It's 215 BC in Rome.
You're standing in the Forum, surrounded by the hustle and bustle of the ancient world's greatest city.
Amidst the stench of unwashed bodies and fish from the nearby market, something revolutionary is happening.
For the first time, citizens are buying shares in the societas publicanorum - public companies contracted by the state for massive projects like building aqueducts or collecting taxes.
Fast forward to 1380.
You're in Venice, where the air is thick with the smell of sea salt and opportunity. Traders are buying and selling government debt securities - known as &ldquo;prestiti&rdquo; - laying the groundwork for modern financial markets.
Now it's 1602 in Amsterdam.
The air is filled with the scents of spices, tar from shipyards, and the bustling energy of commerce. People are excited, gathering around the headquarters of the Dutch East India Company, marking the birth of the modern stock exchange.
Fast forward to today.
We've come a long way from those early days of investing. We've seen the rise of Wall Street, the dawn of the internet, and now, the age of artificial intelligence.
But one thing hasn't changed - the potential for life-changing profits&hellip;
If you know where to look.
Today, we&rsquo;re going to talk with James about where to look.
We&rsquo;ll rap about yesterday&rsquo;s (grand slam) summit, his SUPERSTOCK thesis, and why you should act BEFORE July 31.
Let&rsquo;s begin.
<h3>The SUPERSTOCK Thesis </h3>
&ldquo;I've been in this game for decades,&rdquo; says James, &ldquo;and I'm telling you now: we're on the cusp of another seismic shift.&rdquo;
The thesis starts with something we all know: For the past two years, megacaps have dominated the market, accounting for the lion's share of the S&amp;P's gains.
&ldquo;But here's the thing,&rdquo; said James, &ldquo;their reign is coming to an end. And I can't emphasize this enough: if you want to make serious money in the next year, you need to look elsewhere.&rdquo;
This isn&rsquo;t exactly a bolt from the blue for our paid members.
After all, James recently told paid members to sell half of their NVDA position - for a 183% gain. Why? Because the market is starting to flip - and it looks like July 31 could be the final trigger.
&ldquo;We're talking about trillions of dollars moving OUT of these large-cap names and into smaller stocks. Specifically, into what I call &lsquo;SUPERSTOCKS&rsquo;&rdquo;
James offered an example of one such SUPERSTOCK:
&ldquo;There's a tiny company in the manufacturing sector. Its revenue is up 2,000% in the last four years. For comparison, Nvidia's revenue is up 419% over the past 4 years. Amazon's is only up 104%. And Apple's? A measly 47%.
&ldquo;But here's the kicker - this company is trading for less than $2 per share. That's right, it's cheaper than your morning coffee.&rdquo;
And that&rsquo;s just one of five SUPERSTOCKS James has identified.
&ldquo;I get it,&rdquo; James said. &ldquo;Sounds too good to be true. But remember, the best-performing stocks of the past 25 years all started small. Nvidia was once just 20 cents a share. Another top performer was only 4 cents.
&ldquo;When stocks are small, they have infinitely more room to grow. And right now, thanks to everyone's obsession with the Mag 7, these tiny companies with rock-solid fundamentals have been completely overlooked.&rdquo;
But that's about to change.
<h3>Where the Wild Gains Are </h3>
In short, this is an asymmetrical bet.
The downside is limited. The upside? Tremendous.
&lsquo;Look,&rdquo; he said, &ldquo;I've been doing this for a long time. I've seen trends come and go. But this? This is different. This could be a once-in-a-generation opportunity.&rdquo;
James&rsquo; full case is right for you IF&hellip;&nbsp;
&rarr; You own any Mag 7 stocks
&rarr; You don&rsquo;t hate money
&rarr; You simply want to learn about the stocks with the MOST profit potential right now
But you need to act fast.
&ldquo;In investing,&rdquo; James went on, &ldquo;it's not about following the herd. It's about seeing where the herd is going next. And right now, all signs are pointing to these SUPERSTOCKS.&rdquo;
More on that to come.

We&rsquo;re living in an epic period of change, danger, and opportunity. The economy is blowing up in our faces. The Fed is printing trillions of dollars. People are getting fired and replaced by computers. Every day, we&rsquo;re bombarded with fake news and fake data. Crypto is eating everything online. Every &ldquo;fix&rdquo; from the government makes things worse. Technology is moving too fast for anyone to keep up.
In short, the Old World has been demolished&hellip; the new world is just beginning. Alongside the greatest wealth shift in human history. We get it. People are desperate for answers and to cut through the noise. Everyone wants to become financially secure. Nobody knows who to trust. That&rsquo;s where we can help.
Altucher Confidential&nbsp;is your guide to surviving and thriving in the age of risk, chaos, and tremendous rewards. This is not a newsletter for the faint of heart. It&rsquo;s a guide West, to the new frontier. For those who are ready to hear, James Altucher and Chris Campbell provide an updated map of the new territory for generating wealth and freedom. Consider&nbsp;Altucher Confidential&nbsp;your daily guide to building, keeping, and investing your money and breaking free from the chains of rusted, old thinking.

AltucherConfidential

Altucher Confidential is your guide to surviving and thriving in the age of risk, chaos, and tremendous rewards. This is not a newsletter for the faint of heart.

