They tell me this market won’t go down which is how we all know it will. This time isn’t different even though they want you to think so.
We are entering the full frenzy phase after fifteen years of bullishness. Retail investors who haven’t been here before think that they should have bought more, or leveraged up. Us “grey beards” know that pigs get slaughtered.
Check out this chart which shows the money being dumped into Leveraged ETFs:
As I wrote last week, the downside of getting into 2x of 5x ETFs is that when the market turns, they go down by more than they are leveraged. This is the definition of fast money and at some point, they will be fleeing for the exits at the same time.
That said, it’s not here yet and the last year of a bull market can equal 25% of its gains.
For example, all of my speculative stocks are flying. Spectral AI, inc. (MDAI) which is in my personal portfolio is up 34% today alone.
The company uses AI to see if burns, wounds, or limb damage to limbs from diabetes will heal, or need to be amputated. It’s impressive stuff and the speculative movement of the stock price is incredible.
The news driving the gain today is that the company has moved on from burn centers in the U.S. to emergency rooms.
Here is the important part from the PR:
“…today announced the successful completion of truthing for all images gathered from burn centers across the United States. This milestone represents a pivotal step in training the Company’s proprietary DeepView® System to predict wound healing outcomes accurately.
Spectral AI is now initiating truthing for images collected from emergency departments and emergency rooms nationwide.
Truthing is the rigorous process of gathering ‘ground truth’ data that verifies whether portions of a wound did or did not heal and then using this data for training of its AI-powered algorithm. For each patient, images are collected during the early stages of treatment and correlated with biopsies, 21-day wound assessments, and expert evaluations. This combination of data creates a “ground truth” dataset, enabling the DeepView® System to distinguish between wounds likely to heal and those requiring intervention.”
It’s all Data
In the past, the doctor would look at your wound and based on his experience determine how it should be treated. This new DeepView system uses AI coupled with real-life images and data to determine the best method of treatment.
I bought the stock because it was one of the only uses of AI that had real-world implications and the possibility of turning a profit.
The stock currently trades at $2.50 and has a market cap of $37 million. It is a typical small-cap biotech start-up. They burned $11 million in cash last year and have $3.7 million left so they will likely have to raise money somehow. They recently repriced 8 million warrants from $11.50 to $2.75 a share which drove the stock down 50% to one dollar.
On the plus side, they had $27 million in revenue, up 127% over the prior year.
Other small caps of note include Plug Power (PLUG) the hydrogen-based forklift manufacturer had been monkey-hammered from $75 to $1.88 before bouncing back this week to $2.45.
Fastly, (FSLY) the cloud company that was a market darling during COVID before topping out at $135 a share before being gashed down below $5 is up 13% today and breaking out. Lion Electric – an EV maker is up 71% today off the bottom. The list goes on…
Fluffy Market
The point I’m making is there is a lot of fluff in the market. But that’s not necessarily a bad thing. People like Warren Buffet have hundreds of billions of dollars invested. He has to sell early in a steady manner so he doesn’t spook the market. This is how he gets his money out while the market is still going up. He will be in cash for up to three years before the big correction shows up.
You, on the other hand, can sell all of your positions in five minutes without moving the market at all. You are nimble and fast. That is why my philosophy it to put 90% of your money in long-term investments.
Then use the other 10% of your portfolio for short and medium-term trades. I’m talking three weeks to three months. Some years that 10% will return as much as the safe money.
It is with the 10% that you buy small caps, bitcoin and the more volatile commodity trades. Use charts to provide the buy points and a clear catalyst to provide the exit.
All the best,
Christian DeHaemer
Outsider Club
P.S. I will be launching my own trading service to get you in on these trades first. Keep an eye out, profits will be made.
P.P.S. Full disclosure, I like to put my money where my mouth is. I own both Plug Power and Spectral AI.
Buy on credit:
https://www.outsiderclub.com/leveraged-etfs-are-all-the-rage/
Sold at the top:
https://www.outsiderclub.com/nailed-it/
Prediction profits:
https://www.outsiderclub.com/my-bitcoin-price-prediction/
