Dead Cat or Big Comeback?

📈 US stocks are either in a dead cat bounce or are about to experience the most epic comeback of all time.

March 10, 2025

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In this issue of the peel:

  • 📈 US stocks are either in a dead cat bounce or are about to experience the most epic comeback of all time.

  • ​​​💼 Jay Powell basically said, “Chill out, we got this,” and investors bought it.

  • 📉 Despite Friday’s glow-up, the S&P 500 and Nasdaq take their third straight L of the week. And it hurts.

Market Snapshot

Banana Bits

Elon Dreams, Mode Mobile Delivers

As Elon Musk said, “Apple used to really bring out products that would blow people’s minds.”

Thankfully, a new smartphone company is stepping up to deliver the mind-blowing moments we've been missing.

Turning smartphones from an expense into an income stream, Mode has helped users earn an eye-popping $325M+ and seen an astonishing 32,481% revenue growth rate over three years.

They’ve just been granted the stock ticker $MODE by the Nasdaq, and you can still make an investment in their pre-IPO offering.

Macro Monkey Says

The Robots Are Coming, and They Want Your Portfolio

If you’ve been keeping an eye on the markets, you’ve probably noticed the AI hype train pulling into the station. 

From automated trading to robo-advisors offering personalized financial advice, it seems like machines are starting to take over finance. But are we actually heading into a new financial era, or are we just getting played by some fancy buzzwords? Let’s dig in.

Robot Power: AI’s Big Market Entrance

  • Automated Trading: AI is now pulling the strings on a huge portion of trades in the market—fast transactions, no sleep, no coffee breaks. We have AI tools that use global data and social media to predict stock price movements. So yeah, we’ve got machines predicting market moves before we’ve even had our first cup of coffee. 

  • Robo-Advisors: These AI-driven financial advisors are creeping into the market, offering personalized investment advice without having to meet with a financial planner. Robo-advisors set a new record for users in the last quarter of 2024, and it’s mostly millennials and Gen Z who are ditching human interaction in favor of a more efficient (and less awkward) way to manage their wealth. 

But Wait… Can a Robot Really Outperform a Human?

  • Efficiency, But Not Always Smarter: Sure, AI can analyze market data 24/7 without needing a break, which is awesome, right? But here’s the twist: it’s not infallible. While it’s lightning fast, AI can miss key factors like global political risks that could make a market crash overnight. So, yeah, the robots crunch numbers, but can they predict if China suddenly decides to mess with trade deals? I’m not so sure. 

  • Bias Alert: Here’s where things get a little tricky. AI is only as good as the data it’s trained on. If biased or incomplete data gets fed, it might make some very bad recommendations. It’s like asking your sketchy friend for stock tips—they might be right sometimes, but don’t bet your retirement on them. 

The AI vs. Human Showdown

Can AI Beat the Pros? Despite all the hype, humans are still hanging in there. While AI models have performed well in certain areas, they still struggle when markets take a major dip.

During the past few weeks as markets unraveled, machines were left scratching their heads while the pros were trying to figure out how to stay ahead. If it can’t predict the next big market crash, maybe it’s not the holy grail we’ve been promised.

The Takeaway? 

Don’t hand your wallet to a robot just yet.

  • AI’s Cool, But Not Invincible: It’s efficient and gets the job done, but don’t think it’s some kind of magic investment machine.

  • Diversify, Baby: Mix your portfolio up. Don’t put all your eggs in the AI basket, or you might end up with nothing but a cracked shell.

  • Humans Still Matter: Sure, robots are useful, but they’re no match for the intuition and judgment that comes with years of market experience.

Career Corner

Question

How to be memorable at a networking event?

Answer

Try to find something personal to connect on. Networking does not equal just pitching yourself hard and only seeming to care about yourself.

Networking also means networking with everyone; don’t ignore those whom you don’t find relevant. The industry is s as you work into it over time and skill set mix and people end up in multiple places.

Head Mentor, WSO Academy

What’s Ripe

Gap Inc. (GAP) 18.8%

  • Gap’s earnings beat expectations, proving that even in a recession, people still need comfy jeans for Zoom calls.

  • The brand revamped its strategy, making sure to have the right inventory, so they didn’t end up with 10,000 ill-fitting cargo pants.

