Mining Sector Ideas

[bigworld]

gfp: Believe it or not I came up with the strategy all on my own. I know that in secular bear markets the volatility level goes way up. There are psychological reasons for it. A long prolonged Bear market happens in stages, with intermittent face ripping rallies. Look at this past 6 weeks. The S&P dropped 20% in a few days and has regained almost all of it in less than 5 weeks. That keeps the frogs in the pot. The next drop should bottom out at a lower low than we saw in early April. Then rebound to another lower high. And so on. I wanted a trading strategy that could benefit me in both directions if I timed it almost right. Now look at the one year chart on UVXY. Most of the time it hovers between $17 and $19. It can stay in this channel for months. Then a big spike comes around and it can double or even triple in a short period of time. So the key is your entry. If you buy it right, and have patience, and are willing to wait out some paper losses, you can wait for the next shoe to drop. Those ugly short term fear driven market drops usually don't last long. Less than a week. You can see the trading numbers and watch for when the panic selling and forced selling is over. Trading volumes drop significantly even as the indexes may still be dropping. That indicates that the drop momentum is subsiding. That's when you start scaling out of UVXY, maybe 20% at a time. Then you wait to confirm the VIX is heading back down. Then you go into SVIX. The VIX inevitably goes down. It never stays high for too long. This strategy can be followed over and over again because a secular bear market can last several years before we get to a final capitulation bottom. Those usually occur with a whimper. By that time all the bag holders have lost most of their capital as they repeatedly bought high and sold low during the process. And the market needs this to happen. It can't take all of the investors money in one fell swoop. Periodic rallies have to happen to give punters hope that they can regain their losses. The market gives them that false optimism which morphs into FOMO. They jump back in only to be crushed again. The average secular bear I believe loses 65% from all time high to capitulation low. A few secular bears have been worse. The 1929 Crash and the Dot.com bubble bursting are notable outliers that were worse from top to bottom. But even if we just drop the average amount it will wipe out 2/3 of the baby boomer pensions and savings in America. It could usher in another Depression.

[gfp927z]

Om, People are likely pulling back due to the recession fears, but with things stabilizing, Cape Cod should be inundated with tourists again soon :o)

Cape Cod seems like a great place. Also some interesting accents up there. I have a Phila accent, but the Boston / New England accent is even more distinctive. Speaking of strong accents -

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[ombowstring]

There are a whole lot of fewer tourists on the Cape this May than last May for whatever reason. And that's the indisputable fact, Jack.

[gfp927z]

Bigworld, Thanks. That's a very interesting strategy, and because you are trading both sides of the Vix / volatility, you can benefit in both up and down markets. And if the entry points are at / near the historic extreme ranges of the Vix, that puts the odds squarely in your favor.

Just curious where you came up with the idea of trading Vix / volatility? Have Rinear or others you follow been doing Vix related trades? Because the Vix has such extreme moves, if you get in anywhere near the top or bottom, and then patiently wait for the next big Vix spike (which always comes eventually), you can make good consistent money.

As you said, instead of trying to nail the exact top or bottom in the Vix, getting 'close enough' seems like a logical strategy. Looking at past bottoms, in late 2024 it was the 12-14 area (using $Vix). Last summer, the Vix bottom came around 11-12. The current $Vix is at 18, which suggests more upside to come for the stock market, but the $Vix bottom is approaching, so may be nearing the 'close enough' level.

I'll start following the Vix more closely, as a possible trading vehicle.



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[bigworld]

gfp: The CPI number came in OK. The Market should open green. The VIX has dropped below 18. This might cause some short covering by hedge funds that were heavily short. And once earning season is over the share buybacks can resume. I'm now thinking of selling SVIX once the VIX drops to 16. No use risking gains to pick up that last 5%.

[bigworld]

gfp: You ar way more active than I am. I have much fewer holdings. I have my core in precious metals, energy, and some basic raw materials. I rarely adjust that. I live with the ups and the downs because in a stagflationary environment hard assets are your best bet. I have a nice amount of high dividend plays like ENB and RIO. I have those in our ROTH IRAs so the dividends can come in tax free. I won't touch those accounts unless we have to. And I have my short term trading accounts where I place my SVIX and UVXY bets. Most of that are in IRAs. Some are in after tax accounts subject to income capital gains taxes. I have a higher % of money market cash in the non-IRA accounts just in case. And I have liquidity with my gold and silver holding through the Vaulted program. So I place relatively few trades compared to you. Less trades but bigger bets.

[bigworld]

gfp: First of all realize that the basis of my trading the VIX is my view, shared by many others, that we are in a secular bear market. A long term downtrend. And it happens to also be a 4th Turning Era. So I anticipate much higher than normal volatility. So my first thought is that over time the market is going to go down. All bubbles find a pin. It really doesn't matter what the pin is. It's going to happen. It's why Buffet has $370 billion in cash. It's what Mark Mobius is 85% in cash. It's why McAlvany has their clients 55% in cash. 80-90 of the time the market is going to be flat or rising. But in a secular bear market the trend is going to be down. But in the context of a secular bear there are also face ripping relief rallies that are sufficient to get investors back into stocks hoping to catch a bottom. Look at the Market action in the biggest secular bear of all time....1929-1940s. The total loss was over 80%, but there were several very strong rallies during those years. So trying to catch the waves is a well thought out plan I have developed. Once the VIX has dropped sufficiently it sets up the next leg of the bear market. Valuations got too high. Almost to record levels. The US Debt problem isn't going away. And we are not alone. The world owes over $300 Trillion in various forms of debt. In the month of April the US Treasury spent over $100 Billion on Interest payments alone. So there is going to be a worldwide meltdown at some point.

With UVXY you just want to buy at a reasonable price. The lower the VIX the better the price. Once you have the position you want you have to have nerves of steel. You might lose money (on paper) in the short term. But the volatility won't stay low for long. Not in this environment. I missed the last big market drop because I was in the Bahamas. Had I been in touch I would have made a killing on UVXY when the VIX basically tripled to go over 40. But once the market began to stabilize I knew that the VIX would eventually drop and that SVIX could earn me $4 or $5 a share. But I have my finger on the sell button, because I think we're setting up for another significant drop. If the VIX continues to drop it will make an entry into UVXY start to look appealing. Then I buy...and wait. For the inevitable.

[ombowstring]

Stock Markets Rally Out of Trump Tariff Slump. This Is the Next Catalyst.

The Barron's Daily

After a huge market rally on the back of the U.S.-China tariffs agreement, the pressure is already on for the next catalyst. It’s now up to President Donald Trump to deliver on his dealmaking reputation.

The S&P 500 is now 3% above its level before the April 2 “Liberation Day” tariff announcement. The “Buy America” trade is back, with the dollar strengthening and U.S. technology companies leading the stock rise.