Altucher Confidential

James and the Giant SUPERSTOCK

For many moons, we've watched the Magnificent Seven (Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla) dominate the market.
These fiscal colossi have gobbled up capital like black holes, gaping maws locked open, swallowing light.
But as the old saying goes, "Trees don't grow to the sky.
As of this week, we may be witnessing a turn of the big, fat worm. The beginning of a rotation event so powerful it's already being called a "generational event."
Truth be told&hellip;
It's the kind of stuff we await with bated breath and - right this second - James is putting together several ways to play it.
<h3>Bigfoot Rides Nessie &nbsp;</h3>
Put simply, certain stocks outside of the Mag 7 made a big move this week - and in a way that has some money managers questioning their models.
Put another way&hellip;
It&rsquo;s the market equivalent of Bigfoot riding the Loch Ness Monster. In technical terms, a bonafide "three-standard-deviation" event.
Imagine you're playing darts.
Hitting the bullseye occasionally? Big deal.
Hitting ten bullseyes in a row while blindfolded? That's your three-standard-deviation event.
Some think the recent inflation report (CPI report) caused it, but we&rsquo;re not so sure.
Trying to pinpoint the exact reason for market movements is like trying to nail jelly to a wall.
What matters is that it's happening. (And what to do before the crowd.)
<h3>What You Need to Know NOW</h3>
Without stealing too much of James&rsquo; thunder&hellip;
This rotation is about the "left behinds" - quality companies that have been overshadowed.
To be clear&hellip;
We&rsquo;re not saying you should abandon the big boys. Many are still incredible companies with strong fundamentals.
BUT&hellip; even a small shift of capital away from these giants can have an outsized impact.

ALC-Issue-07.23(1)

Revenge of the Left Behind

&ldquo;What Ethereum ETF are you buying?&rdquo; 
The text came early this morning from a friend who is usually crypto-hesitant.
I admit. I haven&rsquo;t responded. I&rsquo;ll tell you what I&rsquo;m going to tell him in a moment.&nbsp;
First, let&rsquo;s reflect on how quickly things can flip.
Last year, Ethereum was sitting below $1,800. Altcoins were deep into the red.
Crypto was, by all accounts, dead.
Ethereum wasn&rsquo;t on this friend&rsquo;s radar, either. Until, that is, recently. When he heard the Ethereum ETFs are coming.
Well, they&rsquo;re here.&nbsp;
Let's break it down, shall we?
<h3>Ethereum Price Predictions&nbsp;</h3>
First off, we've got the usual suspects - BlackRock, Fidelity, and a whole gaggle of other financial behemoths - all lined up like pigs at the trough, ready to feast on the ETF pie.
They've been jumping through the SEC's hoops like trained seals, updating their 19B4 forms and S1 applications.&nbsp;
But here's where it gets interesting.
The predictions for these ETF inflows are all over the map.
Estimates range from a conservative $1-3 billion on the low end to an optimistic $7-9 billion on the high end. A middle-ground projection sits at around $4-6 billion.
Translating these projections into price predictions, we're looking at a range of outcomes by the end of 2024:
<ol>
<li>Conservative scenario: ETH around $4,400</li>
<li>Moderate scenario: ETH around $5,300</li>
<li>Optimistic scenario: ETH around $6,700</li>
</ol>
But in all of their predictions, few mentioned the biggest potential catalyst in the waiting: staking.
You&rsquo;ll recall, ETH ETF issuers had originally filed for staking. They were forced to remove it.
But if you believe SEC Commissioner Hester Peirce, staking&rsquo;s still on the table and, in her words, &ldquo;open for reconsideration as far as I&rsquo;m concerned.&rdquo;
It won&rsquo;t happen overnight, but&hellip;
If ETFs stake a significant portion of their holdings, it could lead to more ETH being locked up, reducing circulating supply - a perfect storm.
While that could push ETH higher, that&rsquo;s not even the story we&rsquo;re excited about&hellip;
I&rsquo;m talking about what&rsquo;s going to happen NEXT in the crypto markets. Beyond Ethereum ETFs.
(To answer my friend&rsquo;s question: &ldquo;None.&rdquo;)
In short, James and I believe certain &ldquo;sleeper&rdquo; cryptos are going to fly. Some of them are related to Ethereum. Some aren&rsquo;t. We&rsquo;ve written about this at length - and, don&rsquo;t worry, much more to come on that front.&nbsp;
By the way, this is not a trend limited to crypto.
In fact, James sees the same thing happening in stocks.

