Stocks higher after Tuesday\u2019s blockbuster session that pretty much declared the Fed\u2019s rate-hike campaign over, sending bond prices soaring. Not everyone is at ease though, with both Citadel founder\u00a0Ken Griffin\u00a0and JPMorgan CEO Jamie Dimon cautioning that investors may be getting ahead of themselves. <\/p>\n
Indeed, they face a major blind spot, says the founder of hedge fund Praetorian Capital,\u00a0Harris \u201cKuppy\u201d Kupperman: \u201cThe [U.S.] government is about to go bankrupt. They should be looking at what happened in Zimbabwe and plan appropriately.\u201d<\/p>\n
Speaking to MarketWatch the Monday before CPI data, he said the clamor for bonds or Treasury bills right now makes no sense to him. \u201cI wouldn\u2019t lend these guys money for a beer overnight,\u201d he says.<\/p>\n
But then the mandate for his $260 million flagship Praetorian Capital Fund is to find investments \u201cundergoing some sort of dynamic change\u201d flying under the radar. Up 748% since its 2019 inception, the fund had triple digit returns in 2020 and 2021, and has gained 18% so far this year \u2014 but he says the last six quarters have been hard for many of his investment themes.<\/p>\n
\u201cThings are going much better than I had expected in the businesses themselves, unfortunately the share prices just haven\u2019t kept up with the\u2026fundamental realities of the business,\u201d Kupperman said. \u201cI think there\u2019s a catch-up phase that\u2019s overdue.\u201d<\/p>\n
The manager rightly called a tech selloff in 2022 \u2014 he isn\u2019t interested in the Magnificent Seven tech names as he says they\u2019re too expensive \u2014 but his prediction for oil prices to reach $200 this year has not panned out. <\/p>\n
Read:<\/strong> The Magnificent Seven add more than $200 billion to their market caps<\/p>\n Energy, though, is part of one theme he\u2019s not about to abandon. The hedge fund\u2019s two biggest positions are oil-field services companies Valaris Read: <\/strong>This hot sector is producing returns like Nvidia\u2019s \u2014 and it\u2019s got nothing to do with AI<\/p>\n He notes some \u201cspectacular\u201d earnings recently from Valaris, which the fund started buying in the low $20s \u2014 it currently trades at $70 per share.<\/p>\n Valaris is currently earning just over $200,000 a day on drilling charter rates \u2014 the daily cost to rent out their equipment \u2014 but rival Diamond Offshore \u201cGiven its order book, charter rates and how much cash flow it can produce, Valaris should be trading at $100 [per share].\u201d<\/p>\n He says the fundamentals are also there for prices of uranium \u2014 a theme he\u2019s well known for \u2014 to shoot higher. \u201cIt reminds me of back in 2003 when I played it and it went from $12 to $130,\u201d he says of the commodity currently.<\/p>\n Read:<\/strong> Why uranium prices have climbed to their highest in over a decade<\/p>\n Kupperman sees demand driven by many factors \u2014 Japan reactors getting turned back on, and more being built across China, India and Indonesia \u2014 and limited supply. \u201cAnd so the price of uranium this year has increased from roughly $50 to $75 \u2026 50%, which is good, but it\u2019s still below the cost needed to build a new mine.\u201d<\/p>\n \u201cAlmost every week, we learn about a new positive development in the nuclear sector,\u201d he said. \u201cI think the world\u2019s coming around to nuclear as the least bad energy option out there,\u201d said the manager.<\/p>\n But the price will probably have to go \u201cdramatically higher,\u201d to encourage more mine building, and sees 2025 as the peak year for uranium deficits. They see 2024 demand at 210 million pounds globally versus supply forecasts of 160 million pounds globally. <\/p>\n Kupperman invests in Sprott Physical Uranium Trust He\u2019s also sticking to a bet on St. Joe The 87-year old company\u2019s shares are up 34% so far this year. St. Joe is \u201cincreasing the value of the 170,000 acres of land it owns as more people move to Florida, and are also developing commercial real estate and \u201cdoing surprisingly well.\u201d<\/p>\n \u201cI think this stock trades at about 20% of replacement cost and we\u2019re value investors and we buy things very cheaply and it has massive tailwinds,\u201d said Kupperman. <\/p>\n His fund targets up to 12 themes, but has about five themes at any given time that take up 50% to 75% of the portfolio. Right now he\u2019s buying shares of a new company that\u2019s still under wraps. <\/p>\n In his October letter to investors, he described it as a company that has \u201chistorically produced elevated returns on capital\u201d though has seen share prices fall due to a likely weak third quarter. <\/p>\n <\/p>\n Post data and after Tuesday\u2019s 1.9% surge for the S&P 500 BX:TMUBMUSD02Y October retail sales fell 0.1%, the first drop in seven months, but also less of a decline than was expected, while producer prices fell 0.5%, against forecasts for a 0.1% rise. The New York Fed\u2019s Empire State manufacturing gauge jumped 13.7 points in November to 9.1, the highest level since April \u2014 it was expected to fall.