy zones.

Buckle Inc. (BKE)
Buckle Inc. (BKE) is a $1.7 billion company in the Retail-Apparel industry group that was one of the market’s best performers last year as it raced towards its multi-year highs near $50.00 per share.
However, the stock has since pulled back over 30% from its highs, and found itself back near key support at the $30.00 level.
For those unfamiliar, Buckle has over 440 stores in the United States and specializes in jeans, other apparel, footwear, and accessories.
The company released its Q4 2022 results (three months ended January 28th) last month and reported net sales up 5.5% year-over-year to $401.8 million. Meanwhile, quarterly earnings per share were up 3% to $1.78, while full-year EPS came in at $5.13, down just 1% from the year-ago period.
Despite this performance being impressive given the sharp decline in earnings we saw from several other retail names, the focus appeared to be on the weaker than hoped February sales numbers, with Buckle reporting a 6.9% decline in comparable sales.
However, it’s important to note that the company was lapping near very tough comps with a 33% increase in the February 2022 period.
Plus, commentary on the Q4 Call was not bad as Buckle noted in its prepared remarks that it is managing inventory well, it continues to work on store remodels and technology upgrades, and it plans to open six new stores in FY2023, pushing its total closer to 450 stores.
Just as importantly, Buckle continues to benefit from full-priced selling with minimal promotional activity, a positive sign relative to some peers which have had to liquidate inventory to make up for misjudging consumer demand last year.
Unfortunately, annual EPS is forecasted to decline this year slightly after it nearly doubled from FY2020/FY2021 levels, with current FY2023 estimates sitting at $4.85, translating to a 6% decline year-over-year.
While this isn’t ideal, and it’s often best to stay away from stocks that have seen peak EPS and it’s now rolling over, Buckle is currently trading at just ~7.1x forward estimates and that’s not including ~$290 million in cash ($5.80) and over $340 million returned to shareholders last year.
So, with industry-leading shareholder returns (regular dividends and special dividends), a significant discount to its historical multiple (7.1x earnings vs. 11x earnings), and a strong balance sheet, I would view any pullbacks below $31.60 as buying opportunities. Even using a lower multiple of 9.0x earnings, I see a fair value for the stock of $43.65.
Gold Royalty Corporation (GROY)
Gold Royalty Corporation (GROY) is one of the more newly listed names in the precious metals market, having had its IPO debut in Q1 2021 during a difficult period for the Gold Miners Index (GDX).
The stock has since sunk over 70% from its highs above $6.60 per share, a decline that has shaved more than $400 million in market cap off the stock.
However, I see this decline and underperformance having more to do with the stock being overvalued post-IPO debut because of high interest in a new royalty/streaming company available to invest in, and less to do with its fundamentals.
In fact, royalty/streaming companies have never been more attractive from an investment standpoint for investors looking to increase their exposure to precious metals given that the inflationary environment has eroded the profits of many producers.
However, royalty/streaming companies like Gold Royalty Corporation have net profit interests [NPI] or net smelter returns [NSR] on several mine projections, insulating them from inflation on operating costs and capital expenditures.
Meanwhile, they are lower-risk given that they’re more diversified than operators, with Gold Royalty Corporation having over 200 royalty assets and five in production, with the latter figure likely to increase to closer to 15 by 2029.
To put this in comparison, even the larger gold producers typically have less than 8 gold mines and they have seen margin compression because of rising labor and consumable costs, meaning that royalty companies provide exposure to gold and silver without the risk of inflation.
In Gold Royalty’s case, the company has two cornerstone assets held by the #2 and #3 largest gold producers, with these assets being the Ren deposit and Odyssey Underground in Ontario and Quebec (Canada), respectively.
The royalty ground on each mine could ultimately have over 5.0 million ounces of gold combined attributable gold, translating to over $200 million in future revenue from these two assets alone. Hence, if this weakness persists, I would view GROY as a potential takeover target.

