Alpha Trader

This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking current market events and the outlook going forward with Jeff Kilburg, founder and CEO of KKM Financial.
Topping the news during recording was the blowup in Archegos Capital Management, and the losses possibly to be inflicted upon several of the banks that dealt with that family office. Most notable, says Kilburg, is the broader market’s ability to shrug off these hiccups and continue to move forward. If you’re bullish on banks - and Kilburg is thanks to the steepening in the yield curve - you may be getting an opportunity to buy into some weakness.
Though generally bullish on the economy and stocks, Kilburg believes long-term interest rates (the 10-year Treasury yield was at 1.68% at the time of recording) have gotten ahead of themselves. He reminds of the near-$18T of money still invested globally at negative yields, $5T in money market funds earnings essentially nothing, and a Fed seemingly determined not to let long rates rise too much - it might add up to a sub-1.50% 10-year yield before long.
Turning to Bitcoin (BTC-USD), which can no longer be ignored as an important investment class, Kilburg is a bull, noting growing adoption - whether from institutional investors, listed companies putting it on their balance sheets, merchants accepting it for payments, or workers getting paid in the crypto instead of fiat money.
Of the dollar (USDOLLAR), Kilburg says significant further strength might have him reconsidering his bullish view on stocks. For now, the greenback's relatively modest rise from the 90 level earlier this year doesn't have him too concerned.
There's plenty more, including Kilburg's views on volatility, oil, and gold.
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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking with Sam Stovall and Todd Rosenbluth. Sam is chief investment strategist at CFRA, and Todd is CFRA’s head of ETF and mutual fund research.
On the one-year anniversary of the bottom of the market crash, Stovall and Rosenbluth detail the numbers behind how we got to today’s near-euphoric market conditions and where we might go from here.
If you don’t have a perfect market timing tool, you are better buying than you are bailing, says Stovall, summing up the key lesson from the last year.
As for where we might be going, Stovall sees the S&P 500 (SP500) closing 2021 about 9% higher than the current level. As for what might trip that up … On the economic upside front, hotter-than-hoped inflation might force the Fed to tighten sooner than expected. On the economic downside front, keep an eye on the what might be a resurgence of Covid-19. Paris is back in lockdown (though not as severe as the previous ones), and cases are surging in a number of places across Europe.
For those who are worried about the economic downside and that yields indeed might be peaking here, Rosenbluth suggests going back to what worked when yields were falling last year - tech (XLK) and consumer staples (XLP). Stovall seconds this idea, noting the combination of tech and staples is about as close to a free lunch as the financial markets can offer. Going back many years, owning these two sectors has given an investor all of tech’s upside, but with two-thirds of the volatility.
There's plenty more from these two savvy market veterans. Listen to or subscribe to Alpha Trader on these podcast platforms:

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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking about the Fed, interest rates, inflation, Bitcoin, and more with David Kelly, chief global strategist at JPMorgan Asset Management.
The FOMC meets this week, and while Kelly agrees with the consensus that there won’t be any policy moves, he believes the central bank - sooner, rather than later - is going to have to acknowledge that the economy has performed stronger than expected. Look for a few more “dots” to indicate that rate hikes are in play for 2023.
The resultant bond market tantrum might lead to some blow-ups, but Kelly isn’t too concerned, noting similar episodes in 2013 and 1994 didn’t deter (and in fact may have helped lengthen) long-term bull markets for stocks. Bottom line: The vaccine and reopening economy mean strong economic growth, the stimulus bill will provide a further boost, and the unemployment rate could see a 3%-handle before too long. That’s not the sort of environment where the real yield on the 10-year Treasury (TLT) should be negative.
“Cryptocurrencies are nonsense,” says Kelly, not buying the notion that just because there’s a finite amount of bitcoin (BTC-USD) means such a great value should be attributed to it. The real question, says Kelly, is whether there’s a use for it, and whether some aspiring entrepreneur could one day establish a legitimate competitor.