Ethereum: Stage 1 is Complete

They said it would never happen. They said it was impossible. They said I was out of my mind.
They were wrong.
I got an 11 ounce jar of honey through the TSA check.
The government might take my razor, my nail clippers, and my dignity - but they WILL NEVER GET MY SAVANNAH SAGE SUNFLOWER HONEY.
(It&rsquo;s a gift.)
Sure&hellip;
If we were in a dark, smoky bar, I might whisper to you in confidence: &ldquo;They were all out of the small ones.&rdquo; 
But that&rsquo;s only one part of the story. Irrelevant now.
To capitalize on the upside:
Throughout history, in all of the animal kingdom, nothing says "I love you" quite like, "I risked everything for this large size of bee vomit you like."
Unfortunately, my battle here is only half-won.
Now it&rsquo;s time to pray my flight isn&rsquo;t delayed again, from here into eternity.
And so.
While waiting here with my subpar WiFi and decentralized honey, allow me to talk about two more things &ldquo;THEY&rdquo; said will never happen.
And only ONE thing you need to do before Thursday night.
<h3>The Ethereum ETF </h3>
Remember when a guy - whose name rhymes with Flykill Paylor - declared that the U.S. would NEVER see an Ethereum ETF?
Welp.
On July 23rd (tomorrow), the Chicago Board Options Exchange (CBOE) is set to launch not one, not two, but five Ethereum exchange-traded funds.
Now, let's cut through the noise&hellip;
As sure as the sun rises, the Ethereum haters are out in full force, spreading doom and gloom.
They're claiming everything from "no demand" to "inflationary nightmares."
For example, some are writing about Ethereum's "surging supply." They're pointing to a supposed 60,000 ETH monthly increase since April.
But hold up&hellip;
Pull up a long-term Ethereum supply chart, and what do you see? A line flatter than week-old soda.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4sWE0Lkx5XrEgv8BYw3WLy/c2b641e0adf64cea64421e84e5c94ee0/ALC-Issue-07.22_2_.png" alt="pub" width="540px" />
While new ETH is created through staking, a lot is also burned (taken out of circulation) through transaction fees.
The net result is that Ethereum's total supply has remained relatively stable, not dramatically increasing as some suggest.
In reality&hellip;
Only 10% of all ETH is sitting on exchanges right now. The other 90% is locked up, staked, or in self-custody.
Meaning? If demand skyrockets, the possibility of a supply squeeze is real.
But, look&hellip;
We&rsquo;re not here to predict the daily swings. The launch of these ETFs could spark a "sell the news" event, too. But don't let the naysayers fool you.
At the end of the day, Ethereum is the biggest blockchain ecosystem on the planet. Love it or hate it, Ethereum is here to stay, and these ETFs are just another step in crypto&rsquo;s journey to the mainstream.
But there&rsquo;s one more trend you should be aware of, maybe even bigger than Ethereum&rsquo;s profit potential;
<h3>The Most Hated Stocks </h3>
You probably noticed.
Lately, James has been talking about a class of stocks he's calling "super stocks."
And he&rsquo;s getting (a little) flak.
These super stocks are different from regular stocks. They&rsquo;re also often wildly hated. James says this is the year they&rsquo;ll outperform.
What makes them intriguing right now? For one, they have an edge that allows them to navigate market challenges better than most.
Also, they're not just flash-in-the-pan opportunities - but rather companies with solid foundations and promising futures.
Of course, as with any investment strategy, there are skeptics.
Some argue that James's approach may be overly optimistic or based on temporary market conditions. Others, however, are intrigued by the potential.

ALC-Issue-07.22(1)

Bee Barf, ETH, and Hated Stocks

Reporting from Savannah, Georgia&hellip; 
Hell is real.
It may appear in many forms to many different people.
But one of those forms is - without doubt - a halted TSA line where an infinite number of bosses look at a bag, scratch their chins, and call their bosses to look at that same bag. Forever.
Yesterday, a woman had some suspicious stuff in her luggage. So suspicious, in fact, they stopped everything and scrambled the boss brigade.
She was right in front of me.
(So close.)
One TSA agent called his boss, who then came, scratched his chin, then called his boss. His boss came, took a look, called his boss, and so on. We had five levels of bosses involved before anyone even moved the bag.
Meanwhile, mind you&hellip;
I&rsquo;m standing next to the scanner machine - closest to the bag - with nowhere to go.
When they finally had an underling pull it out of the machine and place it carefully on the table, they all gathered around it like a group of teenage boys staring at a rattlesnake.
Yeah, you guessed it: They were waiting for directions from yet another boss. I think we were at seven boss&rsquo; bosses at this point.&nbsp;
Finally, someone took a deep breath and unzipped the bag.
He fished out a half-filled metal flask and a battery pack, holding them between two fingers like dead rats strapped to dynamite.
Behind me, the line kept growing longer, all watching the scene play out.&nbsp;
The bosses scratched their chins thoughtfully. They told an underling to put them through the machine again.
Turns out - gasp - it was in fact a flask and a battery pack.
Perhaps I&rsquo;m being dramatic.
Turns out, I got lucky after all.
Unbeknownst to all of us, an even bigger security threat was brewing - this one from the deep pits of the interwebs.
Enter the global cyber airport meltdown hell, a rung much further down in Dante&rsquo;s epic.&nbsp;
<h3>&ldquo;IT&rsquo;S ALL TOAST. ALL OF IT!&rdquo; </h3>
&ldquo;I got my first hand-written boarding pass today,&rdquo; says Akshay Kothari.
Kothari, if you don&rsquo;t know, is the co-founder of all-in-one workspace app Notion. He&rsquo;s far from the only one who&rsquo;s sat in airport purgatory today for hours on end.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7CI2usDZCpAlz0rqKyTf5n/447cbba3db54269da8283fe81e472d2f/ALC-Issue-07-19_2_.png" alt="pub" width="540px" />
It&rsquo;s only been a few hours and they&rsquo;re already calling it one of the biggest IT outages&hellip; ever.
First thing to know: be on guard for the next week or so. Hackers and criminals will try to use this to trick you. They&rsquo;ll pretend to be IT professionals who want to help you.
Second thing to know, this outage happened because the Internet is broken.
After all&hellip;
How is it that airlines, banks, media, payments, emergency systems and healthcare can all go down at once - all around the world?&nbsp;
The answer:
People don't usually care about upgrading their tech until it blows up in their faces and costs them a fortune.
Whether this latest fiasco was an attack or just incompetence, it&rsquo;s a stark reminder of how fragile our connected world is.
But this deserves nuance.
<h3>The Worst of All Worlds </h3>
As much as I rage against centralized systems in these digital leaves&hellip;
CrowdStrike, the apparent cause for the outages, is in fact a distributed (decentralized) system.
It employs a cloud-based platform, CrowdStrike Falcon, which leverages a combination of endpoint protection, threat intelligence, and threat hunting capabilities.
The system processes massive amounts of data weekly and relies on a distributed network of agents and cloud instances to monitor and respond to security threats in real-time.
BUT, here&rsquo;s the problem:&nbsp;
That distributed network of agents is 100% reliant on a centralized client.
This is actually the worst of both worlds when disruptions inevitably happen. A complex distributed system that hinges on one client is even riskier than a 100% centralized one.
It's just as easy to crash but a nightmare to revive.
This goes to show: You can&rsquo;t have one foot in the door and one foot out.
<h3>Cryptographers to the Rescue</h3>
As the Internet gets more complex, distributed systems are going to become more necessary - and they can&rsquo;t rely on siloes to keep them going.
The grandfathers of the Internet - with the development of the ARPANET - understood this. They were tasked with creating a communication system that could withstand nukes and keep going.
In this week&rsquo;s Early Stage Crypto Investor, we published a report on one crypto project helping to turn the Internet right side up.
And, to boot, they have the attention of several top government agencies - including the USAF and DoD.
I&rsquo;m calling it the &ldquo;Stovepipe Slayer&rdquo; - and it&rsquo;s among many under-the-radar crypto projects in our portfolio.

