How To Profit Now That Gold Is Back

Posted on by The INO.com Team

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? Continue reading "How To Profit Now That Gold Is Back" →

US Treasury Touches "Crypto-waters"

Posted on by Aibek Burabayev

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.

What do you think is the real target of the Treasury?

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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. Continue reading "US Treasury Touches "Crypto-waters"" →

AI Technology Taking Heat

Posted on by Matt Thalman

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. Continue reading "AI Technology Taking Heat" →

Buy Zones For These Two Small-Caps

Posted on by Taylor Dart

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. Continue reading "Buy Zones For These Two Small-Caps" →

Weighing Two Drug Titans Against Each Other

Posted on by The INO.com Team

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. Continue reading "Weighing Two Drug Titans Against Each Other" →