This Week in Barrons: 2.23.2025

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• Everything, All-at-Once, at Any time … The smartphone is the most expensive device that most people own, and certainly the one that they most often use.  You can browse everything you can’t have, can’t afford, don’t need, and won’t get – right in the palm of your hand.  Any argument is simply one click away.  It holds every piece of news you never imagined – and that’s because much of it IS imagined.  Who knew that simply connecting would be powerful, magical, un-nerving, manipulative and addictive?  [I suspect Google, Meta, and ByteDance knew.]

• “What’s love got to do with it?” … We all know that an expensive watch isn’t purchased to tell time – just as wedding food isn’t there to keep the guests from going hungry.  Per Seth Godin: Often our focus, energy, and money are spent on disguising transactions – when in fact we’re really buying affiliation, status, and/or ‘fear insurance’.

• Why don’t we just do what makes us happy?  Because successful outcomes often follow an unpredictable series of events.  FYI: If we allow ourselves to do things that might not work, we’re far more likely to discover the things that do.  And that is an action worth repeating.

• BofA strategist Michael Hartnett declared that investors are … “Long stocks, and short everything else – and that’s a problem.”  

• WIIFM = What’s in it for Musk?  For career politicians, it’s the life they chose.  For Trump, it’s about power and securing his legacy.  With Elon’s latest DOGE commitment, I don’t see how he wins – and that’s a problem if the world’s richest person has ZERO upside.  I see Trump basically making a risk-free trade.  If Elon’s successful, Trump will get the credit.  If he fails, Elon will get thrown under the bus.  I can’t see a way where everything Elon touches (from here forward) – isn’t colored by his governmental activity.  That means that his legacy will forever have an asterisk, and there’s nothing worse than the dreaded asterisk.

• The DOJ and DOGE are starting to look over Medicare billing … because of instances like: (a) a common blood thinner can be purchased for $435 at Walgreens with insurance, or for $45 at a cost-plus pharmacy.  (b) A popular cancer medication costs $17 through a cost-plus pharmacy, or $2,200 via their health insurance provider.  [I can’t even imagine the number of middle-men it takes to get from $17 to $2,200 for the exact same medication.]

• The Circle of Life …  Humane, the startup that claimed its AI pins would take over the world – well, the world never got the memo.  Humane was euthanized by HP last week who purchased their assets for 10 cents on the dollar.  Customers of the company are screwed because their pricey devices will be shut-down on February 28.

• In just 3 weeks, DeepSeek reached 22m daily active users … more than 40% of ChatGPT's total active user base.  And Perplexity just released its ‘Chinese Censorship-free Version’ == the R1-1776 open-source model.

• Google CEO says that self-driving cars have … 78% fewer injury-causing crashes than human-driven cars.

• Southwest Airlines will cut 15% of its corporate workforce … it’s the company’s first-ever layoffs 

• Corporate delinquencies are at an 8-year high … It started with credit card delinquencies and auto loan defaults reaching +10yr. highs.  Now, US companies are missing loan payments at the highest rate in almost 8 years.

• Can Kim K. save Nike … with the Nike + Kim Kardashian partnership set to launch a new fitness brand = NikeSkims.  This is the first time that Nike has created a collab-brand with an external business.

• A 26-minute nap improves alertness and performance … is what NASA researchers found when compared to those who didn’t nap at all. 

• DOGE has reported achieving about $1B in savings/day … and a controversial plan has surfaced that takes 20% of the savings and distributes them to each of the 79m tax-paying U.S. households – about $5,000/household. 

• Walmart had its worst day in over a year … after issuing an under-whelming earnings outlook.  Adding to the indignity, Walmart has fallen behind e-commerce archrival Amazon.

• Cruise stocks were clobbered … after Commerce Secretary Howard Lutnick said the group would be facing higher taxes in the very near future.

• Hooters is exploring bankruptcy.

• OpenAI is rolling out Sora on Monday … It’s the AI system that can generate realistic-looking videos from text prompts.

• Paul Tudor Jones just loaded up on Bitcoin … and his firm quadrupled its stake in BlackRock’s IBIT ETF.  Now that’s conviction!

• There are 2-sides to every Fartcoin … Crypto investor sentiment hit one of its lowest all-time readings this week, even as the price of Bitcoin smashed record highs in December.  Investors are realizing that the meme-coin boom was little more than a “short-term casino.”

• Hayden Mark Davis (Kelsier) and Assoc. engaged in insider trading …  preloading wallets with tokens before each meme-coin launch.  The Melania Token was an orchestrated rug pull worth ~$250m – controlled entirely by Hayden.  This is one of the largest Solana-based insider scandals to date.

• Michael Saylor’s ‘Strategy’ is preparing to buy another $2B worth of bitcoin.

• “I just want in” …  The next billion crypto users won’t care about seed phrases they need to remember – they’ll just want passkeys, biometrics, or something recoverable.  Normal people hate the idea of forgetting/losing a random string of words that would cost them their entire fortune.

• Bybit was hacked to the tune of $1.4B … and authorities believe that a North Korean group is to blame for the largest single theft of all time.

• Coinbase announced that the SEC is dropping all charges … against the company for operating an unregistered securities exchange and failing to properly register its crypto staking program.  Essentially, crypto companies are being promised regulatory amnesty while Trump’s crypto task force figures out what’s next for the industry. 