ALC-Issue-07-19(1)

Global Cyber Meltdown Hell

Back in the day, we used to trade seashells.
Then some wizard came up with an idea:
"Hey, what if we smash these shiny hard rocks until they're flat and shiny, then act as if they have the value we stamp on them?" 
And just like that, coins were born.
Fast forward through a montage of kings, wars, and questionable fashion choices, and some horrible person thought, "You know what would make this better? If we made money out of dead trees!"
Enter the era of paper money, where we all agreed that paper rectangles are worth something.
Right now, we&rsquo;re going through another shift.
The bits of paper are dying. Numbers on a screen rules everything around me. By 2030, less than 1% of transactions will happen in cash.
The question on everyone&rsquo;s mind: What does the future of money look like?
<h2 class="subhead">Compute as Currency</h2>
According to OpenAI&rsquo;s Sam Altman, the next big leap isn't JUST going to be some new form of digital cash&hellip;
It's going to be compute power itself.
See, Altman's betting on an explosion in demand for compute. We're talking levels hard to even imagine right now.
It has little to do with running chatbots or rendering graphics, either. We're looking at simulating entire economies, revolutionizing scientific research, modeling the brain, stuff like that.
In this world, compute is the limiting factor for future progress. More compute means smarter AI, better scientific models, faster breakthroughs.
Let&rsquo;s imagine Altman&rsquo;s right: The economy is measured in compute.
Could this be the holy grail of currency?
<h2 class="subhead">Energy in Disguise</h2>
Relatively long ago&hellip;.
Buckminster Fuller and Henry Ford - both intellectual titans in their own rights - proposed a bold experiment: a currency directly tied to energy.
Their argument: all forms of money are just proxies for energy usage.
Whether it's human labor, fossil fuels, or electricity, currency allows us to:
<ol>
<li>Store Energy: Save our work for later use.</li>
<li>Transfer Energy: Trade our effort for someone else's.</li>
<li>Measure Energy: Quantify how much work something is worth.</li>
</ol>
Thus, they concluded&hellip;
ALL forms of currency, at their core, are ways of quantifying and trading energy&hellip;
Currency, in other words, is energy in disguise - money is energy with a fake plastic nose.
<h2 class="subhead">Compute as Currency?</h2>
While there's a relationship between computation and energy use, they are not identical.
Computation involves processing information, which requires energy, but also depends on algorithms, hardware architecture, and other factors.
BUT, Bitcoin aside (for now)...
It&rsquo;s the closest yet proposed to stripping off the disguise.
As Fuller and Ford argued:
By using a universal, objective measure of value, the system could eliminate abstractions that create distortions - intentional or not - in the global financial system.
This, they said, would free us from the machinations of central banks and the military-industrial complex.
Gold, in this case, is insufficient.
Here&rsquo;s the front page of the New York Tribune on Dec. 4, 1921.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/7JNN8Em4imvoY5kUILqzKP/dacd01ef000b02af67df24163a5d9625/alc-img1-07-18-24.png" alt="image 1" width="540px" />
Onto something?
<h2 class="subhead">Mint Your Own Energy</h2>
The argument: an energy-based currency would make the value of energy production and consumption more transparent.
People would be more aware of the energy costs associated with different products and services.
Moreover, anyone who can produce energy efficiently could essentially "mint" money.
In that case, the direct link between energy production and economic value would spur innovation in smaller-scale, high-efficiency energy technologies.
Every backyard inventor and garage tinkerer would suddenly be on the front lines of the energy revolution.
Decentralized production, among other things, would reduce the need for long-distance power transmission, making the overall system more efficient.
As Fuller and Ford alluded:
This would lead to a significant redistribution of power, away from those who control financial abstractions and towards those who can innovate in the realm of the real, the hard, the physical.
(HMMM&hellip;)
Here&rsquo;s one thing we know:
No matter what the future of money looks like - fake plastic noses or not:
AI will have a role to play in this. Crypo, too. Especially when they make love and have babies.
More on that tomorrow.

