🗞️The Wrap: Flat-Footed

Dollar bills are getting exxy, the investing Gods are being humbled, and we’ve got that LVMH hand sanitiser. Plus, another show off with a 5x volatility buy.

5 Stocks (somehow) Reaching 52 Week Highs

  • ATN International (ATNI) +96.1% in the last week
  • AMN Healthcare (AMN) +18.8%
  • Quidel Corp (QDEL) +15.7%
  • Land’s End (LE) +14.0%
  • Shenandoah Telecommunications (SHEN) +13.4%

Greenback Boogie

You may not have noticed but there’s a subtle force stabilising your portfolio right now. For some, their gains are multiplied. For others, their losses are being trimmed. Benjamins are getting pricier as the USD gains relative to the Aussie, the Pound and pretty much all currencies.

The USD is up 32% relative to AUD since Stake launched in Australia in late 2017, rewarding those who have been investing for a while. It’s even up 10% in the last month. Similarly, the greenback buys 7% more pounds since our launch in January. Just a little something to take the edge off.

Trading isn’t all about traditional equities. We hear the success stories around volatility and inverse products but there are so many macro level products made available through ETFs. These sort of products can have a really low beta, meaning drops in the S&P don’t have a huge effect.

Short the euro? Try this. Feeling short on long-term bonds? We got you. Oil unsustainably low? Lever up.

Flat-Footed

Don’t beat yourself up if your portfolio is flashing red, it happens to the best of them. Ray Dalio’s Pure Alpha Fund is estimated to have lost 20% of its value in the past month as the mind behind some of the most sophisticated portfolios admits to being caught “flat-footed” by the virus.

We’ve all been in the position before. We predict something but don’t back it up with the relevant positions. Dalio predicted a tumultuous period for markets last year (COVID simply accelerating underlying issues) but unwinding a US$160b portfolio is not easy and Bridgewater now has the battle scars to prove it.

The guy is still a genius and deserves to be respected. Here’s some further reading affording us a look into his mind: as interest rates around the world approach zero and the power of central banks is thrown into question, Dalio endorses a new form of policy called MMT. Click here to read Dalio’s predictions for the next era of monetary policy.

Top 5 Gainers

  • Novagold (NG) +82.5% in the last week
  • Osisko Gold Royalties (OR) +58.1%
  • B2Gold (BTG) +53.1%
  • Gold Fields ADR (GFI) +53.1%
  • Xencor (XNCR) +37.8%

Gold’s rebounded

Top 5 Fallers

  • Performance Food Group (PFGC) -68.4% in the last week
  • New York Mortgage Trust (NYMT) -64.1%
  • Aercap Holdings (AER) -61.4%
  • Capri Holdings (CPRI) -60.9%
  • EPR Properties (EPR) -59.6%

Henny and Hand Sanitiser

Luxury manufacturers Rolls Royce and LVMH (Louis Vuitton, Moët, Hennessy) are expanding their horizons. In an effort to combat the outbreak, they will begin production on medical equipment such as ventilators and sanitisers respectively. The English and French governments have been innovating in an effort to gear the nation’s output towards a response.

It’s by no means a new idea. While it is reminiscent of war time production shifts, Apple manufacturers in China were forced to produce facial masks instead of FaceID hardware last month.

So when you’re finally allowed back on a Boeing, know that the same machine that made the engine probably saved scores of lives too.

What We’re Watching | Exponential Growth and Epidemics

For the nerds not yet sick of all the COVID headlines, here’s an awesome video going around Stake’s Slack channels..

It may be obvious to the mathematicians but is really interesting for us mere mortals. It explains the mathematics of an outbreak. Just how quickly it can grow and when peak virus is reached. If you want something a little more in-depth, check out this one by an Aussie-born Canadian scientist with a bit more rigour. Let’s see if it lives up to its title and changes “how you see the world”.

Trader Teaser

10, 45, 15, 38, 20…
What’s next?

Best Buy | TVIX +466%

There are a few people in this boat. While some readers may be sick of seeing these traders, but up 5x? Credit where credit is due.

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