<\/p>\n Business inventories are coming at 10 a.m., and at the same time, the Fed Vice Chair for Supervision Michael Barr will testify to a House panel. Richmond Fed President Tom Barkin will speak at 3:30 p.m. <\/p>\n Target Tech names Palo Alto Networks The Republican-run House of Representatives passed a temporary spending bill to avert a partial government shutdown ahead of Friday\u2019s deadline. The bill now heads to the Democratic-controlled Senate.<\/p>\n Quarterly filings by big investors could put some stocks in focus. Warren Buffett\u2019s Berkshire Hathaway BRK.B, Soros Fund Management sold off Nvidia Israeli troops in search of Hamas militants have raided Gaza\u2019s largest hospital where hundreds of patients, including newborns, are stranded.<\/p>\n Mutant Ape Planet NFT creator pleads guilty to stealing $2.9 million in \u2018rug-pull\u2019 fraud<\/p>\n A cautionary tale for those looking to retire abroad<\/p>\n A global hunt for water profit risks draining cities dry.<\/p>\n How Cyprus rose to become the beating heart of the Putin regime\u2019s shadow financial system.<\/p>\n Companies that have mentioned El Ni\u00f1o or other weather disruptions have underperformed the S&P 500 by up to 28 percentage points year to date, a team of Morgan Stanley analysts led by Edward Stanley has found, as they offer up the following chart:<\/p>\n <\/p>\n \u201cThe [World Meteorological Organization] reports that El Ni\u00f1o has a 90% likelihood of continuing through the Northern Hemisphere winter, pushing global average temperatures higher. As these weather events become stronger, we think this theme will continue to drive diverging equity performance in the coming 3-6 months,\u201d said Stanley and his colleagues.<\/p>\n These were the top-searched tickers on MarketWatch as of 6 a.m.:<\/p>\n $2,500 for homeowners willing to host 100 cockroaches.<\/p>\n Authorities are trying to get Pablo Escobar\u2019s hippo empire under control.<\/p>\n
\n VAL,
\n
\n and Tidewater
\n TDW,
\n
\n up around 4% and 64%, respectively. <\/p>\n
\n DO,
\n
\n just signed a charter contract worth over $500,000 a day, he notes. Valaris has also been signing new contracts in the $400,000s for several months, which means substantial cash flow going forward, he said.<\/p>\n
\n SRUUF
\n and U.K.-based uranium investment group Yellow Cake
\n YCA,
\n
\n but avoids junior miners that he thinks are \u201cspeculative and risky.<\/p>\n
\n JOE,
\n
\n one of Florida\u2019s biggest landowners with some of the state\u2019s best land. \u201cFlorida has the most net migration of a state right now, people are really desperately leaving all the terrible places in the northeast that are crime ridden, [with] bad weather and high taxes and they want to go somewhere nice,\u201d he says. <\/p>\nThe markets<\/h2>\n
\n SPX,<\/span>
\n stocks are moving higher, led by tech
\n COMP,<\/span>
\n with 10 and 2-year Treasury yields
\n BX:TMUBMUSD10Y<\/p>\n
\n also climbing. <\/p>\nThe buzz<\/h2>\n
\n TGT,
\n
\n crushed earnings estimates, and the stock is up 14%. TJX
\n TJX,
\n
\n is not faring as well, with shares slipping after the cut-price retailer guides for weaker fourth-quarter earnings. China e-commerce giant JD.com
\n JD,
\n
\n reported upbeat results and shares are climbing.<\/p>\n
\n PANW,
\n
\n and Cisco
\n CSCO,
\n
\n report after the close.<\/p>\n
\n BRK.A,
\n
\n
\n exited General Motors
\n GM,
\n
\n and picked up shares in Sirius XM
\n LSXMK,
\n
\n and Atlanta Braves
\n BATRK,
\n
\n NVDA,
\n
\n Microsoft
\n MSFT,
\n
\n and Rivian
\n RIVN,
\n
\n and bought Arm
\n ARM,
\n
\n Maplebear
\n CART,
\n
\n and Apple
\n AAPL,
\n
\n David Tepper\u2019s Appaloosa Management hedge fund boosted its Amazon
\n AMZN,
\n
\n stake and dumped Apple, while Michael Burry of \u2018Big Short\u2019 fame made bearish bets against the iShares Semiconductor ETF
\n XSD
\n and Booking Holdings
\n BKNG,
\n Best of the web<\/h2>\n
The chart<\/h2>\n
The tickers<\/h2>\n
\n
\n \n Ticker<\/p>\n<\/td>\n \n Security name<\/p>\n<\/td>\n<\/tr>\n \n \n TSLA,
\n \n Tesla<\/p>\n<\/td>\n<\/tr>\n \n \n NVDA,
\n \n Nvidia<\/p>\n<\/td>\n<\/tr>\n \n \n AMC,
\n \n AMC Entertainment<\/p>\n<\/td>\n<\/tr>\n \n \n GME,
\n \n GameStop<\/p>\n<\/td>\n<\/tr>\n \n \n NIO,
\n \n Nio<\/p>\n<\/td>\n<\/tr>\n \n \n AMZN,
\n \n Amazon.com<\/p>\n<\/td>\n<\/tr>\n \n \n PLTR,
\n \n Palantir Technologies<\/p>\n<\/td>\n<\/tr>\n \n \n AAPL,
\n \n Apple<\/p>\n<\/td>\n<\/tr>\n \n \n PLUG,
\n \n Plug Power<\/p>\n<\/td>\n<\/tr>\n \n \n MSFT,
\n \n Microsoft<\/p>\n<\/td>\n<\/tr>\n<\/table>\n Random reads<\/h2>\n