However, it’s not clear the evidence supports the rally. The effective U.S. tariff rate stands at around 13% following the slashing of mutual levies with China—down from about 23% before the announcement, but still the highest level since 1941.

The Yale Budget Lab estimates tariffs are still set to cost the average household $2,300 a year. The “de minimis” loophole, which had allowed duty-free imports of goods valued under $800 from China, is still being effectively closed with a 54% tariff—a blow to Chinese retailers Temu and Shein, but also their American customers, often from less wealthy households.

In terms of the next stock market catalyst, there aren’t too many likely candidates. Russia and Ukraine seem a long way off reaching a long-term settlement, despite possible peace talks in Istanbul on Thursday. Meanwhile, the U.S.-China tariff truce means the Federal Reserve can probably continue to hold out on interest-rate cuts as it focuses on keeping inflation under control.

That means there’s pressure on for more trade deals, starting with Trump’s visit to the Middle East this week. If the market can’t get the certainty of no tariffs, then it will demand a constant flow of positive trade news in its stead. Over to you, Mr. President.

—Adam Clark

[ombowstring]

Yeah, I figured I would have had to do a lot of flying to become proficient and I didn't have that kind of time.

[gfp927z]

Om, >> safety of these flying machines <<

All aircraft have to be properly maintained, but the key to safe flying is the skill and judgement of the pilot. There is a small chance of an engine failure, etc, but very few situations where a highly skilled pilot can't get the airplane down in one piece. Engines are much more reliable than in the old days, but even an engine failure on takeoff can be dealt with if the pilot is skilled and experienced enough.

Prior to his aero engineering career, my dad had his own aerial spraying company in the Midwest, and did all the flying himself, flying a few feet over the crops, going under telephone wires, and over hilly terrain, etc. After 18 months of that every day, there is very little you can't do in an airplane.

One problem today is that pilots aren't routinely taught to do spins, recover from spins, etc. Back in the day, student pilots did these by the hundred as part of their standard training, so recovering from a spin was second nature. Engine failure on take off is the biggest risk in flying, or stalling the airplane at low altitude right after takeoff. You stall one wing and immediately go into a spin, with only seconds to correct it. In flying, you want to be 'high and fast' since it gives you lots of options. 'Low and slow' gives you very few.

Practicing spins and spin recoveries is essential, but today is rarely taught -

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[ombowstring]

Archer Aviation - Archer Announces First Quarter Results, Highlighting On-Track UAE Launch & New “Launch Edition” Customers

https://investors.archer.com/news/news-details/2025/Archer-Announces-First-Quarter-Results-Highlighting-On-Track-UAE-Launch--New-Launch-Edition-Customers/default.aspx

[ombowstring]

Archer Aviation - Q1'25 Shareholder Letter

https://s202.q4cdn.com/174276461/files/doc_financials/2025/q1/Archer-Shareholder-Letter-Q125-FINAL.pdf

[ombowstring]

Glad you had so much fun flying around to different places with your Dad. I've had the desire to fly, too, but never really have had the opportunity and, I have to admit, I've been apprehensive about going up there in a single engine plane not knowing that much about the safety of these flying machines. I really haven't been very interested in parachuting, either, because if the chute malfunctioned, that would be the death of me, obviously. But when flying cars become commonplace, like automobiles are now, I'm sure I'll want to fly one.

[gfp927z]

Om, >> Cessna Skylane 182 <<

This is what we had from 1968 to 1980 -- a great airplane for traveling, with long range 80 gal fuel tanks. We flew it all over the country, going from PA to the Mid West, Arizona, Montana, Rocky Mtns, Maine / New England, etc. Great plane. Later my dad got a Piper Cherokee, which was great for local use. The technology for the Joby and Archer didn't exist back then, but for short distances these should be great aircraft.

[gfp927z]

Om, Here's the aerobatic airplane that my dad was building before he bought a Cessna Skylane 182 (1968). The Pitts Special has been a mainstay at airshows for decades. You can now get them factory built, but 'back in the day' they were all homebuilt by aviation enthusiasts. My dad was an aeronautical engineer, and was hooked on flying after an airplane ride at age 4 :o)

[gfp927z]

Om, Here are those two Joby planes flying in formation -

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[gfp927z]

Bigworld, Well, I couldn't resist, so took some profits on the Flex side, bringing the overall stock allocation down to 15% from 18%. The yearly profits are adding up, but nothing like your monster gains from the SVIX and UVXY gambits :o)

I probably sold too early, but if tomorrow's CPI number comes in hot, the market could reverse, so --> 'Get it while you can' :o)

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[gfp927z]

Bigworld, I'd like to do more research on Oliver's momentum technique since it can apparently predict market turns well before they show up on the charts. He's been using his proprietary momentum indicators since 1992. His subscriptions are fairly expensive, but he seems to give out the market predictions in interviews, so a subscription may not be needed. In addition to the gold, silver, miners, he's getting momentum signals for the broader market, and he also mentioned the energy / oil sector having a possible momentum signal developing, although it's still early.

On the Vix front, you mentioned moving back into UVXY at some point. You've had several great Vix trades in a row, but don't get too cocky since -- 'pride comes before the fall', as they say. But that said, you do seem to have a good feel for the current market, and have made considerably better timing decisions than I have this year.

Expecting the market to peak out soon sounds plausible, but then seeing it descend to below the April lows doesn't seem too likely anytime soon, except -->

1) Economic / inflation numbers really go off the rails big time, significant recession hits, etc.

2) US bombs Iran scenario happens


#2 is not only possible, but likely imo. Trump presumably won't do it until the tariff debacle is sufficiently fixed, but by Summer / Fall who knows. There are US / Iran talks going on, but if these break down irreversibly, then Trump could then go the 'US bombs Iran' route to take out Iran's underground nuclear program. This could tank the stock market, but the drop might actually be short lived (?), and turn out to be a buying opportunity.

But transitioning back and forth between SVIX and UVXY seems like a very risky approach over the long term. Even the Wall St pros can't pull off market timing consistently, and using the most volatile vehicles will add to the risk. Anyway --> don't get too cocky :o)




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[gfp927z]

Bigworld, Nice going with the SVIX trade, you nailed it :o) Looking at the Vix itself ($VIX), it's back down to just under the 200 MA.

Now we'll see how far the current stock rally can get. A big near term factor should be the CPI number tomorrow. If that's favorable or benign, then the rally should continue, but if inflation spikes up then the stock rally gets a rude awakening. But having more tarrif deals on the way is a positive, so we'll see what happens.

Fwiw, I have the stock allocation at 18%, with 10% in Core (individual LT stocks), and 8% in Flex (S+P 500). I may start taking profits on the Flex side once the RSI reaches overbought --> 70 or more (currently 64).