alc-hero-img-07-18-24

Money: Energy’s Fake Plastic Nose

Hillbilly Elegy was a great book.
Vance and I grew up in the same city: Middletown. According to Google, our houses sat seven minutes away.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/3I35B0BYZNZAuPz0OJzwtJ/310323991fa9d97011b5e48877dae75d/alc-img1-07-16-24.png" alt="image 1" width="540px" />
Interestingly, both of our families also hailed from eastern Kentucky.
His from Jackson, mine from Hazard. They were a part of a mass-migration from the south in search of opportunity.
(Growing up, everyone called Middletown &ldquo;Middletucky&rdquo; because of&nbsp; the large influx of hillbillies.)
As part of this heritage, Vance called the matriarch of his family &ldquo;Mamaw.&rdquo;
I called mine &ldquo;Wawa.&rdquo;
Vance&rsquo;s birth name was Bowman, which has Scottish origins - it means &ldquo;archer.&rdquo;
Campbell? Scottish as it gets. (Campbell means &ldquo;crooked mouth.&rdquo;)
As far as personal history goes, that&rsquo;s where I hope the similarities end.
The Campbells are famously associated with various curses and dark tales, largely due to their involvement in events such as the Massacre of Glencoe in 1692.
(Never cross a Campbell. That stuff rubs off.)
Fortunately for Vance, I couldn&rsquo;t find any such curses from strange witches.
And yet, even if Vance sits in the VP seat&hellip; as the homespun &ldquo;tech bro&rdquo; that&rsquo;s pro open innovation&hellip;
I remain a political skeptic.
Ultimately, I subscribe to the Douglasian political philosophy&hellip; as detailed in the second-greatest text on political theory in the universe,&nbsp;The Hitchhiker&rsquo;s Guide to the Galaxy:
"Anyone who is capable of getting themselves made [Vice] President should on no account be allowed to do the job."
Our strategy remains the same: We like to invest in ways that bolster our portfolios no matter which way the wind blows.
And, no less&hellip;
There are still economic realities we have to contend with - no matter who wins in November.
Our go-to numbers guy Bob Byrne, who's traded through more market swings than a playground in a hurricane, recently broke down the economic flavor of each White House crew.
Bob, never one to sugarcoat, noted both scenarios come with headaches - but also some juicy investment opportunities.
Check it out below.
Read on.
<h1 class="centered headline nbp" style="text-align: center;">The 2024 Election Playbook</h1>
Bob Byrne
For better or worse, the days are winding down until Americans can vote for incumbent Joe Biden or his predecessor, Donald Trump.
Prediction market sites like PredictIt give Trump a big edge over Biden.
I agree.
But I&rsquo;m less concerned with making a political prediction and more focused on preparing my portfolio for whoever the winner is.
If you examine the performance of stocks under Democratic and Republican administrations, you&rsquo;ll find that the markets have typically performed well under both parties. Neither party can claim to have consistently delivered superior economic or stock market performance.
According to Bloomberg, the S&amp;P 500 has delivered an average annual return of around 10% through Democratic and Republican administrations over the past 67 years.
The only time the stock market failed to produce a positive return was during a financial crisis, as we saw in 2008, or during periods of stagflation, as we witnessed in the 1970s.
The key word here is stagflation.
From everything I&rsquo;ve seen, including recent economic data, the governing records of both presidents, and proposed policies for 2025 and beyond, investors need to prepare for higher inflation under a Trump administration and stagflation under a second Biden administration.
Thankfully, we can prepare beforehand for how to best invest under either scenario.
<h2 class="subhead">The Road to Stagflation Begins with Bidenomics</h2>
Stagflation, which is high inflation combined with high unemployment and stagnant economic growth, isn&rsquo;t something investors have faced for decades.
Our most recent case study is from the 1970s. Even then, we can&rsquo;t point to a single event that triggered stagflation.
A combination of loose monetary policy, oil supply shocks, cost-push inflation, and Federal Reserve policy mistakes caused the economic debacle.
[cost-push inflation occurs when the cost of production increases, resulting in higher prices for finished goods and services]
While our situation doesn&rsquo;t look as dire, the late April release of first-quarter gross domestic product (GDP) was terrible. The personal consumption expenditures price index (PCE), a key inflation metric for the Federal Reserve, also came in red hot, suggesting that inflation is beginning to heat up.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/6BKR2THPYtRsYPZHLnEosW/ea43bd5237c991d19f014b48601a12ed/alc-img2-07-16-24.png" alt="image 2" width="540px" />
Source: Michael Renolds/Shutterstock
Recent GDP and PCE reports indicate that stagflation is a risk, but that&rsquo;s only the beginning.
Long before the GDP report revealed a weakening economy, Biden&rsquo;s policies were stoking inflation.
We can point to programs like the $1.9 trillion COVID-19 relief package, the $1.2 trillion Infrastructure Investment and Jobs Act, and the $739 billion Inflation Reduction Act as policies that injected too much money into the economy.
While not as dramatic, the president&rsquo;s cancellation of the Keystone XL Pipeline, the moratorium on oil and gas production on Federal lands, and his pursuit of uneconomic green energy initiatives are criticized for reducing oil supply and increasing energy costs for consumers and businesses.
Then there are his trade and tariff policies (which are similar to Trump's) and student loan forgiveness programs, both of which are wildly inflationary.
The bottom line is that massive fiscal stimulus, restrictive energy policies, protectionist trade, and tariff policies contribute to higher inflation.
Remember, inflation is only part of the equation. We also need economic stagnation.
Biden&rsquo;s made it clear that if re-elected, he&rsquo;ll hike taxes on the ultra-wealthy and corporations, increase the tax on stock buybacks, and add a 25% minimum income tax on billionaires. Oh, and if there&rsquo;s a way to squeeze in a tax on unrealized capital gains, he&rsquo;s also open to that.
Increased taxes on corporations or individuals remove spendable and investable cash, restricting economic growth.
In other words, while Bidenomics may intend to &ldquo;even the playing field&rdquo; among lower, middle, and upper-income earners, the result will be reduced economic output. And between Biden&rsquo;s inflationary policies and desire to stick it to corporations and the wealthy, the ingredients are in place for stagflation to take hold.
<h2 class="subhead">A Recipe for Trumpflation</h2>
I have always believed that while Americans will tell you how important issues like health care, immigration, and clean energy are to them, in the voting booth, it all comes down to their wallets.
If a voter&rsquo;s financial health &ndash; can they feed, house, and provide for their family &ndash; has improved under the current president, he&rsquo;s inclined to give him a second term. If not, the challenger gets consideration.
