Little Tech’s Election Power Play
“Little Tech” Split-Tickets the Election
Courting the crypto vote has reached new heights in this election cycle.
At the Bitcoin Conference earlier this year in Nashville, erstwhile candidate Robert F. Kennedy Jr. pledged to build a federal Bitcoin reserve of 4 million coins.
And Donald Trump, who once called Bitcoin “a scam,” carried forward the idea of a strategic national Bitcoin stockpile, promising to make the U.S. the “crypto capital of the planet.”
Even Kamala Harris — through surrogates — has signaled tepid support for “digital assets.”
This political pivot comes despite crypto's admittedly turbulent history, including price volatility and high-profile scandals like the FTX collapse.
Nevertheless, billionaire Brad Garlinghouse, CEO of Ripple Labs, views this election season as a watershed moment…
“This is the most important election we've had, but I also believe no matter what happens, we're going to have [more] pro-crypto, more pro-innovation… than we've ever had,” Garlinghouse says.
Ripple Labs, a veteran crypto company known for its crypto and “native token” XRP, has been at the forefront of this political engagement.
The company has made significant donations to pro-crypto PACs and campaigns — including $45 million to the crypto-centric PAC Fairshake — featured heavily in yesterday’s 5 Bullets.
“Our contributions to Fairshake are just one of the many ways Ripple will actively invest in educating voters on the role crypto will play in the future and the dangers of the anti-crypto stance some policymakers are clinging to in Washington,” says Garlinghouse.
Garlinghouse continues to express optimism about the post-election landscape — while not publicly endorsing a candidate himself.
Not so for Fairshake’s third largest donors: the VC firm Andreessen Horowitz…
Marc Andreessen and Ben Horowitz appear to be employing a strategy of “split-ticketing” to hedge their bets on presidential candidates.
Federal Election Commission filings reveal that Andreessen and Horowitz each contributed $2.5 million to a pro-Trump super PAC, a move that shocked Silicon Valley.
“At the time, they said they supported Trump’s policies as most beneficial to cryptocurrency and startups, a position they called the ‘little tech agenda,’” Bloomberg reports.
Andreessen himself went on to donate the maximum legal amount to Trump's campaign and the Republican Party. But Horowitz was cagey…
“I’m going to have a lot of friends who are probably pissed off at me for saying anything nice about President Trump,” Horowitz said in July. “For little tech, we think Donald Trump is actually the right choice.”
More recently, Bloomberg says: “Horowitz in October made another surprising announcement when he informed his firm that he’d also be making a ‘significant’ donation to Vice President Kamala Harris’ campaign, despite not knowing or endorsing her policies.”
It’s a strategy that the Fairshake PAC believes will guarantee them, well, a fair shake in the Oval Office — regardless who wins.
But as Garlinghouse says pointedly: “No matter what happens, we're going to leave behind a failed approach from the Biden administration.”
For instance? Because of the current regulatory challenges in the U.S., 95% of Ripple's business occurs overseas. At present, Garlinghouse would advise fintech startups to “incorporate outside the United States.”
But he’s confident in the long-term prospects of crypto here stateside. “We're going to see forward progress, and I certainly am looking forward to that.”
“Anybody who doesn't believe that no matter what, we're going to end up in a better place,” Garlinghouse concludes, “is not paying attention.”
The Psychology of Earnings Surprises
“When companies consistently beat their expected earnings, it helps drive the stock price higher” — not necessarily for the logical reason you assume, according to trading pro, hedge-fund veteran and Paradigm’s new team member, Enrique Abeyta.
“The positive outcome makes you feel better physically,” Enrique says, citing basic human physiology. “When this happens, you will likely buy more of the stock,” he says. “This buying enthusiasm is what helps power stocks higher.
“Let’s look at the earnings report for the past few years from the market’s biggest winner, Nvidia Corp. (NVDA)...
“The column labeled ‘%Surp’ (outlined in red) is how the company has performed relative to investor expectations for earnings per share (EPS).
“You can see that NVDA has recently been crushing expectations,” Enrique adds. “This has driven positive daily performance in the stock, which you can see in the next column titled ‘%Px Chg.’
“Not only has the company been beating numbers nicely, but it has also been doing so consistently.
“NVDA missed only one quarter in the last five years…
“These positive surprises — beating by a lot and consistently — create buying enthusiasm and higher stock prices,” says Enrique.
Earlier this week, he continues, “I spoke about the power of earnings growth to drive share prices higher. And it’s true that earnings growth is the most important single metric to push a stock higher.
“But if you can combine that with positive reporting surprises, you create a positive feedback loop that can create explosive returns!
“So if you’re looking to profit from emotional stock swings this earnings season, start by finding companies that consistently surprise,” Enrique says.
“There are other names in the semiconductor space that are also promising,” he says. “Advanced Micro Devices (AMD) reports on Tuesday ahead of the other big chipmakers.
“If the company and the rest of the semis provide positive surprises, they’ll likely continue higher in short order.”
Taking a look at the market today, the Nasdaq Composite Index has now exceeded its record-high close in July.