That said, Kelly does have serious issue with the “loss of discipline” among global central bankers, and worries it might end up leading to a great inflation. To hedge, he’d be a buyer of real estate and equities (value names, rather than growth), but not bitcoin.
There’s plenty more, including why the Fed has over-estimated the power of low interest rates, and how intellectual stasis in European central banking has left the Continent in far worse economic shape than the U.S.

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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking cannabis investing with Todd Harrison, founding partner and CIO of CB1 Capital.
“2021 will be remembered as the year [cannabis] emerged as a legitimate and powerful asset class,” wrote Harrison recently. The bull case for U.S. cannabis, he says, rests with the legalization wave - not just in the states, but at the federal level where the Blue Wave means a far more favorable regulatory environment. 
If Cannabis 1.0 was the Canadian cultivation boom (think [[APHA]], [[CGC]], [[TLRY]]), and Cannabis 2.0 is the jump in U.S. retail operations thanks to state-by-state legalization (think of the multi-state operators), then Cannabis 3.0 - cannabis as medicine - will come thanks to the Blue Wave that just hit D.C.
That friendlier national regulatory environment also likely means U.S. operators as able to list their stocks on the major exchanges, thus opening them up to institutional investment.
Late last summer, Harrison wrote about the FANGificiation of U.S. cannabis - a group of Cannabis 2.0 stocks similar to the four horsemen of the late 90s (Intel, Dell, Microsoft, Cisco) and then the more recent Facebook, Amazon, Netflix, Google. In no particular order: Curaleaf (CURLF), Green Thumb Industries (GTBIF), Trulieve (TCNNF), and Cresco (CRLBF). A big rally since means these are no longer growth names at value multiples, but Harrison remains a fan.
That doesn’t mean there aren’t other quality U.S. operators, and Harrison notes ones like Terrascend (TRSSF), Columbia Care (CCHWF), and 4Front Ventures (FFNTF). An estimated total addressable market of $85B by 2030 means there’s plenty of room for all to succeed. As for the Cannabis 1.0 names, Harrison will trade them, but he prefers to own the 2.0 players.
There’s plenty more, including why Cannabis 3.0 could mean treatment for a wide range or serious diseases and thus a market opportunity far in excess of Cannabis 2.0.
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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Steve Sosnick, chief strategist at Interactive Brokers.
The biggest issue on many market-watchers’ attention right now is the rise in long-term interest rates, which last week sped up to a gallop. Keeping it simple, Sosnick says to pay attention to the Fed, which has tied its extraordinary accommodation to the return of a combination of full employment and inflation.
In normal times, the move higher in the 10-year yield - only a large handful of basis points at the moment - might not merit a mention, but the problem now, says Sosnick, is the stretched valuations on everything from stocks to commodities to bitcoin.
As with his previous appearance on Alpha Trader, Sosnick is keeping a close eye on volatility. Headed into last week, he noticed the VIX futures curve as quite steep, wondered what traders were so nervous about, and suggested a sell signal was at hand. While the curve has flattened a bit, it's not to the point where Sosnick believes markets are out of the woods.
One risk not many are focused on: April 15. Sosnick notes there are a lot of new entrants into markets, many of whom made big gains last year, and might find themselves with an unexpectedly large tax bill.
There’s plenty more, including why elevated volatility (and hence higher options prices) isn’t going away, and Sosnick’s view on Bitcoin.
Listen to or subscribe to Alpha Trader on these podcast platforms:
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Google Play
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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Jon Markman, president and founder of Markman Capital, and Greg King, CEO and founder of Osprey Funds.
Markman (who previously appeared on Alpha Trader in October) continues to believe the Fed ignited what’s going to be a decade-long bull run in stocks with their actions in response to the Covid crisis last year. With the Fed continuing to provide plenty of liquidity to the system, he’s targeting 92K for the Dow (DJI) in the next decade, and 34K on the Nasdaq (COMP).