An inconvenient truth for President Biden is that Americans believe Donald Trump is better equipped to grow the economy, tame inflation, and improve their living standards.
Despite what the government tells us, we know inflation is a problem.
And unless you don&rsquo;t eat, consume energy, or need housing, it&rsquo;s safe to say the government-reported inflation numbers are wildly underestimating the actual price increase.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/4DjxvncCmUZQgVO3GpD5lR/0648fcc6b6f7c3fc385e39a3c7d0495a/alc-img3-07-16-24.png" alt="image 3" width="540px" />
Under President Trump, inflation remained tame.
Sure, he came to office during an economic expansion, when interest rates were low, and left after the economy had been ravaged by COVID-19, again, when interest rates were low, but that doesn&rsquo;t change the fact that inflation and interest rates were low during his tenure.
Fast-forward to President Biden and Americans have seen their living standards flatline (if not decline), the cost of virtually everything skyrocket, and mortgage rates surge.
The stock market may be at all-time highs, but if wages and disposable income aren&rsquo;t outpacing inflation, all the green arrows on Wall Street won&rsquo;t mean a thing.
Americans don&rsquo;t believe they're better off financially under President Biden&rsquo;s leadership.
Sounds great for Trump, right?
Well, sort of.
Trump has called for 10% tariffs on all imports, 100% on automobiles made outside the U.S., and a minimum of 60% on Chinese goods.
He even sat down with TIME Magazine at his Mar-a-Lago Club in Palm Beach, FL, in mid-April and said that he does not believe his tariffs and protectionist policies will drive up prices in the U.S.
Anything&rsquo;s possible, but I doubt many economists outside Trump's circle of trust will support his economic views.
Trump&rsquo;s inflationary woes don&rsquo;t stop with his protectionist policies.
He wants to lower interest rates, make the 2017 tax cuts permanent (and reduce them further), and deport millions of illegal immigrants from the U.S.
Wanting to lower interest rates is fine. President Biden would also like that, preferably before Americans vote in November.
However, a loose money policy (lower interest rates) before inflation is under control ultimately sends inflation through the roof.
Making the 2017 tax cuts permanent, while likely adding trillions to the deficit over the next decade, will help stave off stagflation. Tax cuts are likely the medicine the economy requires to help stave off stagflation.
A massive crackdown on immigration is a whole other can of worms. While illegal immigration is a huge problem, removing cheap labor from the U.S. economy doesn&rsquo;t bring prices down &ndash; it sends them straight up.
The bottom line is that while a Trump presidency accompanied by tax cuts and deregulation will likely stimulate many areas of the economy, there&rsquo;s no question that his positions are a recipe for surging inflation.
<h2 class="subhead">Your Stagflation Investing Playbook</h2>
If Bidenomics leads us into stagflation, we&rsquo;ll face a nasty combination of high inflation, slow or no economic growth, and rising unemployment. In this environment, stocks, especially growth-oriented or economically sensitive companies, and bonds trade poorly.
The stocks that emerge unscathed from a period of stagflation are those with low price-to-earnings ratios, strong dividend yields, and pricing power. Focus on value-oriented, consumer staples, utility, and healthcare companies.
Tangible assets like real estate, commodities, and precious metals can act as inflation hedges. Similarly, commodity-based stocks (oil &amp; gas, agriculture, base, and precious metals) should outperform during stagflation.
Long-term bonds will likely perform terribly during high inflation and a rising interest rate environment, but shorter-duration Treasuries and Treasury Inflation-Protected Securities (TIPS) that carry little interest rate risk are a great way to preserve purchasing power.
Cryptocurrencies didn&rsquo;t exist during the 1970s stagflation.
Still, if you can stomach the volatility, this alternative asset could outperform as it&rsquo;s not tied to economic output and could be viewed as an inflation hedge.
The bottom line is that if Bidenomics leads us into a period of stagflation, we&rsquo;ll want to focus on assets with intrinsic value, pricing power, or some method of protecting against inflation.
Diversifying between gold or gold stocks, oil companies, stocks in defensive sectors, and Treasury Inflation-Protected Securities (TIPS) is a great way to navigate a Bidenomics debacle proactively.
<h2 class="subhead">Putting Money to Work During Trumpflation</h2>
Putting money to work during moderate economic growth accompanied by high inflation isn&rsquo;t terribly different from investing during stagflation.
We still want to focus on tangible assets that hedge against inflation, like real estate or investment trusts (REITs), commodities, precious metals, the companies that mine them, and TIPS.
But when it comes to investing in traditional stocks, we don&rsquo;t only want to consider things like healthcare and consumer durables.
While it&rsquo;s true that high inflation can negatively impact stocks with high valuations, like growth stocks, the bluest of the blue chips like Nvidia, Microsoft, Amazon, and Advance Micro Devices should outperform.
The key to investing in growth stocks during periods of inflation is to focus on companies with rock-solid balance sheets (strong cash flow and little to no debt), far above-average revenue growth, and no need to borrow money.
We haven&rsquo;t talked about cash.
If holding a large cash balance while inflation surges scares you, that's good. It should scare you. Every day that inflation surges, the purchasing power of your cash plummets.
A simple way to remain &ldquo;liquid&rdquo; while hedging against inflation is to look at an ETF like the iShares 0-3 Month Treasury Bond ETF (SGOV). This ETF mimics the returns of U.S. Treasury Bonds with remaining maturities less than or equal to three months.
I use this ETF anytime I have spare cash in my account that I&rsquo;m not ready to deploy into other investments. At current rates, I&rsquo;m paid about 5.1% (annually) to park my cash in SGOV. Best of all, the market for SGOV is liquid, and I can sell it at any time without penalty.
The media portrays inflation as the boogeyman, but it doesn&rsquo;t have to be as scary and painful as the talking heads on CNBC make it out to be.
The key is to ensure that your money works for you, offsets the effects of high inflation, and maintains your purchasing power.
Investing in tangible assets like real estate or REITs, commodities, precious metals and mining stocks, blue chip growth stocks, and TIPS will keep your portfolio balanced and diversified and shield you from the effects of inflation.
And remember, if you have spare cash gathering dust in your account, consider an ETF like SGOV to earn a nice dividend while you wait for another investment opportunity.
Disclosure: Bob Byrne is long SGOV.

