It’s Friday… So it’s mailbag day here at The Daily Cut.
This is where you put your questions to Teeka Tiwari, Nomi Prins, Jeff Brown, and the rest of the Legacy Research team. And we publish their responses.
Today, master trader Jeff Clark shows what it takes to become a successful options trader…
Former Wall Street insider Nomi Prins tackles a reader’s doubts about America’s switch to clean energy…
And our tech expert, Jeff Brown, weighs in on whether artificial intelligence (“AI”) will make traffic jams a thing of the past.
Let’s dive in with that question for Jeff Clark…
If you don’t know him, he’s been a professional trader for more than 30 years. He used to manage money for celebrities, entrepreneurs, and tech moguls in Silicon Valley.
And he personally made enough to retire at age 42.
But Jeff’s passion is the markets. So he now shares his trading knowhow and recommendations with subscribers of his Delta Report trading advisory.
As I’ve been showing you, Jeff has racked up some of his biggest gains when stocks have been nosediving.
Remember, traders can profit whether stocks are rising or falling. And all the extra volatility that comes with a bear market amplifies their gains.
And Jeff has a message for folks whose portfolios are deep in the red right now…
If you’re feeling hopeless this year, don’t be.
When it comes to bear markets, it’s not all doom and gloom.
The trading opportunities can be plentiful, fast, and frequent. They can be hugely profitable too.
This Jeff reader wants to know more…
Reader question: Hi, Jeff. Thanks for the wonderful trading advice this year, as well as the great sense of humor and in-depth technical analysis! Both entertaining and profitable. I’ve done well following your trades this year and look forward to what’s next in the years ahead.
Do you have any recommendations on what specific steps/process/system I should learn to become a trader full-time?
Jeff’s response: Hi, Nicholas. Thanks for your question. I’ve been trading full-time for over 30 years. It’s the most exciting career I could ever imagine. But like any other profession, it has its challenges.
You can bust your tail for 10 hours and leave the office with less money than when you started. But trading is the only career I can think of where you can earn a month’s worth of income in an hour.
The swings can be wild at times. So it’s important to understand your own emotions and how they influence your trading.
But the No. 1 attribute of a successful trader is being able to do nothing for several days at a time. The ability to wait for the right trade to set up is a key. And that’s harder than you think.
It is remarkably difficult to stare at a computer screen for hours a day, waiting for a setup. It’s like wandering through the desert in search of water. Eventually, you start seeing mirages. And you start making trades you shouldn’t make.
So, my suggestion to you is this…
Take a weeklong vacation. Spend a set amount of time in front of your computer every day. Watch the action. But don’t make any trades. Instead, note the trades you’d like to make. Write down your entry price and your exit price. Then calculate your profit or loss on each one.
At the end of the week, tally up the profits and losses on each of your trades. And ask yourself if it was worth it. Would you have made money? Or would you have gotten killed?
It’s not the same as trading with your hard-earned cash. But like the prospective pilot who crashes time after time in the flight simulator, this exercise will tell you whether this is the career for you.
On the other hand, if you can spend a week of your vacation time staring at your computer screen watching the markets… and still be excited about it… then you just may have found your calling.
To keep up to date with the latest from Jeff, you can subscribe to his free trading e-letter, Market Minute.
Next up a question for colleague Nomi Prins.
If you don’t know her already, she’s an investigative journalist, best-selling author, and former global investment banker.
And she’s been showing her readers why one of the most profitable investment trends of the next decade and beyond will be the transition from fossil fuels to clean energy.
That includes the electrification of cars and trucks.
But with rising demand, will our current electricity infrastructure be able to cope? Reader Charles P. is doubtful…
Reader question: Considering the bullish case you made for electricity, why haven’t you provided insight as to where or how all this juice will come from?
You say we’ll drive our future via electricity. But what of the industry and infrastructure we have today? Can we expect them to meet the meteoric rise in demand and distribution?
– Charles P.
Nomi’s response: Hi, Charles. Thanks for your email. You bring up a good point. We desperately need to upgrade our grids and the rest of our power infrastructure prepare for the energy transition.