  • Investors are celebrating because, apparently, Gap’s recovery is as solid as a pair of their classic khakis.

e.l.f. Beauty (ELF) 9.7%

  • e.l.f. Beauty is the skincare stock everyone’s been putting on their “good for you” list—no, seriously, even hedge funds want a piece.

  • The brand’s glow-up is real: From budget-friendly skincare to hedge fund darling, e.l.f. ’s new motto is “buy now, moisturize later.”

  • Hedge funds are obsessed—guess they’re really into that “effortless beauty” look… and the stock gains.

What’s Rotten

Reddit (RDDT) 11.1%

  • Reddit’s stock tanked, proving that even meme stocks can have a bad day (or month).

  • Investors aren’t LOLing—apparently, the hype didn’t translate to solid earnings. Who knew?

  • Reddit might need a Reddit thread for stock advice because things are clearly not upvoting in their favor right now.

Samsara (IOT) 15.6%

  • Samsara’s stock hit a speed bump, but don’t worry, it’s still more about tracking fleets than cruising for a win.

  • Earnings were solid, though we’re still not sure if anyone’s rushing to add IoT to their smart home just yet.

  • Investors are plugged in, but they’re still waiting for Samsara to turn all that tech into real profits.

Thought Banana

TikTok Bidding War 

President Trump recently announced that his administration is engaged in discussions with four different groups regarding the potential sale of TikTok. 

This all stems from national security concerns, prompting legislation that would force ByteDance, TikTok’s parent company, to divest its US operations or face a potential ban. 

Background

In April 2024, Congress passed a bill mandating ByteDance to divest TikTok by January 19, 2025, due to apprehensions over data security and potential Chinese government influence. 

Well, that date came and went, and TikTok is still on my phone. That’s because Trump signed an executive order extending the deadline by 75 days, now set for April 5, 2025. 

This extension aims to provide ample time for a thorough and secure transition of TikTok’s US operations. 

Potential Buyers

Among the interested parties are:

  • Frank McCourt: The former owner of the Los Angeles Dodgers is leading a consortium aiming to acquire TikTok. His bid includes plans to revamp TikTok’s algorithm within the US and integrate a decentralized blockchain platform to enhance transparency and user control. Reddit co-founder Alexis Ohanian has joined McCourt’s bid as a strategic adviser, supporting the initiative to empower users and innovate the platform’s infrastructure.

  • Elon Musk and Larry Ellison: Both tech billionaires have expressed interest in acquiring TikTok, viewing it as a valuable addition to their portfolios. Their involvement underscores the platform’s potential and the competitive landscape of the bidding process.

  • Sovereign Wealth Fund: The administration is considering the establishment of a sovereign wealth fund to facilitate the acquisition, ensuring that the US government holds a significant stake in TikTok’s operations. This approach aims to address national security concerns by maintaining oversight over the platform’s activities.

National Security Concerns

The impetus for the sale arises from fears that TikTok’s data practices could pose national security risks, particularly regarding user data accessibility by the Chinese government. 

Legislative actions reflect bipartisan concern over the app’s potential for mass data collection and content manipulation. 

The administration’s efforts to divest TikTok’s US operations are part of a broader strategy to mitigate these risks while preserving the platform’s availability to American users. 

The Takeaway?

The ongoing discussions and bids for TikTok’s US operations highlight the complexity of balancing national security interests with the desire to maintain a popular digital platform. 

The involvement of high-profile figures and potential restructuring plans indicate a significant transformation for TikTok, should the sale proceed. The administration’s willingness to extend the sale deadline reflects a commitment to ensuring a thorough and secure transition.

The Big Question: As the April 5 deadline approaches, the critical question remains: Will the proposed sale adequately address national security concerns without disrupting the user experience that has made TikTok a cultural phenomenon? 

The outcome of these negotiations will set a precedent for how governments regulate and interact with global digital platforms in the interest of national security.

Banana Brain Teaser

Previous

When positive integer x is divided by positive integer y, the remainder is 9. If x/y = 96.12, what is the value of y?

Answer: 75

Today

If x(2x + 1) = 0 and (x + 1/2)(2x - 3) = 0, then x = ?

Send your guesses to [email protected]

❝

The big money is not in the buying or selling, but in the waiting.

Charlie Munger

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Happy Investing,
Chris, Vyom, Ankit & Patrick