Based on ~166 million fully diluted shares and a share price of US$2.15, Gold Royalty Corporation has a market cap of US$357 million, which might make it look expensive at first glance given that it expects to generate just ~$6.0 in revenue this year, leaving it trading at nearly 60x sales.
However, FY2023 revenue doesn’t do the company justice, with it having multiple assets not yet in production that could become significant contributors post-2025. Meanwhile, revenue should increase materially in 2024, with commercial production at Cote in Ontario and Odyssey in Quebec.
Given the significant upside that isn’t reflected in the company’s current financial results (as it has development stage assets that should head into production by 2025), I believe the best way to value the company is on a P/NAV basis.
Using what I believe to be a fair multiple of 1.0x NAV and an estimated net asset value of $510 million, I see a fair value for the stock of $490 million; I see a fair value for the stock of US$3.05. This translates to over 40% upside from current levels, and investors also receive an attractive ~2.0% dividend yield. So, for investors looking for exposure to gold, I see GROY as a Buy if it drops below US$2.00.
Disclosure: I am long GROY
Taylor DartINO.com Contributor
Disclaimer: This article is the opinion of the contributor themselves. Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information in this writing. Given the volatility in the precious metals sector, position sizing is critical, so when buying small-cap precious metals stocks, position sizes should be limited to 5% or less of one’s portfolio.

Buy Zones For These Two Small-Caps Read More »

INO.com by TIFIN

Weighing Two Drug Titans Against Each Other

Editor’s Note: Our experts here at INO.com cover a lot of investing topics and great stocks every week. To help you make sense of it all, every Wednesday we’re going to pick one of those stocks and use Magnifi Personal to compare it with its peers or competitors. Here we go…

According to recent reports, the World Health Organization (WHO) may for the first time include drugs that combat obesity on its “essential medicines list,” which is used to guide government purchasing decisions in low- and middle-income countries.
This will only add to the buzz around these drugs, which is approaching the levels surrounding artificial intelligence (AI) and chatbots like GPT-4.
Despite the hype, we believe investors are right to be excited about the drugs.
These drugs will find a quickly growing market from expanding waistlines. That’s because obesity is growing in tandem with rising global prosperity. A bad side effect of prosperity is that consumption of not-so-healthy foods rises a lot, as does the prevalence of occupations requiring less physical work.
Obesity already affects about 650 million people around the world. America’s waistline is among those rapidly expanding—almost half of Americans will be obese by 2030, a Harvard study found. It also estimated that about 18% of healthcare spending would then go to related conditions of obesity.
No wonder, then, that Morgan Stanley thinks the market for weight-management medicines could reach $54 billion in just seven years—with $31.5 billion of this from the U.S. alone.
Companies behind the new obesity drug treatments are flying high:
Novo Nordisk (NVO) — the dominant player in diabetes treatments — generated $2.4 billion in sales from obesity treatments last year. And it has barely started to widely distribute its new obesity drug, Wegovy. Its shares are up 43% over the past year, and 15% year-to-date.
Eli Lilly (LLY), whose diabetes drug, tirzepatide, should get regulatory approval to treat weight loss this year, has seen its stock price rise 17.5% over the last year, although it is down 7% year-to-date.
So, we thought we’d do a comparison of the companies. The easiest way to do that is to ask Magnifi Personal to do it for us. It’s as simple as asking this investing AI to “Compare NVO to LLY” and selecting a three-year timeframe.
You can do it, too. Want a 90-day free trial? Just click here.
Here’s the result:

This is an example of a response using Magnifi Personal. This image is not a recommendation or individual advice. Please see bottom disclaimer for additional information, including INO.com’s relationship with Magnifi.
As you can see, over three years, NVO comes out on top in terms of both returns and volatility.
This ability to have an investing AI pore over reams of data for you in seconds and spit out an easy-to-understand comparison of two or more stocks is an invaluable tool in deciding where to invest next.
We recommend you try it out. Click here to see how.
Magnifi Personal makes research like this as simple as typing a question. You can easily do this yourself, or ask Magnifi Personal to add other measures to the comparison, including dividend, valuation metrics such as P/E or P/B ratios, gross margin, and more. Just click here to get a free trial!
Latest from Magnifi Learn: As the world becomes increasingly connected online, cybersecurity will become a critical element of personal and national security.