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2024 Election Playbook

On January 30, 1835, President Andrew Jackson was attending the funeral of Congressman Warren R. Davis at the Capitol Building in Washington, D.C.
As he exited the East Portico, Richard Lawrence, a house painter who had been stalking Jackson, saw his opportunity.
For context&hellip;
Lawrence apparently believed he was King Richard III of England and that Jackson was somehow preventing him from claiming his rightful throne.
As Jackson passed by, Lawrence stepped out from behind a pillar, drew a pistol, and fired at point-blank range. The gun misfired with a loud "pop," failing to discharge its bullet.
Jackson, despite being 67 years old and in poor health, immediately realized what was happening and lunged at Lawrence with his cane raised.
Lawrence, undeterred, pulled out a second pistol and attempted to fire again. Incredibly, this gun also misfired.
The odds of two guns misfiring in such quick succession were later calculated to be 1 in 125,000.
Sheer luck? Divine intervention? I have no idea.
Doesn&rsquo;t matter. Point is, it happened.
Similarly, the odds of Trump dodging that bullet - (although I&rsquo;m sure his ear disagrees with that framing) - were equally slim.
In almost all cases in history&hellip;
Assassination attempts on this scale mark clear before-and-after points in American history. They tend to serve as dividing lines for historians and social scientists.
Chances are, July 13 will be no different.
As you know, we aren&rsquo;t a partisan letter.
We aim to understand and analyze events from a broad perspective, looking beyond the immediate headlines to the deeper currents.
And it&rsquo;s hard to ignore the gravity of what has just happened. I&rsquo;ll be the first to admit: I have no clue what will come of it.
If the prediction markets are any indication - although they have problems - Trump&rsquo;s win is now in the bag.
Sticking to our normal beat - the markets:
If they&rsquo;re right, here&rsquo;s one thing we can say&hellip;
We&rsquo;re looking at a huge potential turnaround for crypto. Especially now that we know Trump&rsquo;s VP pick.
<h2 class="subhead">J.D. Vance</h2>
Vance is no stranger to crypto - and has come out - with zero ambiguity - in support.
In fact, he&rsquo;s been spending much of his time on regulatory clarity. As of late, Vance has been circulating an industry-friendly bill that claims to provide way more clarity than its counterpart, FIT21.
FIT21 proposed handing the bulk of crypto oversight to the Commodity Futures Trading Commission (CFTC) rather than the Securities and Exchange Commission (SEC).
Vance's bill, on the other hand, takes a simpler approach to determining which digital assets the SEC would oversee versus the CFTC.
Vance has also shown support for crypto in other ways:
a. He voted to get rid of the SAB 121 rule, which requires banks holding crypto for customers to list these assets as liabilities on their balance sheets, unpopular in crypto for obvious reasons.
b. He criticized the SEC for how they handled crypto regulation.
c. Public records show he has owned Bitcoin since 2022 - somewhere between $0 and $250,000 worth.
In short&hellip;
If Vance becomes Veep, the crypto industry might see clearer regulations, making it easier for crypto companies to operate.
BUT
There&rsquo;s more to this story&hellip;
Much more on that tomorrow.

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Shot, Chaser

"Myth," said Joseph Campbell, "provides guidance and meaning to individuals and societies."
Campbell (no relation, alas) believed myths offer a roadmap for navigating life's challenges and understanding one's place in the world.
He also believed myths contain within them timeless hidden wisdom. For example, one common thread in mythologies all around the world is this:
Balance of power is everything.
When power concentrates too much, the world grows dark. When it is distributed, the universe is in balance and the people thrive.
Think about it.&nbsp;
In Ancient Greece, the three Fates &ndash; Clotho, Lachesis, and Atropos &ndash; shared the responsibility of shaping mortal lives. Norse mythology echoed this with the Norns &ndash; Urd, Verdandi, and Skuld &ndash; who controlled the past, present, and future together.
Hinduism's Trimurti &ndash; Brahma, Vishnu, and Shiva &ndash; maintains existence through their combined powers. In Ancient Egypt, the Four Sons of Horus protected the deceased's organs, ensuring a soul's journey to the afterlife.
To be sure, this theme persists in modern myths, too.
Marvel's Infinity Stones each govern an aspect of existence, but united, they offer mastery over the universe.
In Pirates of the Caribbean, the "Pieces of Eight" combine to unleash the sea goddess Calypso.&nbsp;
Harry Potter would have seen the value of using this strategy, although the sight of it might trigger some PTSD. Voldemort's Horcruxes spread his essence across many objects, making him nearly invincible.
Which brings us to today's subject: crypto.
And the little-known crypto project poised to spread Ethereum&rsquo;s essence across millions of devices, making it more resilient, faster, cheaper, and more reliable.
And pretty much EVERYONE is focused on the wrong place.
<h2 class="subhead">Ethereum&rsquo;s &ldquo;Secret&rdquo; Roadmap</h2>
When Jensen Huang, CEO of Nvidia, talks about technology, people listen.
And why wouldn&rsquo;t they?
Recently, when asked about Ethereum, he said this:
&ldquo;It&rsquo;s now established that Ethereum is going to be quite valuable&hellip;. It&rsquo;s legitimate. It&rsquo;s established. There&rsquo;s a lot of credibility. It works well.&rdquo;
No less&hellip;
When Ethereum&rsquo;s founder, Vitalik Buterin, talks, people listen.
About six months ago, Vitalik was talking about the Ethereum roadmap. He pointed out one specific technology that would be a huge deal in the near future.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/5ojGkqLfdnZxzHzYaxtoZu/b79a2a3f0567ca60567691844db923c6/alc-img1-07-12-24.png" alt="image 1" width="540px" />
He recommended that builders and users of Ethereum went &ldquo;all in&rdquo; on this technology to preserve Ethereum&rsquo;s decentralized power.
That technology exploded on the scene.
Thing is, we were ready for it.
<h2 class="subhead">Check Your Inbox</h2>
Early Stage Crypto Investor members received a report today that showed the ONLY WAY to invest in this strategy.
To be sure, this under-the-radar crypto has been in our portfolio long before Vitalik made his announcement.
BUT
Given the recent downturn, we see a clear double-down opportunity.
I go into more detail in the report, here&rsquo;s the gist:
&rarr; Vitalik gave its technology his blessing &rarr; It has 10 TIMES more usage than it did in January &rarr; It has more than 12 TIMES more Ethereum using its network (from $250 million in January to $3.2 billion&rsquo;s worth today) &rarr; And, due to market conditions, it&rsquo;s trading at a lower price than it was in January
Therefore, we believe it is undervalued by a long shot.
If you, like us (and Huang), believe in Ethereum&rsquo;s future, this one seems like a no-brainer.
Members will find the report in their inboxes. Title of email: &ldquo;Double-Down Report Enclosed&rdquo;.