• Use Platinum as your indicator:  With silver surging and gold going for it, platinum has been patient.  It’s been stuck in a range, coiling into a triangle formation (see above), and waiting for its turn to breakout.  This is where it gets interesting.  The odds of an inflation resurgence are steadily rising, and commodities are going to be a key beneficiary of that.  Therefore, from an asset allocation standpoint, commodities are as much a lever to boost returns as they are a hedge against the dark side of inflation resurgence.  Per Callum Thomas: a breakout to the upside of the triangle formation in Platinum (the chart above) will essentially confirm a reacceleration of growth + inflation resurgence, while a break-down will be waving the welcome flag for a recession.

• Thursday:  Gold is at another record high, trading above $2,954.  Silver is making an even bigger move, trading above $33.30.  Gold peaked at about $2K in 2020, and is now 50% higher – yet the gold miner ETF (GDX) is about 7% below its 2020 peak.  Watch the miners as they’ve gone nowhere for years, despite some of them having enormous in ground holdings and buckets of profitability / free cash-flow.

• Bullish on Commodities … due to our Monetary Policy.  With commodities being cheap and a decade of underinvestment in supply by commodity producers, I could not be more bullish on the outlook for commodity prices.  From a macro-economic position, rising commodity prices == upward pressure on inflation.  From an investing perspective, that means a major upside opportunity for commodities, with stocks and bonds stumbling under this scenario.  At the very least, commodities are an obvious hedge to the near-term inflation risk.  The problem with our monetary policy is that rate cuts ‘n easing monetary policy stimulate demand, and higher demand tightens capacity.  Both put upward pressure on prices, causing inflation to rise.  Keep an eye on inflation resurgence and remember: commodities are a hedge against this rising risk.

• We’re (once again) trapped inside this ‘Volatility Box’ … between 5900 and 6111 on the S&P futures (/ES).  Friday’s decline of +700 DOW points, demonstrated the some of the gamma risk associated with $2.7T of expiring on one day.  But all it really did, was put us back inside the ‘Volatility Box’.

• The Pros are playing Duck ‘n Cover with Bonds and Gold … as they rotate out of equities. 

  Tip #1: Use Platinum as your signal as to whether Gold and Inflation are moving higher (along with Platinum), or whether a Recession is on the horizon (if Platinum falls). 

• For now, the VIX is no longer an indicator you can trust …  because it’s seen this movie before.  Until the S&Ps break decisively out of the ‘Volatility Box’, the VIX will also remain range-bound.

• The Advance/Decline line is the only real ‘Capitulation’ signal.  You’ll know when markets are at the ‘Puking Point’ – when +95% of the stocks are declining.   

  Tip #2: If you’re a trader and the S&Ps break decisively below 5900, Sell ‘em ALL and jump into GOLD and/or BONDS.

• SPX Expected Move (EM):

  o Last Week’s EM == $72 (4-day EM) – We moved 104 points lower and outside the lower edge of the EM.  

  o Next Week’s EM == $114 (5-day EM).  The current level for the /ES = 6029.  If we move lower by the amount of the EM, we will be within $15 of $5,900 = staring down the market’s abyss. 

  Tip #3: Next week, do NOT worry about anything other than the Volatility that is right in front of you!

• It’s a forever case of mixed signals.  Bonds are telling us that inflation and interest rates will remain higher for longer.  I remain bullish on precious metals and commodities as a hedge due to their extremely cheap relative value, record low investor allocation, and continued set of buy signs.  Per Callum Thomas: Geopolitical chaos is causing investor sentiment, and markets to underperform around the weekend.  We’re Back in ‘da Box as upside pushes are being limited by sentiment shifts and a concentrated / overvalued market.  It will NOT get any easier from here.

• HODL’s: (Hold-On for Dear Life)

  - (+) ICSH == PUBLIC.com Bond Portfolio (6.9% yield)

  -  (+) IBIT – Blackrock’s Spot Bitcoin ETF ($54.7 / in at $24)

  - (+) Physical Commodities = Gold @ $2,949/oz. & Silver @ $32.8/oz.

  - Bitcoin (BTC = $96,600 / in at $4,310)

  - Ethereum (ETH = 2,730 / in at $310)

  - ETHA – Blackrock’s Spot Ethereum ETF ($19.8 / in at $20)

  - (+) GLD – Gold ETF ($270.7 / in at $212)

   

  Options for Income: **IBIT

  - BUY the IBIT ETF: Bi-Weekly

  - BUY PUTs: 1 Std. Dev. Lower, Expiring = 3-weeks away, OTM (out-of-the-money) for protection.

  - SELL Covered CALLs: 0.75 Std. Dev. Higher, Expiring = 2-weeks away, OTM for income and to finance the PUTs.

   

  Crypto Alts:

  - Aave (AAVE = $245 / in at $155)

  - ChainLink (LINK = $17.7 / in at $11.15)

  - Doge (DOGE = $0.24 / in at $0.22)

   

  ‘De-Gen’ Economy:

  - Apple (AAPL = $245 / in at $220)

  - Robinhood (HOOD = $51.6 / in at $42)

  - Singapore (SE = $127.6 / in at $107)

   

  Please be safe out there!

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