INO.com, a division of TIFIN Group LLC, is affiliated with Magnifi via common ownership. INO.com will receive cash compensation for referrals of clients who open accounts with Magnifi.
Magnifi LLC does not charge advisory fees or transaction fees for non-managed accounts. Clients who elect to have Magnifi LLC manage all or a portion of their account will be charged an advisory fee. Magnifi LLC receives compensation from product sponsors related to recommendations. Other fees and charges may apply.
Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.
Mutual Funds and Exchange Traded Funds (ETFs) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

Weighing Two Drug Titans Against Each Other Read More »

INO.com by TIFIN

Gold And Tesla: Bulls Check Barriers

Last month, I presented three potential scenarios for the future price of gold in an earlier Gold Update.
In the poll, most of you chose the green path, which suggested an extended period of consolidation for the yellow metal. However, it appears that the blue (straight bullish) and black (similar to the pattern observed in 2017) paths are more accurate, as the green path is no longer viable.
Source: TradingView
In just two weeks since the last update, the price of gold futures has increased by $160 or nearly 9%, reaching a high of $2,015 on March 20th. This surge in price caused the previous top at the blue B point of $1,975 to be broken, but the price has since been consolidating around this level.

The price of gold futures has formed a triangle pattern (purple) characterized by falling peaks amid rising valleys. The size of the pattern is relatively small, and last week, the price attempted to break out of the pattern to the upside but was unsuccessful.
As a result, the upside potential of the move may be limited due to the small amplitude of the pattern.
Based on the black dashed uptrend channel, the resistance around $2,100 could limit the upside potential for gold futures.
The black path, which is based on a 2017 sample, suggests that the move to the upside may reach up to 73% of AB move. To illustrate this, 73% of AB move has been added to the chart, and it is located at $2,072, which is slightly below the uptrend’s resistance around $2,100.
In order for the price of gold futures to continue its bullish momentum, it will need to break through the double barrier mentioned earlier. This will clear the path for the blue target of $2,170.
However, if the triangle pattern breaks down, it could trigger a bearish move and lead to a test of the downside of the uptrend at around $1,870. It remains to be seen which path gold will take in the coming days and weeks.

 Loading …
Back in November 2022, I identified a bearish Head & Shoulders pattern in Tesla’s chart in my post titled “These Stocks Are Falling Knives”.
At the time, the stock was priced at $207, and I predicted a bearish movement. The majority of readers chose the conservative target of $120, which turned out to be the closest call as the stock hit a valley of $102 in January of this year. Congratulations with a huge gain.
The tables have turned, as can be seen in the following weekly chart of Tesla’s stock.
Source: TradingView
The stock price has experienced a sharp reversal, forming a V-shape pattern after reaching a low point of $102 at the beginning of the year. The Tesla price has approached the earlier broken Neckline (gray dotted trendline) of the Head & Shoulders pattern in the middle of February, but at that time, a test and breakout were not detected.

Instead, the price experienced a sharp drop from the top of $218 down to $164, retracing about half of the gains from the earlier valley.
As of now, the Tesla stock price is experiencing a strong bullish momentum, with it already surpassing the $200 handle once again. However, this time the Neckline barrier is stronger with the presence of the moving average (purple) at around $227. In order for the market to clear the path to the first bullish target of $314, the price needs to overcome this reinforced barrier.
The Relative Strength Index (RSI) is currently indicating a bullish trend as it has crossed above the key level of 50 and is continuing to move higher. This is a positive sign for the stock and suggests that the buying pressure is gaining momentum.
The support level for Tesla is now at $164, while the ultimate target is the all-time high of $414.

 Loading …
Intelligent trades!
Aibek BurabayevINO.com Contributor
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Gold And Tesla: Bulls Check Barriers Read More »