Can Micron Keep Running?

Rebels Edge - December 21, 2023: Summary

Key Concepts: Silver as an asset class, VIX volatility, Daycare fraud in Minnesota, Unusual options activity, Stock analysis (VU, Micron, NEO, Echoar/AS Space Mobile), NFL analysis (Ravens, Jaguars, Texas Tech).

I. Market Overview & Silver’s Rise

The discussion began with a surprising statistic: silver is now the third most valuable asset class globally, following gold and Nvidia. A chart highlighted the top 10 asset classes: Gold, Nvidia, Silver, Apple, Alphabet, Microsoft, Amazon, Bitcoin, Meta, and Broadcom. Silver experienced a staggering 140%+ return this year, a “spectacular” move that continues with ongoing options buying (specifically SLV calls). The hosts believe the rally isn’t over, citing silver’s diverse applications, particularly in the context of Artificial Intelligence (AI). Unusual activity was noted yesterday with significant buying of SLV at $64.70 and $64.50 January calls.

II. Volatility & Market Liquidity (VIX)

The VIX (Volatility Index) is currently stuck in a narrow range of 14 to 14.5, reflecting a lack of significant market movement. December has seen a substantial drop in options trading volume, falling to around 49 million from an average of over 60 million earlier in the year. This decreased liquidity contributes to the VIX’s stagnation.

III. Minnesota Daycare Fraud Scandal

A significant portion of the discussion focused on a large-scale daycare fraud case in Minnesota. A YouTuber uncovered $110 million in fraudulent claims by identifying operations with misspelled signage (e.g., “learing” instead of “learning”) and charging approximately $19,000 per year per child despite having no actual students. The Poly Market prediction market currently gives a 61% probability (up 20 points in the last day) that someone will be charged by January 31st. The fraud involved potentially exploiting care for vulnerable children, raising serious concerns. The hosts expressed embarrassment over the situation, particularly given Minnesota’s previous budget surplus and the current debt.

IV. Political Commentary & Ilhan Omar Connection

The conversation shifted to Minnesota’s political landscape, with a critical assessment of the current governor. A connection was made to Representative Ilhan Omar, specifically noting that her third husband runs a private equity firm that recently scrubbed board member names from its website. This raised suspicions about potential conflicts of interest, given the firm’s rapid growth from zero to a $25-30 million enterprise.

V. Stock Analysis & Unusual Options Activity

• VU (Bitauto Holdings Limited): Experienced a 5% increase, driven by bullish sentiment related to data centers and AI. Year-to-date, VU is up 59%, and up 14% in the last month. Analysts’ price targets average around $145-146.
• Micron Technology (MU): Showed strong momentum, with unusual options activity noted multiple times. The stock has risen from $55 in April to $294 currently, a 250% year-to-date increase. Recent earnings beat expectations (EPS of $0.478 vs. expected $0.396) with a record gross margin of 68%, and revenue up 57%. Micron’s performance is attributed to the demand for AI servers and memory.
• NEO (NIO Inc.): Shares were up in pre-market trading following positive comments about Q4 vehicle sales (30 billion yuan). Unusual activity included the purchase of 14,000 January 2nd $5.50 calls. NEO is seen as a strong competitor to Tesla, despite Elon Musk’s continued success with Tesla, Starlink, and Optimus.
• Echoar (SATS) & AS Space Mobile (AS): These space-related stocks, highlighted at a recent conference, are top communication stocks year-to-date, with gains of 360% and 240% respectively. They are positioned to compete with Starlink.

VI. NFL Analysis & Predictions

• Baltimore Ravens: Identified as a “scary sleeper” team in the AFC, despite a less impressive record. Lamar Jackson’s performance (18 TDs, 6 INTs in 12 games) and the presence of Derrick Henry were highlighted.
• Jacksonville Jaguars: Considered a strong contender, particularly with Trevor Lawrence at quarterback and the backing of Cody Campbell (a major donor). They recently defeated the Denver Broncos (12-2 at the time) 34-20.
• Texas Tech: Praised for its recent success under a coach who previously coached only high school football. The team’s improvement is attributed to significant financial support from Cody Campbell, enabling them to compete in NIL (Name, Image, Likeness) deals. The hosts emphasized the importance of NIL funding for college football programs.

VII. Notable Quotes

• “Silver is now the third most valuable asset in the world.” – Host
• “It’s embarrassing. I think we all ought to be embarrassed.” – Pete, regarding the Minnesota daycare fraud.
• “There’s a lot of reasons why there’s a heck of a lot of names going in [for governor], John, going for the shot at governor.” – Pete, on the Minnesota political climate.
• “If you don't have the money for NIL, you can't compete.” – Host, discussing college football.

VIII. Conclusion

The episode covered a diverse range of topics, from surprising asset class performance (silver) to a significant fraud case and detailed stock analysis. A recurring theme was the importance of identifying unusual activity (options trading) and recognizing emerging trends (AI, space exploration, NIL in college sports). The hosts emphasized the need for vigilance and critical thinking when evaluating market opportunities and political situations. The discussion highlighted the power of financial backing in both the stock market and college athletics.