But at least the China tariff nightmare appears to be under control, with other deals soon to come. Will keep fingers crossed. The big question now is how much damage has already been done to the economy / inflation, and how permanent or transitory will that be? Guess we'll find out..




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[bigworld]

gfp: It's certainly given a boost to stocks today. And the upward trend might extend a little while if they keep announcing trade deals. I'd like to see the VIX drop below 18 at least, preferably down to 16 before I dump all of my SVIX and start scaling back into UVXY. The VIX is at 19.15 as I write this, down 12.55% today. The bigger the rise the steeper the fall. The market wants to take the money from the most number of investors as it can. It can accomplish that by going through a sustained rally that sucks in the last of the retail investors that got scared in early April. Once fear subsides and FOMO kicks in, then complacency......that's the set up I want to see for the next big market drop to new lows.

[bigworld]

gfp: I tend to think along the same lines as he does. McAlvany agrees on a lot of his points as well, which is why they have their clients 55% in cash. As I accumulate dividend money I will be putting it into silver plays, either silver bullion through the Vaulted program, or Silver miners. I think Oliver indicated that if silver hits and overcomes the $35 level it would be a quadruple top and that silver should have a nice run after that. So I will take advantage of the temporary weakness in the metals and miners we're seeing this week. I may take some SVIX off the table. I'm up in the $37K range on that trade so far. I won't sell it all. Probably about 1/3rd for now. If we get a little follow through until the end of this session and if tomorrow doesn't bring us a pullback in the markets we could see a short covering squeeze because lots of hedge funds were net short. But this relief rally will not last that long in my opinion.

[ombowstring]

Joby Flies Two Aircraft Simultaneously in Testing Milestone

https://ir.jobyaviation.com/news-events/press-releases/detail/129/joby-flies-two-aircraft-simultaneously-in-testing-milestone

Joby Flies Two Aircraft Simultaneously in Testing Milestone

May 12, 2025 6:00am EDT

SANTA CRUZ, Calif.--(BUSINESS WIRE)-- Joby Aviation, Inc. (NYSE:JOBY), a company developing electric air taxis for commercial passenger service, today announced it has successfully flown two of its aircraft simultaneously for the first time, marking another important milestone in the Company’s flight testing program.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250512003438/en/

>>>>> The two-aircraft flight, completed in Marina, CA, on May 9, is a further demonstration of the maturity of Joby’s test program, and comes just two weeks after the Company announced it had reached another testing landmark, successfully completing flights with a full transition from vertical to cruise flight, and back again, with a pilot onboard.

Commenting on the milestone, JoeBen Bevirt, founder and CEO, said: “This achievement not only demonstrates Joby’s leadership in the sector, it’s another indication of the power of American innovation.

“Our air taxi is designed, manufactured and assembled here in the US, and we are a proudly American company, employing engineers and other experts across 40 different US states.

“With six aircraft in our test fleet, flying multiple aircraft at a time will play an important role in accelerating our certification testing and supporting our plans to carry our first passengers next year.”

Joby has partnered with Delta Air Lines and Uber to bring its service to the US and expects Los Angeles and New York City to be launch markets. Service is planned to start shortly after Joby receives type certification from the Federal Aviation Administration.

Outside the US, Joby recently announced a partnership with Virgin Atlantic to bring its service to the UK and has partnered with ANA Holdings Inc., Japan’s largest airline, to bring its service to Japan.

Joby’s Q1 2025 Shareholder Letter, published last week, celebrated a second consecutive quarter of record progress toward certifying its aircraft with the FAA and reiterated plans to start passenger operations in Dubai in early 2026.

Joby has completed more than 40,000 miles of test flights across multiple aircraft, including demonstration flights in New York City, Japan, and Korea. The sixth aircraft to join Joby’s flight test program is currently undergoing final functional checks, having been powered on for the first time last month. Two aircraft are positioned at Edwards Air Force Base where they are completing testing in conjunction with the Company’s defense customers.

Hi-resolution photos and video footage of the two aircraft in flight are available here.

About Joby

Joby Aviation, Inc. (NYSE:JOBY) is a California-based transportation company developing an all-electric, vertical take-off and landing air taxi which it intends to operate as part of a fast, quiet, and convenient service in cities around the world. To learn more, visit www.jobyaviation.com.

Forward Looking Statements

This release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the development and performance of our aircraft, the growth of our manufacturing capabilities, our regulatory outlook, progress and timing, and expected manufacturing and flight test capabilities and timing; plans and timing related to certification and operation of our aircraft; our business plan, objectives, goals and market opportunity; plans for, and potential benefits of, our strategic partnerships; and our current expectations relating to our business, financial condition, results of operations, prospects, capital needs and growth of our operations. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate”, “estimate”, “expect”, “project”, “plan”, “intend”, “believe”, “may”, “will”, “should”, “can have”, “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including: our ability to launch our air taxi service and the growth of the urban air mobility market generally; our ability to produce aircraft that meet our performance expectations in the volumes and on the timelines that we project; complexities related to obtaining certification and operating in foreign markets, including the need to negotiate additional definitive agreements related to such operations; the competitive environment in which we operate; our future capital needs; our ability to adequately protect and enforce our intellectual property rights; our ability to effectively respond to evolving regulations and standards relating to our aircraft; our reliance on third-party suppliers and service partners; uncertainties related to our estimates of the size of the market for our service and future revenue opportunities; and other important factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2025, our Quarterly Report on Form 10-Q, filed with the SEC on May 7, 2025, and in future filings and other reports we file with or furnish to the SEC. Any such forward-looking statements represent management’s estimates and beliefs as of the date of this shareholder letter. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.


View source version on businesswire.com: https://www.businesswire.com/news/home/20250512003438/en/

Investors:
[e-mail]

Media:
[e-mail]

Source: Joby Aviation, Inc.

Released May 12, 2025

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[ombowstring]

If I were to do anything here, I'll probably buy PPA. I don't think I could do a quality analysis of TDG or HEI to my satisfaction and at my age, a long-term holding means where is the stock going to be in five years. While I consider ACHR, JOBY, and NVDA longer-term, I'm thinking I'd probably sell when they reached a price I'd be happy with and then park the money in some sort of interest bearing instrument. If I came upon a shorter term possible rocket ship or moon shot, I could conceivably take a swing for the fences like that. I do have some stocks on my watchlist that could offer near term significant appreciation, but those ideas hinge upon certain developments that would need to happen. But it's the same thing with stocks as John Lennon sang in "Beautiful Boy" - "Life is what happens to you while you're busy making other plans." I just go with the flow basically and trust God to lead me in the way I should go as to all things. And this has worked well for me in my life. I'm more in tune with following His lead than ever before. It's great stuff when you get it going on like this.