Turning to individual names/sectors, Markman is still spying the opportunity in digital transformation, but this time with a twist - it’s old-school energy and auto companies whose business models are changing from nuts and bolts to 0s and 1s. Shareholders of names like Schlumberger (SLB), Baker Hughes (BKR), General Motors (GM), Ford (F), and Volkswagen ([[VLKAF]], [[VWAGY]]) are set to benefit in a big way. And the massive investment the auto players are making into EVs means a re-rating not just for them, but suppliers like Magna International (MGA), NXP Semiconductor (NXPI), and Analog Devices (ADI).
Markman’s got plenty more digital transformation ideas, including a speculative play on cryptocurrencies, and that’s VPC Impact Acquisition (VIH), a SPAC that earlier this year inked a deal to take digital asset marketplace Bakkt Holdings public.
Next up is Greg King, whose Osprey Bitcoin Trust (OBTC) recently launched as a lower-cost competitor to the Grayscale Bitcoin Trust (GBTC). A longtime investor in bitcoin (BTC-USD), King isn’t put off by the wild volatility (including a plunge from $53K to $49K right about the time we were speaking). He notes that whenever bitcoin pierces a previous all-time high (as it did late last year by finally climbing past $20K), the average subsequent return is 900% - this bull move has plenty more to run.
“Not your key, not your coins,” is something the hodlers like to say, but King says we all have limitations - not everyone is in a position to start up an account with an online exchange and possibly even custody their own bitcoin. A trust such as Osprey offers a fee of just 0.49%, is something that can be purchased inside an existing brokerage or retirement account, and safety isn’t an issue as all the Trust’s coins are held in custody by Fidelity.

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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Jack Bouroudjian, chief economist and co-founder at UCX, and chairman of the Global Smart Commodity Group.
The Fed is attempting to force-feed at least a modest level of inflation into the economy, says Bouroudjian, and so far it’s clearly been beneficial for stocks, commodities, and other assets like housing prices and cryptocurrencies. Worrying though is what if the Fed;s project doesn’t work as planned - either the next great inflation will be upon us, or we’ll become like Japan, where deflationary conditions have persisted for decades (the Nikkei only on Monday reclaimed 30K for the first time since 1990).
One gets the sense that Bouroudjian is leaning towards the Japan scenario. Be wary he says: The idea that monetary and fiscal stimulus combined with widespread vaccinations will lead to big economic growth and sooner-than-forecast Fed tightening has become a crowded trade. For now, he’s keeping his eye on the dollar (USDOLLAR) - should the greenback’s decline accelerate, it would mean the inflation scenario has taken hold, but dollar strength (and it has risen modestly so far in 2021) might mean the Fed will find itself in a deflationary pickle.
Of the current stock market action, Bouroudjian is getting a vibe similar to the late-1990s, when what started as a wholesome bull market moved into bubble territory. That doesn’t mean he’s short stocks, but he is hedging his longs via the use of inverse ETFs.
There’s plenty more including Brououdjian’s take on the Reddit craze (Preview: “Not everyone can be a zillionaire”), and why’s he long hemp for industrial uses and the cannabis names for medicinal uses.
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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking markets in general with Randy Frederick, VP of trading and derivatives at Schwab, and SPACs with Chris DeMuth, founder of Rangeley Capital, and editor of Seeking Alpha Marketplace service, Sifting the World.
While Frederick believes things are looking frothy right now, he reminds that frothiness doesn’t necessarily mean a market downturn is in store, but instead that markets are vulnerable to a sizable dip. His advice for these times - scale into positions, and don’t be too quick to try and buy bottoms.
Frederick made a prescient bullish call on the financial stocks (XLF) when he last appeared on Alpha Trader in October, and he and team continue to have an outperform rating on the sector today. Alpher takes note of the vaccine, another fiscal stimulus bill and super-easy monetary policy as behind what might be a big move higher in economic growth, the yield curve, and the financial names.
DeMuth isn’t ready to call the SPAC boom any sort of bubble, instead noting that SPACs are disrupting what’s been a broken IPO process. The large numbers of companies going public (via SPAC), he says, are simply “clawing back” what’s been decades of more and more companies remaining private and not becoming publicly traded. More of the venture capital world is moving into the more transparent and more accessible world of public companies.
