October 1 Biweekly Strategy Webinar Q&A

Below, please find subscribers’ Q&A for the October 1 Mad Hedge Fund Trader Global Strategy Webinar, broadcast from Incline Village, NV.

Q: What effect will the government shutdown have on the stock market?

A: The answer so far is nothing—absolutely nothing. It appears the President’s strategy is to cut spending only in Democratic states. New York City lost $18 billion in infrastructure spending today. So, that seems to be the strategy for now.

Q: What are your thoughts on Cameco Corp (CCJ)?

A: We recommended them a year ago. Since then, it’s practically doubled, and in recent months, it’s been moving sideways. So, if we don’t get any dip, what you do is you start scaling in on a daily basis. You literally buy one share a day, every day, and that way you’re going to average in over a period of time and catch any kind of dip if that does show up. This is called dollar-cost averaging. It’s what a lot of brokers do, and it’s also what you do in stocks that don’t pull back. They just keep going straight up. The nuclear play is just getting started. I think it has a decade to go. There are an increasing number of plays in the area, like Nuscale Power (SMR), like Vistra Energy (VST). I would be buying them…and copper (FCX).

Q: Casual restaurants are falling apart. Is it time to buy, with interest rates dropping?

A: No. Even on a good day, these are all low-margin businesses. Where I live, many restaurants are closing because they’re losing all of their immigrant workers and having to replace them with high-cost Americans, so that’s a double in the wage cost right there. Inflation is driving food prices up through the roof. Beef prices are almost at record highs now, with steaks at some places costing $100. So again, ingredients up, labor costs up — not a business I want to be in, especially when there are many other businesses so much more attractive, like housing, interest-sensitive, precious metals, and financials.

Q: What is the effect of the EV tax credit expiring on EV stocks?

A: Well, in the case of Tesla (TSLA), it means they make less money. In the case of General Motors (GM) and Ford (F), it means they lose more money, since they never made money on the EV business because they got in 15 years too late. And in the case of Tesla, it also means they lose the sale of their green credits. Tesla made $1 billion, or about a quarter to a third of its profits, selling green credits to other companies, and counting it as income. So it was all federal subsidy money that they were taking in. That is really going to hit Tesla’s earnings hard, but we won’t see that until they report the fourth quarter earnings, which will be sometime om January 29. That’s why I’m playing Tesla from the short side, both personally and with my model trading program.

Q: Do you think stocks, real estate, and commodities will crash after the peak?

A: I do. We are all trading against a known peak now with a deliberate flooding of the money supply in 2026. So, either extreme prices cause the market to crash or extreme inflation does; and we’re on track to reach both sometime in the next year or two, so that’s why I keep telling people: don’t forget to sit down when the music stops playing. Make hay while the sun shines, and then go into T-bills or cash after that.

Q: ​​Is oil (USO) cheap, and what companies should I buy?

A: Oil is cheap, but it may be about to get cheaper as the OPEC price war or market share war continues and the U.S. economy slows. Government shutdown is definitely not good for the price of oil, as the US GDP will shrink. Guess who the largest consumer of oil and gasoline is in the United States? It’s the U.S. government and the U.S. military, which is bad for that market. We’ll stay away, but if you want to go for quality at a discount, that would be Exxon (XOM) and Occidental Petroleum (OXY). Buffett (BRK/B) just bought (OXY)’s petroleum business for $10 billion, allowing them to pay down debt, which is a positive.

Q: How long do you think the government shutdown will last?

A: Well, the last Trump shutdown was 35 days, and Trump always likes to beat his old targets, so I’d say longer than 35 days. It could even go to the end of the year. There really is no incentive for Trump to reopen the government now, because he’s basically trying to shut the whole thing down with mass firings anyway. So, this could go on for quite a while, and of course, the longer it goes on, the more it hurts your retirement portfolio. But use that dip to buy, as I said earlier.

Q: What do you think of the federal government taking stakes in commodity companies?

A: Well, that’s fine, as long as they remember to sell out at the top, which is what they did last time during the 2008 financial crisis; the government forcibly took 5% shares in the top 20 banks, as well as the big insurance company AIG and General Motors (GM). They made about $80 billion on all of these because once the market started to rally and all the stocks went up. The government sold all of them for a big profit. Will they be as clever this time around? I doubt it, which raises the question: who’s going to take responsibility for the big losses that are likely to come from all of these speculative, high-risk investments in money-losing companies? Remember, it’s your money they are spending. That is what’s happening.

Q: What’s your upside target for gold and silver?

A: $5,000 an ounce for gold and $50 an ounce for silver. Instead of those being my 2028 targets, they’re now my 2026 targets. We’re only about 25% away from the upside target for gold, and we’re even closer for silver, which is moving twice as fast.

Q: Do you really believe that AI is taking over the world?

A: No, I don’t. I think AI is just another new tool, which companies are rapidly learning how to use, just like the steam engine was in 1820, electricity in 1900, computers in the 1950s, personal computers after 1990, and the Internet in 1995. Now we have AI, which has been around for about 12 years, but only a tiny group of computer programmers and data scientists knew what it was. Yes, it’s just another tool, which eventually will increase our standard of living and lower our costs, just like every other new technology has.

To watch a replay of this webinar with all the charts, bells, whistles, and classic rock music, just log in to www.madhedgefundtrader.com, go to MY ACCOUNT, click on GLOBAL TRADING DISPATCH, TECHNOLOGY LETTER, JACQUIE’S POST, then WEBINARS, and all the webinars from the last 12 years are there in all their glory.

Good Luck and Good Trading,

John Thomas
CEO & Publisher
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