At the time of writing, the tech-heavy index is up 1.35% to 18,665. Simultaneously, the S&P 500 and the staid Dow are both in the green — up 0.75% (5,850) and 0.20% (42,455) respectively.
As for commodities, the price of oil has edged up 1% or just under $71 for a barrel of WTI. Precious metals? Gold is slightly in the green at $2,751.30 per ounce. But the lid’s off silver today, up 0.80% and over $34.
Checking on crypto: Bitcoin is up 0.50% to $68,450 while Ethereum’s up 0.75% to $2,550
The only major economic number to report comes from the U.S. Census Bureau. And for the second month in a row, orders for durable goods — anything designed to last longer than three years — were down 0.8% in September. That’s only slightly better compared with Wall Street’s expectations for a 1% drop.
A New-ish Frontier in Nuclear Energy
“I wonder if anyone is looking at using thorium instead of uranium?” a reader asked last week after we spotlighted Google’s nuclear foray — namely, adopting energy produced by small nuclear reactors (SMRs) sometime before the end of this decade.
Small modular reactors (SMRs) represent a new generation of nuclear technology. These compact reactors are designed for factory assembly, and can be transported to their operational sites, offering flexibility in deployment.
Source: International Atomic Energy Agency
Compare and contrast…
While several SMR designs exist, they employ various cooling methods. For instance, some utilize traditional light water as a coolant, while others explore alternative options such as gas, liquid metal or molten salt. This diversity in design reflects ongoing innovation in the field of nuclear energy.
But getting back to our reader’s question about thorium, we reached out to Paradigm’s expert geologist — and retired Navy officer — Byron King.
“The old U.S. Atomic Energy Commission pursued thorium ideas into the 1960s and early 1970s,” he says.
“Thorium never gained traction against uranium,basically because Navy nuclear drove the research, development and engineering,” says Byron. “[Adm. Hyman] Rickover wanted his submarines, and thorium would not work in those long steel tubes.
“Right now,” Byron adds, “China, India and Russia have aggressive (i.e., state-funded) thorium programs. The U.S. has whatever the junior companies can raise money to accomplish, which is small-scale.
“The U.S. nuclear industry will build what it knows how to build because that's what it can sell to investors and public utility commissions — meaning light-water reactors of traditional design, scale, etc.
“As for small nuclear reactors, that tech is sort of out there, but NOT perfected. Nothing available to manufacture at scale.
“The DOD is driving [this trend] though: Place a 40-foot container with SMR on a military base, and mitigate risk from the grid going down,” Byron forecasts.
So while thorium-based small modular reactors (SMRs) are not yet in commercial operation, there’s significant research and development underway.
[Of all things: British luxury-car company Rolls-Royce has reportedly developed a thorium-based SMR for the commercial shipping industry. Huh.]
As Byron concludes: “The nuclear tech of the next five–10 years is already out there. But considering the time [to] design, permit, engineer, build, test, commence ops — 10 years is blazingly fast.”
Questionable Brand Tricks
For a limited time, Goldfish crackers will be changing its name… to Chilean Sea Bass crackers?
Photo Courtesy: Pepperidge Farm Inc.
“Chilean Sea Bass is a playful nod to adults that the iconic fish-shaped snack is for grown-up tastes too,” says vice president of Goldfish, Danielle Brown.
To be clear, the cracker’s flavor profile is not that of Chilean sea bass (gross). But new flavors will drop, online only, every day through Oct. 30 at a very specific 9 a.m. EST.
But the only flavor we could give the thumbs-up to is the Goldfish Elf Maple Syrup Grahams. Sounds yummy (she says like a 3-year-old)...
Mailbag: From Japan, With Love
“Thanks for the informative newsletters,” a first-time contributor writes.
“I find Paradigm Press to be one of the few outlets that provide sensible, candid and no-BS-with-a-dash-of-humor reporting, which is becoming a luxury with the ultra-left MSM.
“I’m actually from Japan, and Bullet No. 5 in this week’s 5 Bullets really cracked me up. I was not expecting the smartphone blanket from Nitori to be picked up by you guys — as your newsletters are all about macroeconomic trends/analysis.
“I certainly think it’s a good idea to share a bit of interesting news from around the world.
“I truly appreciate the quality of your articles, although the volume of emails/offer letters is a bit too much. I hope you find a happy middle ground based on feedback from readers.”
Emily: Our new contributor is onto us…
Part of the 5 Bullets regular formula is to scare up quirky, offbeat items (see Goldfish above) for your amusement. Because who doesn't appreciate a good laugh now and then?
As for finding a “happy middle ground,” your input matters! As Dave mentioned earlier this week, we're excited about improvements coming your way, including reducing the number of emails you receive and offering transcripts for all sales presentations.
While we’ll always have products to offer, as publisher Matt Insley admonished in a Paradigm-wide email Thursday morning…
“Don't forget about our boss: the reader. Don't forget about our mission: publishing well-thought-out ideas that we're proud of.”
With the ultimate outcome being that you, reader, “are better off for it.”