[gfp927z]

The 100 to 1 ratio of gold to silver continues, with the current futures prices at 3285 and 32.81. Pretty amazing how that ratio has been holding. Bigworld posted this interview with Mike Oliver (below), who sees silver starting to catch up to gold soon -

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[gfp927z]

Currently the Nasdaq futures are through the 200 MA, and the S+P 500 is very close to its 200 MA, so a good sign for tomorrow. Once above the 200 MAs, I figure at best it takes a few re-tests to establish this as the new floor / support, but it sure beats having the market down 20% like it was last month.

The CPI data is on Tuesday, so that should be a key number. If the CPI is benign, I figure the markets can go cautiously higher based on tariff deals, unless / until key economic numbers start to go off the rails. That is probably inevitable at some point this summer (going off the rails), so I'll be looking to take some profits on the Flex side once the S+P 500 gets into overbought territory (RSI over 70). The RSI was 57 on Friday, and could be close to 60 tomorrow if the rally holds up. Then comes Tuesday's CPI, and a bad number and we're back under the 200 MA again, but a decent number and the cautious buoyancy can continue. So we'll see what happens :o)



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[gfp927z]

The week ahead - >>> Inflation data, trade talks in focus: What to watch this week


Yahoo Finance

by Hamza Shaban

May 11, 2025


https://finance.yahoo.com/news/inflation-data-trade-talks-in-focus-what-to-watch-this-week-141426449.html


Stocks ended last week slightly down after Federal Reserve Chair Jerome Powell reiterated the central bank's wait-and-see approach to interest rate policy and President Trump unveiled a trade deal between the US and UK.

All three major indexes finished last week in the red, as trade volatility moved stock charts. The S&P 500 (^GSPC) sank about 0.5%, while the Dow Jones Industrial Average (^DJI) slipped roughly 0.2% and the Nasdaq Composite (^IXIC) gave up about 0.3%.

The week ahead will bring a fresh update on inflation, with the release of the Consumer Price Index (CPI) on Tuesday, as well as the Producer Price Index (PPI) on Thursday. Retail sales will offer a read on the health of the American consumer. And investors will also be on the lookout for advancing trade deals, following a limited, bilateral pact with the UK.

China, the nation's third-largest trading partner, is also top of mind. US officials, including Treasury Secretary Scott Bessent huddled with Chinese officials this past weekend in Geneva, with the aim of de-escalating tensions and coming to some preliminary understanding. On Friday President Trump floated the idea of slashing China tariffs to 80%. Such an overture might invite Beijing to react with a tariff reduction of their own.

Inflation after 'Liberation Day'

New inflation data coming this week will offer investors the latest look at pricing pressures.

The readings carry significance because they will be among the first bits of "hard" economic data that captures, at least in part, the time period since Trump imposed heavy tariffs on the country's trading partners. Should the data show heightened pressures, it will bolster the case that the costs of a high-tariff regime are being born by American consumers, sapping their purchasing power. Producer prices can also offer a look at inflation before those costs hit consumers, revealing where prices are heading.

Analysts surveyed by Bloomberg expect the Consumer Price Index (CPI) to increase 0.3% for the month of April compared to the prior month. In March, headline prices fell from the prior month for the first time since 2020. On a "core" basis, which strips out the more volatile costs of food and gas, prices are expected to climb 0.3% over the prior month and 2.8% compared to the same period last year.

Fed officials wait and watch

The Federal Reserve will be watching inflation data alongside the rest of us.

Last week, policymakers at the central bank voted to keep rates where they are, citing the need for more data — and time — to understand the impacts of the tariffs, which are also still in flux.

Central bankers acknowledged that changes in trade policy have heightened risks to the US economy.

"My gut tells me that uncertainty about the path of the economy is extremely elevated, and that the downside risks have increased," Powell said during his press conference.

The Fed finds itself in a difficult position, facing the prospects of both a weakened labor market and steeper inflation that are likely to arise as a result of the tariffs.

On Friday, Federal Reserve governor Michael Barr and New York Fed president John Williams warned that that the tariffs are expected to lead to higher inflation, elevated unemployment, and slower economic growth this year.

That stagflationary cocktail is especially difficult to handle because of the tools the Fed has to maintain it. Lowering rates to boost growth and reach full employment may also invite elevated prices. Holding rates where they are, for a prolonged period of time, could help price stability but to the detriment of people's jobs.

For now the Fed is ready to wait. But Fed Chair Powell and his colleagues are aware that a tough economic scenario will require them to prioritize one or the other of its two mandates, full employment and price stability.

This week will also bring a healthy dose of Fedspeak, as at least nine Fed officials are scheduled to give talks in the days ahead, including Chair Powell, Federal Reserve Vice Chair Philip Jefferson, and Federal Reserve Governor Adriana Kugler.

Tesla's winning streak

Tesla is riding a wave of good fortune. Shares of the EV maker have climbed to their highest level since February as the company notched a third straight week of gains on upbeat trade developments.

As Yahoo Finance's Pras Subramanian reported, general sentiment on trade drove the latest climb as Trump floated a cut to US tariffs on Chinese imports ahead of the negotiations.

Tesla stock is up nearly 15% in the past three weeks, boosted by an earnings update highlighted by CEO Elon Musk signaling he planned to spend more time at the company as he transitions away from the Trump administration. But news for Tesla hasn't all been positive, as continued sales weakness plagued the company's European market.

For Tesla, like with Boeing last week, the prospects of a trade deal can serve as an important catalyst. Looking ahead, the dynamic negotiations placing Wall Street on a trade deal watch means investors are eager to learn what companies will be attached to potential deals or receive the benefits of relaxed tensions. Where there are trade deals, there will be trade winners.

Economic and earnings calendar

Monday

Economic data: No notable economic data set for release.