When DeMuth last appeared on Alpha Trader in July, he was bullish on recently gone-public Pershing Square Tontine Holdings (PSTH), and he remains so today, even after more than a 50% rise in shares despite no deal being announced. DeMuth fully expects Bill Ackman and team to announce a merger target before the end of Q1.
As for the criteria DeMuth looks for in a SPAC, they remain the same: Among them, an experienced team (SPACs that have Roman Numerals after their name are always worth a look), and large enough size to purchase well-known brands.
There’s plenty more, including the one other sector Frederick has an outperform rating on, and a few of DeMuth’s other SPAC picks.
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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking first with Mike Novogratz, founder and CEO of Galaxy Digital Holdings (BRPHF), and then with Howard Lindzon, co-founder of StockTwits and general partner at Social Leverage.
“This GameStop (GME) squeeze is deeper than a squeeze,” tweeted Novogratz last week. “It is a revolution that started with people not trusting central authority; it is a call for transparency and fairness. It makes my more bullish crypto but more importantly more focused and committed to systems change.”
De-centralization, represented mostly by Bitcoin (BTC-USD), but also by Ethereum (ETH-USD), and other blockchains may help hold the answer to some of these issues, says Novogratz, as crypto goes right after the “rent-takers.” Bitcoin, he says, is this generation’s “digital gold,” i.e. it’s going to be too clunky to be another currency, but will work perfectly as a store of value. Ethereum, he says, is the “fabric” upon which we can rebuild institutions.
He’s bullish on the prices of both since both networks will continue to gain users, and more users means more value. This doesn’t mean there won’t ever be big moves to the downside - rest assured, there will be - but over time the chart direction will be upward and to the right.
Next up is Howard Lindzon, an investor in Robinhood (RBNHD), who freely admits the company likely made some PR mistakes last week, but also had no choice - given the capital needs of any broker/dealer - to halt trading in a number of names.
As to whether this is an existential blow to the Robinhood franchise, Lindzon notes the staggering number of Robinhood app downloads in the past few days suggests otherwise. He also reminds of major stumbles by a wide range of large-cap stalwarts over the years - they ended up being just that … stumbles.
There’s plenty more, including the guests’ takes on whether the silver (XAGUSD:CUR) squeeze can work, why former global macro portfolio manager Novogratz is betting on an upside surprise in interest rates, and Lindzon’s reminder that open price discovery cures many ills.

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This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher speaking with Bob Iaccino, chief strategist at Path Trading Partners, and co-portfolio manager at Stock Think Tank.
“Be ready for an ugly January,” goes the title of Iaccino’s latest monthly newsletter. By that he means not necessarily a down move in markets, but instead plenty of volatility. While there’s been some volatility, it’s mostly been to the upside this month, with the S&P 500 up about 4%.
Over the past few weeks, Iaccino and team have been unloading long positions in stocks as their upside targets get hit, narrowing holdings to just three names: AbbVie (ABBV), Best Buy (BBY), Big Lots (BIG). Taking one, the bullish position on Best Buy is easily explained - when folks get stimulus checks, they’re likely going to go out and buy a new TV.
Turning to the new presidential administration, Iaccino is somewhat in agreement about the conventional and generally business-friendly nature of its makeup - plenty of recycled D.C. hands who have long histories of being mostly amenable to corporate interests. That said, Iaccino has gone through an early version of some tax proposals, and is seeing some unfriendly things like taxing of overseas profits, and corporate and payroll tax hikes. The likelihood that all these things pass may be rather small, but Chief Financial Officers should nevertheless be prepared to act.
Of the big news of the past few days - and that’s the outsized moves in the likes of GameStop (GME), Bed Bath & Beyond (BBBY), Dillard’s (DDS), Express (EXPR), and BlackBerry (BB), among others - Iaccino suspects it’s an old-fashioned, coordinated (and thus illegal) gamma squeeze, only with online message boards being used today.
There’s plenty more, including a detailed explanation of the gamma squeeze, yet another example of buying the rumor and selling the news, and Iaccino’s outlook for currently rallying crude oil.
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