The $1 trillion Bipartisan Infrastructure Act, which President Biden signed into law last November, addresses this. It’s promised $65 billion towards upgrading the U.S.’ power infrastructure. The landscape of that includes new transmission lines to help expand clean energy’s reach across the country. Plus another $7.5 billion to build out a national network of electric vehicle chargers.
The almost $740 billion Inflation Reduction Act of 2022 also has provisions to address these crucial needs. It dedicates $369 billion to energy security and clean energy solutions. That includes increased manufacturing across solar, wind, nuclear, and hydrogen power. It also aims to slash gas emissions by about 40% in less than a decade by investing in clean energy technologies.
These new laws focus on direct investment in the electricity industry. They also give generous tax incentives to utility companies for the upgrades needed to meet the increased demand.
And it’s not just the government pouring in money. Private power companies are also investing heavily in this.
Take Amazon. It’s the largest corporate investor in renewable energy. It has of 310 renewable energy projects across 19 countries.
Google, meanwhile, has invested $3.5 billion in renewable energy projects.
The transition to what I call New Energy will take time. Building out our wind, solar, and nuclear capacity will be one part of it. But upgrading our power infrastructure will also be key.
Fossil fuel-based energy companies won’t disappear overnight. These power sources have a vital role to play in meeting our energy needs. And we’ll need these fuel sources to build the infrastructure we need to ultimately transition to cleaner fuel sources.
We’ve got both government funding and private investor money flowing into the sector to move that transition forward. So it won’t be long before the infrastructure buildout catches up. And it makes the New Energy trend a massive moneymaking opportunity… especially for investors who get in early.
To wrap up today, we turn to colleague and former Silicon Valley insider Jeff Brown.
Every weekday at his daily tech investing e-letter, The Bleeding Edge, he shares his expert insights into the technology that’s reshaping the world.
One of the profit themes he’s been tracking is the rise of AI.
Reader Jerry H. has been wondering if we’ll be able to harness the power of AI to say goodbye to traffic jams for good…
Reader question: Jeff, as I’ve been sitting in traffic recently, I’ve been thinking about AI. I’m not sure this is an AI thing. But if anyone knows, it’s you!
If we could connect all our traffic signals onto one platform controlled by an AI, it seems to me like we could more efficiently move traffic through our cities.
How many millions of gallons of gas could it save? Not to mention helping to move emergency vehicles around faster and track vehicles that may be fleeing from authorities.
Any possibilities here?
– Jerry H.
Jeff’s response: I really enjoyed this question, Jerry. Traffic is a problem that anyone can relate to. And your instinct is spot on. This is an issue that AI is uniquely qualified to solve.
Humans program today’s traffic systems based on known traffic patterns. There are sensors under the pavement in many places that send traffic data to traffic lights. But these are largely not intelligent systems.
AIs can take in real-time data and figure out the best course of action. And we can design AIs with a specific goal in mind. In this case, it would be improving traffic flows.
As readers of my AI-powered trading service, Neural Net Profits, know, a neural network is capable of processing massive amounts of data.
The neural network can spot patterns in this data that humans – even teams of humans – can’t see. And we already have evidence of the benefits this will deliver if we apply it to cutting traffic congestion.
In 2017, a team at Carnegie Mellon University deployed AI-powered traffic lights in a limited area in Pittsburgh. The results were remarkable.
The new system delivered…
25% drop in travel times
40% drop in idle times
21% drop in emissions
AIs will also power self-driving cars and trucks. This will lead to even more gains in the fight against traffic.
When most cars on the road are self-driving, cars can travel closer together. This improves aerodynamics by reducing drag, which also reduces fuel consumption. And it would avoid the stops and starts typical of traffic jams.
Furthermore, this kind of AI could end almost all road traffic deaths. After all, 94% of all accidents are caused by human error.
Intelligent traffic control infrastructure, along with autonomous driving, would be transformational.
That’s all for this week’s mailbag.
Don’t forget, if you have a question for anyone on the Legacy team, be sure to send it to [email protected]
Have a great weekend.
Editor, The Daily Cut