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Ethereum: Voldemort Gets it

The year was 2012.
The much-anticipated apocalypse, as forecasted by some readings of the Mayan Calendar, did not come to pass.
For better or worse.
So, of course, we all had to awkwardly slink back to work on January 1st and apologize to our bosses.
(Or was that just me?)
Instead, something even more unexpected happened: a revolution in medicine began.
While preppers were busy stockpiling doomsday beans&hellip; Emily Whitehead was undergoing a revolutionary biotech treatment.
You might recall the story.
Emily was only six when diagnosed with acute lymphoblastic leukemia (ALL). After her parents tried all the go-to treatments and ran out of options, they took a leap of faith with an experimental therapy - CAR-T cell therapy.
The story goes like this: T-cells, the immune system&rsquo;s foot soldiers, are always on the lookout for intruders. Normally, they&rsquo;re pretty good at their job.
But cancer cells are sneaky.
Like a politician during a budget crisis, they hide, they disguise themselves. They evolve.
So, scientists asked, what if we could give these T-cells a new set of eyes&hellip; a way to spot cancer no matter how well it hides?
That&rsquo;s where the &ldquo;chimeric antigen receptor,&rdquo; or CAR, comes in.
Scientists take a patient&rsquo;s T-cells and send them to boot camp in the lab. There, they&rsquo;re &ldquo;trained&rdquo; to express CARs, which are like high-tech surveillance equipment.
Putting it plainly:
Doctors took Emily&rsquo;s T-cells, equipped them with special &ldquo;find and destroy&rdquo; orders for cancer cells, and sent them back into her body.
And guess what? Within weeks, Emily&rsquo;s leukemia was in full retreat. She became the first pediatric patient to be saved by this groundbreaking therapy.
Her story gained worldwide attention and has been featured in various media outlets, including a documentary called Cancer: The Emperor of All Maladies.
And so far so good.
<img class="aligncenter" src="https://images.ctfassets.net/vha3zb1lo47k/2ruEl39CxBlEhnvDDLIFQh/72eba353b5b5d36e27630f253b4131ba/cancer-free-alc.png" alt="Cancer-Free" />
Alas, there&rsquo;s a catch: CAR-T therapy isn&rsquo;t perfect.
It can cause severe side effects, like cytokine release syndrome, where the immune system goes into overdrive, leading to high fever and inflammation.
If chemotherapy is like using a sledgehammer to fix a watch&hellip;
Then CAR-T is like using a flamethrower to take out a mosquito - effective, yes, but also potentially hazardous.
And then there&rsquo;s the cost.
From snout to tail, CAR-T therapy can cost up to $1 million per patient, putting it well out of reach for the many.
Fast forward to today&hellip;
We&rsquo;re riding the wave of another medical revolution - this time fueled by artificial intelligence.
<h3>Super Molecule Shufflers </h3>
As you read this, AI-driven platforms are supercharging their abilities to design custom drugs at unprecedented speeds and cost.
Take the case of a recent patient with a rare form of cystic fibrosis. By decoding the patient&rsquo;s genetic quirks, AI quickly pinpointed a promising molecule, which then passed preclinical tests with flying colors.
Boom.
A process that used to take years now took mere months.
Moreover, AI can help determine the optimal dosage for each patient, reducing the risk of adverse reactions and the costs associated with treating those reactions
To be sure, the implications of programmable personalized medicine extend beyond rare diseases.
For common conditions like cancer, diabetes, and heart disease, AI can help identify which treatments are most likely to be effective for different patient subgroups - all based on their genetic makeup, lifestyle, and environmental factors.
This precision medicine approach not only improves outcomes but also reduces the trial-and-error aspect of treatment.
This is the promise of programmable personalized medicine: leveraging advanced tech to decode biology and deliver the best possible therapies, quickly and affordably.
All that&rsquo;s to say&hellip;
If you&rsquo;re still stocking up on beans, waiting for the world to end&hellip;
Perhaps you should hedge your bets and stock up on some biotech, too.

bunker-beans-alc-hero

Awaiting doomsday? Here’s one way to hedge your “beans in the bunker” portfolio. 

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