Category: INO.com Contributors

Navigating The Microchip Arena

Posted on by Peter Tsimicalis

It's important to remember that the perfect time to buy is when there's blood in the water, never has the case been more true than within the microchip industry at its current junction. With only three main players in the manufacturing and design space, a would-be investor needs to ensure that a chipmaker is managing its supply chain tactically, is in a solid geopolitically spot, and is staying ahead of the curve as it relates to both their broad strategy and most importantly, technological advancement.

A Majority Hinges On Who Has The Technological Lead

While the past has taught us that American ingenuity at its finest can still be beaten, as shown by Samsung & TSMC's past leadership in the chip race, Intel Corporation (INTC) is the chipmaker to bet on as we enter the mid-2020s and is a stock that you can likely accumulate for a decade at least if this arena continues to play out as it has. Panning back to their current inferiority in the chip race, Intel's turnover and lack of government support were mainly the contributing factors in granting Samsung and TSMC's lead, allowing them to develop 5nm chips while Intel was still producing 7nm chips (quick FYI, chip advancement is measured by the density of transistors - nm stands for nanometer, this chart below is a fantastic example of microchip generations).

microchip

While this would currently place them 5 years behind the competition, Intel's new CEO, Patrick Gelsinger has a radical new plan to launch ahead of the competition; Gelsinger is positioning Intel to completely skip the next generation of chip hardware in hopes of bringing the Angstrom chip to market. It's called this because the chip has 20 'Angstrom' transistor density compared to the in-development 3 and 4nm or (30 & 40a) transistor density chips of Samsung and TSMC. Getting this to market by early 2025 as planned would boost them ahead of others within this arena by 5 years. Continue reading "Navigating The Microchip Arena" →

The Fed Giveth, The Fed Taketh Away

Posted on by George Yacik

With the stock market tanking and the Federal Reserve finally starting to raise interest rates and reduce its $9 trillion balance sheet, it's probably a good time to look back and determine how much of the stock market's gains in the past 12 years or so have been built on extremely accommodative Fed monetary policy. That could provide some idea of how much we can expect the market to drop once the Fed has finally stopped the tightening process, and when stocks might start rising again.

Since reaching its all-time high of 16,057 back on November 15, the NASDAQ had dropped nearly 29% as of May 18, when it closed at 11,418. Likewise, the S&P 500 is down nearly 18% since it hit its all-time high on December 27, while the Dow is off more than 13% after reaching its peak on that same day.

Those declines followed several indications from Fed Chair Jerome Powell and other Fed officials that the central bank had finally conceded that inflation wasn't "transitory" after all and that it had to act aggressively before inflation got totally out of control.

The Fed raised its benchmark interest rate by 25 basis points on March 16, its first rate increase since December 2018, and another 50 bps on May 4, its largest increase since May 2000. The Fed's next meeting is scheduled for the middle of next month, at which it is expected to vote for another 50-bp hike, followed by several more by the end of the year. If the Fed raises rates by 50 bps at each of its next five meetings, including the one right before Election Day, that will push its benchmark rate to Continue reading "The Fed Giveth, The Fed Taketh Away" →

3 Gold Miners To Inflation-Proof Your Portfolio

Posted on by Taylor Dart

It was another turbulent week for the major averages, with the S&P 500 (SPY) finding itself down 3%, extending its decline to the 20% mark. However, one sanctuary from the turbulence was the Gold Miners Index (GDX). Not only did the index not lose ground last week, but it gained 3%, and it is one of the few ETFs sporting a year-to-date gain. This continued relative strength combined with an undervalued industry group relative to historical levels suggests that this is a group worth keeping a close eye on for investors looking to inflation-proof their portfolios.

Gold Miners Index (GDX)

Source: TC2000.com

With inflation readings continuing to sit at multi-decade highs and the Federal Reserve maintaining its hawkish pivot, there are few places to hide in today's market. However, one asset that has historically done well in periods of negative real rates is gold (GLD), and one way to collect income with exposure to the gold price is through gold miners. The caveat, however, is that they must be trading at a deep discount to net asset value [NAV] and ideally out of favor. With more than 80% of miners trading at discounts to NAV and the industry group down nearly 40% from its Q3 2020 highs, it currently meets both requirements. Let's look at three names that make for solid buy-the-dip candidates: Continue reading "3 Gold Miners To Inflation-Proof Your Portfolio" →

Gold Update: Window Of Opportunity Still Open

Posted on by Aibek Burabayev

Last month I spotted a “Repeated Bullish pattern” of another Cup & Handle model.

The majority of readers confirmed that they see it either. Most of you supported my outlook of an extended Handle with another zigzag to the downside. This was the right guess. Let me show it to you in an updated chart below.

Weekly Gold Chart

Indeed, the gold futures price followed the black zigzag on the chart to the downside. Hence, the outlook played out as planned. However, the depth of the drop was excessive as it hit below the expected valley of 50% Fibonacci retracement level and even 61.8%. The collapse stopped only close to four-fifths of the Cup. The classic approach would invalidate the pattern in this case. Continue reading "Gold Update: Window Of Opportunity Still Open" →

What All The Recession Talk Really Means

Posted on by Wayne Burritt

If you’ve been following along here over the past year, I won’t have to remind you that I have no problem telling it just like it is. And that includes the good news, and the bad news, about Bitcoin (BTC), cryptocurrencies in general, stocks, and the economy. You name it, and I try to be upfront and transparent.

In fact, in last week’s post, I gave you the grisly details behind the sell-off in just about every asset class. I showed you how much every major stock index was down for the year in gory detail. I then showed you how Bitcoin was a member of that dubious club.

I also got under the hood of what I consider to be the biggest factor right now, which is hammering stocks and Bitcoin: Inflation.

The fact is inflation is at nosebleed levels, and it’s got just about everyone in a tizzy. And with good reason: Inflation eats away at incomes and makes products and services super-expensive. And since inflation now stands at multiple decade highs, you ignore it only at your own peril.

But as bad as inflation is, I have to remind you that down deep, what really makes investors nervous is not inflation itself but the tool of choice that gets used to fight it: Higher interest rates. Continue reading "What All The Recession Talk Really Means" →