Earnings: Fox Corporation (FOXA), Monday.com (MNDY), Chegg (CHGG), Rigetti Computing (RGTI), Plug Power (PLUG), Hertz (HTZ), Topgolf Callaway (MODG)

Tuesday

Economic data: Consumer price index, month-over-month, April (+0.3% expected; -0.1% previously); Consumer price index, year-over-year, April (+2.4% expected; +2.4% previously); Core consumer price index, month-over-month, April (+0.3% expected; +0.1% previously); Core consumer price index, year-over-year, April (+2.8% expected; +2.8% previously)

Earnings: JD.com (JD), Sea Limited (SE), Honda (HMC), Under Armour (UAA, UA), On Holding (ONON), Nu Holdings (NU)

Wednesday

Economic data: MBA Mortgage applications, week of May 9 (+11% previously)

Earnings: Sony (SONY), Tencent (TCEHY), Cisco (CSCO), CoreWeave (CRWV), Jack in the Box (JACK)

Thursday

Economic data: Retail sales, April (+0% expected; +1.4% previously); Producer price index, month-over-month, April (+0.2% expected; -0.4% previously); Producer price index, year-over-year, April (+2.5% expected; +2.7% previously); Core producer price index, month-over-month, April (+0.3% expected; -0.1% previously); Core producer price index, year-over-year, April (+3.1% expected; +3.3% previously)month

Earnings: Walmart (WMT), Alibaba (BABA), Deere & Company (DE), Birkenstock (BIRK), NetEase (NTES), Applied Materials (AMAT), CAVA (CAVA), Take-Two Interactive (TTWO)

Friday

Economic data: Housing starts, April (+3.1% expected; -11.4% previously); Building permits, April (-1.2% expected; +0.5% previously); Imports prices, month-over-month, April (-0.4% expected; -0.1% previously); University of Michigan consumer sentiment, May, preliminary (53.1 expected; 52.2 previously)

Earnings: Flowers Foods (FLO)

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[gfp927z]

It looks like good news with the China tariff negotiations, with details coming tomorrow. Also deals with other countries could be announced in the next week or two. So we might be getting a 'tariff deal put' to provide some buoyancy to the market, at least for a while. Let's hope so..


>>> US, China reach deal to cut trade deficit, US officials say, details on Monday


Reuters

by Emma Farge and John Revill

5-11-25


https://www.msn.com/en-us/money/economy/us-china-reach-deal-to-cut-trade-deficit-us-officials-say-details-on-monday/ar-AA1EzdxL?ocid=TobArticle


GENEVA (Reuters) -U.S. Treasury Secretary Scott Bessent on Sunday reported "substantial progress" in U.S. talks with China's top economic officials to de-escalate a damaging trade war, but offered no details of an agreement reached as two days of negotiations wrapped up in Geneva.

Bessent told reporters that details would be announced on Monday and that U.S. President Donald Trump was fully aware of the results of the "productive talks."

U.S. Trade Representative Jamieson Greer, who participated in the talks with Bessent, Chinese Vice Premier He Lifeng and two Chinese vice ministers, described the conclusion as "a deal we struck with our Chinese partners" that will help reduce the $1.2 trillion U.S. global goods trade deficit.

"And this was, as the Secretary pointed out, a very constructive two days. It's important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought," Greer said, adding that the Chinese officials were "tough negotiators"

The meeting was the first face-to-face interaction between Bessent, Greer and He since the world's two largest economies imposed tariffs well above 100% on each other's goods.

Although Bessent has said the bilateral tariffs were too high and needed to come down in a de-escalation move, he did not offer any details of reductions agreed and took no questions from reporters.

Earlier, White House economic adviser Kevin Hassett said the Chinese were "very, very eager" to engage in discussions and rebalance trade relations with the United States.

Hassett also told Fox News that more foreign trade deals could be coming with other countries as soon as this week.

Overnight, Trump gave a positive reading of the talks, saying the two sides had negotiated "a total reset... in a friendly, but constructive, manner."

"A very good meeting today with China, in Switzerland. Many things discussed, much agreed to," Trump posted on his Truth Social platform.

"We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!," Trump added, without elaborating on the progress.

Speaking on "Sunday Morning Futures" on Fox News with Maria Bartiromo, Hassett said Beijing is eager to re-set trade relations with the United States.

"It looks like the Chinese are very, very eager to play ball and to re-normalize things," Hassett said.

Hassett also said more trade deal announcements could be imminent following last week's announcement of an agreement with the United Kingdom. He said he had been briefed by Commerce Secretary Howard Lutnick on two dozen pending deals in development with USTR Greer.

"They all look a little bit like the UK deal but each one is bespoke," Hassett said.

GATED VILLA

The negotiating teams met at the gated villa of Switzerland's U.N. ambassador, overlooking Lake Geneva in the leafy suburb of Cologny. Black Mercedes vans with sirens shuttled to and from the venue, which was bathed in bright sunshine.

Neutral Switzerland was chosen as the venue following approaches by Swiss politicians on recent visits to China and the United States.

Washington is seeking to reduce its $295 billion goods trade deficit with Beijing and persuade China to renounce what the United States says is a mercantilist economic model and contribute more to global consumption, a shift that would require politically sensitive domestic reforms.

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[gfp927z]

Bigworld, Thanks. I see Oliver uses proprietary momentum indicators that he developed ~ 1992 (link below). While he has a fairly expensive subscription service, he seems to share his market conclusions readily on You Tube.

https://www.olivermsa.com/about-msa.html

He points out that silver has lagged gold by a lot, and also the miners have lagged bullion. So some possibilities are -- 1) silver plays catch up, 2) gold comes back down, 3) both continue to rise together, or some variation. The gold chart really looks parabolic right now, and with the BRICS gold-linked currency now apparently on hold, I'm wondering whether gold may have peaked, at least in the near / mid term (?) The chart sure looks overextended, and ready for a pullback / consolidation.

But lots of other macro factors to consider. Even though the BRICS currency is on hold, it's possible the payment system they are building will have gold settlement of the periodic trade surpluses / deficits. So that would mean all participating countries would need a sizable quantity of gold available. Countries have been moving out of the dollar and into gold anyway, so that's another factor. Plus Trump's apparent desire to get the value of the US dollar lower should also help gold. Then there's the fact that London / NY have possibly lost the ability to suppress the gold price, due to the new dominance of the Shanghai Gold Exchange.

So lots of factors to consider. But some repositioning could make sense -- > from gold to silver, and from bullion to the mining stocks. But it sounds like Oliver also sees a serious drop in the stock market coming, and when that has happened in the past the miners usually get clobbered too, in the initial phase anyway. So who knows. I guess keeping all bases covered could make the most sense.

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[gfp927z]

Om, In the aerospace sector, here's a LT stock to consider - TransDigm (TDG). They have one of the nicest 10-15 year charts in the sector (trajectory and steadiness), and great numbers (margins, growth, etc). Heico (HEI) is another one, and Berkshire took a position last year, a pick by the new Berkshire guys (Weschler / Combs). I had some HEI in the past but the PE is high (over 60), so it seemed surprising that Berkshire took a position. I might still get a 1/2 position since everything else about the company looks good.
TDG and HEI are both diversified, with big commercial aviation exposure, so are not overly dependent upon the Defense Dept. The broad ETF is another idea - Invesco Aerospace + Defense ETF (PPA). These stocks aren't as exciting as Archer and Joby, but provide solid core holdings in the sector :o)


>>> TransDigm Group Incorporated (TDG) designs, produces, and supplies aircraft components in the United States and internationally.

