Market Update: The arrow is going up… wait… why is it going up if a big interest rate cut suggests economic weakness? Oh… you mean the economy isn’t the market, and the market isn’t the economy? Do I mean these things disconnected years ago… back in 1993? Do I mean that central bank activity to stop major financial problems like shadow banking crises or worries about the Carry Trade or China’s debt deflation trap is more important than underlying fundamentals? Yes… I mean that. We’re green.

I’ve received a lot of feedback this week from the Great Red Hat event of the Republic. That’ll happen when you look around; 16 years have passed, and nothing has changed in the financial system.

Today, I want to cover a few things.

If you’re new here, you know that we cover big ideas, opportunities, and trends… but we tend not to take ourselves too seriously.

On Fridays, I typically write a multi-subject email called “Things I Think…, " a recap of the week, musings, and other interesting things… Tomorrow, I’ll talk more about the energy sector, and on Sunday, you’ll receive the usual “Republic Speak” - a look at the week ahead in the financial markets.

Things I Think No. 1: Country Music Has a Drinking Problem

I’ve covered this… but I sat down for lunch, and the Spotify in Kooper’s North in Timonium was back on the country station. The guy’s singing about getting over his ex-girlfriend and deleting her phone numbers… or burning down the bar.

Morgan Wallen’s already asked for a double shot in the lyrics.

What’s odd is that “One Thing at a Time” is upbeat and catchy.

But I also think this is just the taped confession of an arsonist.
 

What else came on?

"Red Solo Cup" – Toby Keith: His best friend is a plastic cup. No judgment...

"Tequila" – Dan + Shay: Tequila: ruining relationships since... forever.

"Beer Never Broke My Heart" – Luke Combs: Unlike every woman in these songs, beer is the only thing that never lets him down.

"Drink in My Hand" – Eric Church: Why face your problems when you can hold a beer instead?

Shut up, industry… you’re drunk.

Things I Think No. 2: Insider Buying Picks Up… That’s Bullish

We follow liquidity… capital flows… and insider buying.

On the aggregate, insider buying picked up over the last five days. This is a relatively bullish sentiment – which has me eying everything that’s been scooped up from insiders over the last week and a half.

Here’s what I explained to be the most important chart in Finance. This is the strongest level of insider buying in three months… and the second-largest pop since February.
 

SECForm4.com
 

Remember—insider selling is constant. Many executives sell their stock because it’s part of their compensation package, which is bullish. The insiders must overcome the selling patterns (and it’s good to see less selling recently). 

No. 3: Wait… What’s the Best Rebounding Stock?

Holy crumbles… Seeking Alpha assessed the stock that gained 900% over five years after MASSIVE drawdowns. There have been 20 instances of this… with MGM International (MGM) experiencing a 58% drawdown followed by a more than 1000% gain in the same five-year stretch. Talk about reversion momentum…

What’s shocking… is what hit the list. Nvidia (NVDA) and Netflix (NFLX) made the list…

As did Tesla (TSLA), meme-stock GameStop (GME), and Block (SQ).

But the one that caught my attention… Genworth Financial (GNW).

As I explained the other night… Genworth is one of those names correlated to the performance of everyone’s favorite bailout stock, AIG (AIG). GNW collapsed during the Great Financial Crisis of 2008, falling by more than 95% and nearly bankrupt.

Once the Fed bailed everyone out, the stock went from under $1.00 to $18.45 in about two years. I assume the current chart is split-adjusted, but the returns aren’t.

Meanwhile, don’t be shocked if SkyWest (SKYW), which we recommended in January 2023 after the monster liquidity crisis a few months prior, joins this list at some point.

SkyWest was at $60.00 in March 2021. It fell under $16 by December 2022. That was a 73% drawdown.

Now, it’s back up to $81.50. That’s 417% so far.

There are still 18 months left to test this company’s incredible momentum.  

No. 4:  Finally, a Win on the Baseball Card Front

Well, it only took me a small fortune and a lot of patience. I’ve finally categorized all the extra baseball cards my other has owned for years.

Recall that he sold many of the prime 1950s Vintage cards in the 1980s, a nice influx given the Mickey Mantle and Jackie Robinson cards.

In the last two weeks, I’ve categorized about 2,500 cards.
 

There’s not a ton of “value” left, but I found many good football cards from 1953 and 1954 to complement the full Bowman sets he has from 1951 and 1952.
 

Meanwhile, I found some extra Bowmans from good, mid-tier players, including Roy Campanella, Hoyt Wilhelm, Richie Ashburn, Elston Howard, and Nellie Fox.
 

We’re selling a lot of cards. Of course, the 1951 Bowman baseball set isn’t going anywhere.

I must buy my brother and sister out for that set.

I’ll do that a little at a time.

Thankfully, I bought a pack of 2022 Minor League baseball cards last week, and I pulled this autographed Orioles third baseman Jordan Westburg’s card out of the pack.
 

It might be worth a little bit of money… but I’d prefer he gets back into the Orioles lineup than sell this card. I’ll donate it… because the Orioles are in an ugly freefall.  

No. 5: This Is Bigger Than You Think

I’ll wrap today with news that Constellation Energy is reopening Three Mile Island.

Are they going to provide cheap, affordable energy to homeowners across Pennsylvania?

Of course not. Why be silly?

They will sell electricity to Microsoft (MSFT) so that the tech company can employ artificial intelligence. I wrote about this the other day, and it’s next year's No. 1 energy trend.

The electricity rush is going to be off-grid for a while largely. I can’t get batteries connected to the ISO if I try. So, we’re seeing these other players turn to cheap forms of energy and convert AI centers into modular containers.

 The players I’ve discussed, like Marathon Digital and Crudsoe, will convert Methane into cheap fuel (with no input cost) and run these rigs. But there are dozens of players… and it’s only the first inning of this trend.

It’s a perfect business and will maintain a low carbon footprint, which I’m sure the politicians love.

Everyone’s going long tech right now… buying up anything that seems undervalued in banking, REITs, and midstream energy.

Me?

I’m driving to Gettysburg  to look at farms.

It's time to put some cash to work.

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