The Power & Control segment offers mechanical/electro-mechanical actuators and controls, ignition systems and engine technology, specialized pumps and valves, power conditioning devices, specialized AC/DC electric motors and generators, batteries and chargers, databus and power controls, sensor products, switches and relay panels, hoists, winches and lifting devices, delivery systems and electronic components, and cargo loading and handling systems. This segment serves engine and power system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots.

The Airframe segment provides engineered latching and locking devices, engineered rods, engineered connectors and elastomer sealing solutions, cockpit security components and systems, cockpit displays, engineered audio, radio and antenna systems, lavatory components, seat belts and safety restraints, engineered and customized interior surfaces and related components, thermal protection and insulation products, lighting and control technology, parachutes, specialized flight, wind tunnel and jet engine testing services and equipment, and testing and instrumentation solutions. This segment serves airframe manufacturers, cabin system and subsystem suppliers, airlines, third party maintenance suppliers, military buying agencies, and repair depots.

The Non-aviation segment offers seat belts and safety restraints; mechanical/electromechanical actuators and controls; hydraulic/electromechanical actuators and fuel valves; refueling systems; and turbine controls. This segment serves off-road vehicle and subsystem suppliers, child restraint system suppliers, and satellite and space system suppliers; and manufacturers of heavy equipment.

TransDigm Group Incorporated was founded in 1993 and is based in Cleveland, Ohio.

<<<


https://finance.yahoo.com/quote/TDG/profile/



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[bigworld]

gfp: Listen to this video by Michael Oliver, who is a pretty good momentum analyst. He sees changes in momentum before they are reflected in the price action. Price follows momentum. His thesis is the markets are heading much lower after this relief rally. Gold will continue upward. Silver will do even better. And the mining stocks are overdue to catch up to the upward move in he metals. It's an hour but it's well worth the time:

https://www.google.com/search?q=michael+oliver&rlz=1C1GCEA_enUS949US949&oq=MICHAEL+OLIVER&gs_lcrp=EgZjaHJvbWUqDQgAEAAY4wIYsQMYgAQyDQgAEAAY4wIYsQMYgAQyCggBEC4YsQMYgAQyBwgCEAAYgAQyDQgDEC4YrwEYxwEYgAQyBwgEEAAYgAQyDQgFEC4YrwEYxwEYgAQyDQgGEC4YgwEYsQMYgAQyBwgHEAAYgAQyBwgIEAAYgAQyBwgJEAAYgATSAQk0NTg4ajBqMTWoAgiwAgHxBXkPlZlTQ2kX&sourceid=chrome&ie=UTF-8#fpstate=ive&vld=cid:bc4a833f,vid:j_i7lFp-CYw,st:0

[gfp927z]

Bigworld, Looking at the current bullish SVIX chart, it could be found in a chart pattern textbook under 'bullish setups'. Same with the SPY and QQQ -- bullish setups just waiting to get through key resistance and move higher. But even with favorable appearing charts, I figure the news flow will be the key. Will the meetings with China go well (?), will there be more tariff deals announced soon, will Trump utter something that renews the angst, etc?

Btw, I noticed SPY and QQQ both look somewhat more bullish than their actual indexes do. Both have nuzzled right up under the 200 MAs, while the actual indices are a little bit lower. Assuming the indices get through their 200 MAs next week, getting back to the all time highs could take a while. Even if the tariff threat receeds, enough damage has probably been done already to produce a recession. We already had one negative GDP quarter, and the numbers likely deteriorate for some time. So it's hard to see the markets zooming back to their old highs anytime soon.



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[gfp927z]

Silver_bars, >> extending maturities and lowering coupons on Treasuries held abroad <<

That sounds like the 'Mar-a-Lago Accords' idea. Trump's Treasury Sec in the first term (Mnuchin) was also talking about 50 and 100 year Treasury bonds, dollar devaluation, etc, but now this is being discussed again.

Jim Rickards had an article on the topic (link below). His explanation of some of the features was very brief and not fully explained, but he concluded that - "the Mar-a-Lago Accord as it’s envisioned today would cause a global financial crisis."

We have enough trouble getting countries to buy 10-20 year US debt now, how can we expect them to go 100 years?


>>> Trump and the Fate of the Dollar <<<

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=176175312



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[ombowstring]

Prediction: Nvidia Stock Will Soar After May 28

https://finance.yahoo.com/news/prediction-nvidia-stock-soar-may-110000711.html

[gfp927z]

Amazing ingenuity -

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[ombowstring]

Flying machines (especially flying cars) will become mainstream and prices will come down way below $100,000. But for us older guys, it'll probably be in our next lifetimes that we use them.

Ehang is a Chinese company that is very similar to Joby and Archer -

https://finance.yahoo.com/quote/EH/profile/

[gfp927z]

Bigworld, It looks like Buffett / Berkshire are getting closer to being net buyers of stocks again (see below). 2024 was the big net selling year, but so far this year they are only slightly net negative. Buffett hasn't been buying back Berkshire shares either (for 3 quarters), but to do share buybacks he reportedly likes to see the Price / Book ratio under 1.2, but it's currently 1.69 (as of Mar 31).


Q4 2022: $14.64 billion in net-equity sales

Q1 2023: $10.41 billion
Q2 2023: $7.981 billion
Q3 2023: $5.253 billion
Q4 2023: $0.525 billion

Q1 2024: $17.281 billion
Q2 2024: $75.536 billion
Q3 2024: $34.592 billion
Q4 2024: $6.713 billion

Q1 2025: $1.494 billion

__________________________




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[gfp927z]

As fun as these experimental aircraft look, flying is a very unforgiving pastime. Chuck Yeager summed up flight testing experimental aircraft as 'one more way to bust your butt' -

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[gfp927z]

Om, That is super cool. The FAA considers it a recreational vehicle, so apparently no pilot's license or formal training is needed. It comes out of Europe (Poland / Italy), and costs around $100 K range. Eight rotors, and they say it can remain in flight even if a motor / rotor is lost. 20 miniute flying time, and ~ 1 hour to recharge. Max speed 63 mph, and max altitude 1500 feet, so not meant for overly mountainous areas.


Jetson One -

https://en.wikipedia.org/wiki/Jetson_One#:~:text=ONEs%20in%202024.-,Specifications,(101%20km%2Fh).

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[bigworld]

gfp: Two high profile investors are highly committed to cash right now....Warren Buffet of course. And Mark Mobius, who was an understudy of Sir John Templeton, recently announced he was 95% in cash right now. I am hoping for a short rally once a few more trade deals get announced. But I know that future gains are going to be fleeting. We got very little follow through from the announcement about the trade deal with the UK. A deal with China and/or India would be a greater boost to the markets if they were to occur. I had hope that we'd get a sustained low voltage rally through the summer to get the VIX down below 20. The lower the VIX gets the more powerful the next pull back will be. It's still stubbornly above 22 right now. I would like to see more complacency, more retail investors piling into the market due to FOMO. There is still a lot of caution out there. The biggest market drops happen in an environment of optimism and complacency. We haven't gotten there yet. My gut is telling me to hold SVIX over the weekend in hopes that China and the US tone down the trade war. Trump is already talking about reducing the China tariffs preemptively to set a conciliatory tone. Some progress, even without a complete deal, would be a boost to the market. So I am being vigilant. If we get some award movement in stocks next week and the VIX dips somewhat then I'd be inclined to ring the register on SVIX and then start figuring a good entry point to start building a position in UVXY. I don't think the market is going to hold on until fall. My guess is a significant drop begins by the end of May. "Sell in May and go away."

[ombowstring]

Stocks are at a risk of a drop of nearly 20%, says Goldman Sachs. Here’s the trigger.

Recession is a big risk for this market, says the bank

S&P 500 futures have risen about 18% since diving to an intra-session low on April 7. A couple more decent days and they’ll be registering a bull market again.

Traders clearly reckon the stock market overacted a month ago to the potential damage the Trump trade war may cause. Trump’s 90-day pause on his “reciprocal” tariff plan was a significant help in that regard.

But Goldman Sachs remains concerned.

The bank’s chief political economist Alec Phillips has just warned that the U.S President’s comments surrounding the trade deal with the U.K. suggest many countries ultimately will face notably higher tariffs than they did before Trump’s re-election.

And in a podcast published on Thursday entitled, “On the precipice of another dip?” Goldman’s chief economist Jan Hatzius and chief global equity strategist Peter Oppenheimer appeared notably cautious.

Hatzius reiterated that he sees a 45% chance of a U.S. recession in the next 12 months. He acknowledges that data of late has been mixed with weak soft data, like sentiment surveys, but better hard data, such as the latest payrolls numbers.

That can be reconciled because history shows hard data lags, usually by 60-days or so, he notes, though this time the lag may be longer because much trade commerce was brought forward to beat tariffs. Still, there is “a very significant risk of a recession,” says Hatzius.

With the Federal Reserve being forced to wait and see if the tariffs deliver a one-off price bump or more sustained inflationary pressure, it may only be triggered into easing policy when the labor market has already started to deteriorate. A recession may then see the Fed deliver 200 basis points of rate cuts from here, according to Hatzius.

Oppenheimer says the recent strong rebound for stocks came as traders welcomed Trump’s pullback from his initial punitive tariffs; cheered earnings that have been “reasonably decent”; and saw retail investors strongly buying the dip.

However, Oppenheimer notes that first-quarter earnings don’t cover the period since the tariff turmoil kicked in.

“If the hard data begins to deteriorate, particularly the U.S. labor market, I think the market will put a much more significant weight on a potential recession, and the market could well fall back from these levels, and that would be our central view,” says Oppenheimer.

“Bear in mind the U.S. market is back to a PE [price to earnings multiple] of 20…so it’s not particularly cheap,” he adds. A 10% fall in earnings in a typical recession may cause the market also to be valued on a lower than average PE, taking the S&P 500 SPX down to 4,600, he says.

The pressure on U.S. stocks will be exacerbated by foreign investors reducing their exposure to Wall Street as the advantages of American big tech companies are whittled away, and the market narrows the record wide valuation differentials that have for 15-years been benefiting the U.S. The U.S accounts for a record 70% of global stock market valuation and that is likely to fall.

The good news is that Oppenheimer does not think we are facing a structural bear market, which is often preceded by massive asset bubbles and private sector imbalances, such as Japan in the late 1980s, and the financial crisis around 2007/8. Such bear markets tend to be much deeper, with falls of around 60% and take place over a longer period than, say, an event-driven bear market, like we have just witnessed.

Nevertheless, Oppenheimer stresses that there is an asymmetric risk to the downside for stocks in the short term.

[ombowstring]

https://jetson.com/

[ombowstring]

The new Pope, Leo XIV, seems like a down to earth, rational regular guy who understands things with a definitely American perspective.

https://www.theguardian.com/world/live/2025/may/09/pope-leo-xiv-to-hold-first-mass-pontiff-catholics-celebrate-live

Pope laments 'technology, money, success, power or pleasure' valued over Christianity

During the Italian language section of his homily, Pope Leo XIV has lamented that there are many places where “technology, money, success, power or pleasure” are valued over Christian faith, which he warned, in many places, was “considered absurd, meant for the weak and unintelligent.”

The new pope said “believers are mocked, opposed, despised or at best tolerated and pitied”.

He said that often the figure of Jesus is “reduced only to a kind of charismatic leader or superman,” and warned that this was not just among non-believers, but even among the baptised, who he said ended up living their lives in “de facto atheism”.

[ombowstring]

Serious, dangerous stuff, that is.

[ombowstring]

Thanks for sharing that. Yeah, it's coming. It's already here. It's a no-brainer.

I would compare the Jetson ONE to the Model T. Now we have Corvettes.

[silver_bars]

According to Jeff Gundlach, Scott Bessent discussed extending maturities and lowering coupons on Treasuries held abroad. This is tantamount to a default......

According to Jeff Gundlach, Scott Bessent discussed extending maturities and lowering coupons on Treasuries held abroad. This is tantamount to a default. The fact that a sitting U.S. Treasury Secretary is speaking publicly about default should cause foreigners to dump Treasuries.

— Peter Schiff (@PeterSchiff) May 7, 2025

[gfp927z]

Om, Speaking of the Jetsons, check this out -

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[ombowstring]

Well of course there's uncertainty as to whether or not Archer will succeed. There's uncertainty about just about every stock as to whether it will go up or down in the future. We've already gone over many of the main factors to consider about Archer and Joby and I'm inclined to think that both companies will succeed. But with the uncertainty about stocks in general at this time, I'm inclined not to buy more shares in these companies at this time.

But using my imagination a bit, I think the reality of flying cars as per the Jetsons cartoon series will actually come to pass at some time in the future after Archer and Joby first demonstrate this capability. The roads are getting too crowded. It's just mind-boggling to think that so many people spend so much time commuting to work 5 days a week, some an hour and a half each way 5 days a week, some people commute shorter distances and some longer, but I know commuting to Boston or New York or what have you and spending 15 or 20 hours a week in my car to get to work is something I wouldn't do.

[gfp927z]

>>> Joby Aviation Inc (JOBY) Q1 2025 Earnings Call Highlights: Record Progress and Strategic ...


GuruFocus News

May 8, 2025


https://finance.yahoo.com/news/joby-aviation-inc-joby-q1-073817532.html


For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Joby Aviation Inc (NYSE:JOBY) achieved record progress on certification, advancing 12% on the FAA side and reaching 62% completion on the Joby side.

The company successfully conducted pilot-on-board transition flights, marking a significant technological achievement in aerospace.

Joby Aviation Inc (NYSE:JOBY) announced a partnership with Virgin Atlantic to bring air taxi services to the UK, expanding its market presence.

The company is on track to start flight testing in Dubai and begin TIA flights with the FAA within 12 months.

Joby Aviation Inc (NYSE:JOBY) is expanding its manufacturing capabilities with a new facility in Marina, doubling its manufacturing footprint.

Negative Points

Joby Aviation Inc (NYSE:JOBY) reported a net loss of $82 million for Q1 2025, reflecting higher operating expenses.

The company faces challenges in scaling manufacturing and achieving mass production, which requires significant investment and time.

There are uncertainties and risks associated with the certification process, which could impact timelines and operations.

Joby Aviation Inc (NYSE:JOBY) needs to navigate complex regulatory environments in multiple countries for international expansion.

The company is operating in a nascent industry with evolving market dynamics, which could pose challenges in demand forecasting and strategic planning.

Q & A Highlights

Q: What is the timing for the full-scale aircraft with fully conforming parts, and when will they be ready? A: (CEO) All our aircraft, including the five from the pre-production line, are full-scale and have similar operating specifications. We are on track to have FAA-conforming aircraft in the air later this year, preparing for TIA flight testing. The progress in manufacturing and certification is promising.

Q: What is the expected timeline for the expanded manufacturing site in Marina and initial production in Dayton? A: (CEO) We are doubling the footprint in Marina, and the facility is ahead of schedule. The Ohio facility is progressing well, with retrofits and equipment installations underway. We expect parts to start coming out of this facility in the coming months.

Q: Can you elaborate on your flight test goals for this year, including expectations around flight testing in Dubai? A: (CEO) We have made significant progress with failure injection testing and pilot-on-board transition flights. We plan to send an aircraft to Dubai for hot weather testing and qualification for service launch. We are also preparing for TIA flights with the FAA and setting up a full-motion flight simulator for pilot training.

Q: What needs to happen from a testing perspective to transition from flying with a pilot on board to flying with passengers in the UAE? A: (CEO) The critical piece is the component and system-level testing of FAA-conforming test articles. Approved test plans allow us to build and test these articles, unlocking TIA flight testing. We are working with the GCAA to ensure comfort with the testing rigor before flying passengers.

Q: How are you balancing near-term cash flow, long-term margin, and market share priorities? A: (Executive Chairman) We have three paths to market: direct sales, partnerships, and direct consumer operations. Each has different economic characteristics, and we aim to preserve flexibility to allocate aircraft between these options. This flexibility allows us to adapt to market conditions and prioritize accordingly.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

<<<



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[gfp927z]

>>> Should You Buy Archer Aviation Before It Reaches This Huge Goal or After?


by Reuben Gregg Brewer

Motley Fool

May 4, 2025


https://finance.yahoo.com/news/buy-archer-aviation-reaches-huge-075500390.html


Key Points

Archer Aviation is attempting to build an air taxi business based on its vertical lift short-haul aircraft.

The company hopes to carry its first commercial passenger in 2025.

Buying before that first flight requires a glass-half-full point of view.


Archer Aviation (NYSE: ACHR) has big plans for 2025. The key goal is for the company's aircraft to carry its first commercial customer. It will be an important turning point for the business, which up until that event will have only been in the testing phase. Is it a good idea to buy Archer Aviation before it reaches this important goal, or should investors wait until after?

What does Archer Aviation do?

Archer Aviation is an upstart aerospace company trying to break into an industry that is capital-intensive, heavily regulated, and highly competitive. The company has achieved a great deal so far, in that it has taken a good idea and developed a factory that is producing aircraft. Sure, 2025 will only see around 10 of the company's Midnight aircraft built, but that shouldn't diminish the achievement, since production levels have to start somewhere.

What's interesting about Archer Aviation's Midnight aircraft is that they are small, vertical lift vehicles meant only to travel short distances. Essentially, they are air taxis. The hope is that Archer Aviation can set up services in and around large cities serving customers that want to fly over street-level congestion.

To that end, Archer Aviation is working toward getting FAA approval of its aircraft. It already has FAA approval to operate an airline and to operate a flight training school. All it needs is the aircraft, since it already has an agreement in place to start an air taxi service in California.

The big news in 2025 isn't happening in the United States

That's all great news, showing that Archer Aviation is putting the puzzle pieces together now so it can take off when the FAA approves its Midnight aircraft for operation in the U.S. market. But the United States isn't likely to be the first market in which Archer Aviation's aircraft are operating. The first market is likely to be Abu Dhabi.

This is where the company is currently working with a partner to set up an air taxi service. The service is likely to carry its first commercial customers in 2025. When that happens, Archer Aviation will have taken its business from a good idea all the way to a proven concept. Buying the stock today will get you in the door before that happens. There's a high likelihood that investors will take a more positive view of the stock once its Midnight aircraft is carrying commercial customers.

There's just one caveat, and it's a big one. Carrying commercial customers isn't really the end goal. It will be a big achievement, for sure, but it's only the start of the commercial test of the air taxi concept. Just because Archer Aviation builds an air taxi doesn't mean there will be enough customers who want to use it to make the company sustainably profitable. This is why more conservative investors might want to hold off on buying Archer Aviation.

To be fair, holding off may result in missed stock gains if the air taxi concept takes off. But it will save investors sleepless nights and protect against the risk that Archer Aviation is building a product that people don't really want. If Archer Aviation's air taxi service gains traction, there will likely be years of growth ahead to benefit from, even if you miss an early share price rally.

Archer Aviation is a high-risk investment

Archer Aviation has an interesting idea that still needs to be proven out in the real world. It has achieved a great deal so far, but there is still a long way to go before the business is sustainably profitable. Buying now, before the first air taxi service using Archer Aviation's aircraft is launched, is a high-risk move that requires a glass-half-full point of view. Waiting until there is proof of a sustainable business model is a more prudent decision that will be a better choice for most investors.

<<<



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[gfp927z]

Bigworld, Thanks for the updates. It looks like things could be looking up with the trade deals, etc. The anticipation of more deals to come should help the markets.

Btw, I upped the stock allocation to 16% from 12%, so hopefully the rebound continues. I now have the 'Core' at 9% (buy / hold), and the Flex at 7%, I figure a 10% Core might be the right LT stock exposure, all things considered, so am getting close to that. The rest (Flex) can be traded (S+P 500), so seems like a good balance.



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