Bullseye explores, celebrates and invests in American Ingenuity, managing a portfolio of 35-50 publicly-traded US equities with significant runway for growth. These are dynamic, US companies propelling the world forward across multiple industries. Frequent focus sectors include Energy, Health and Technology. Every pick shares three defining attributes: great story, compelling data, newsy catalyst.
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Adam Johnson

Adam Johnson anchored several business programs at Bloomberg Television over five years, interviewing CEOs, heads of state, and Nobel laureates. His daily video investment blog, Insight and Action was sponsored by a major U.S. lender. Previously he managed global risk assets for ING Furman Selz and Louis Dreyfus, trading oil futures, listed equities and equity options. Adam began his career at Merrill Lynch with a degree in economics at Princeton.


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Reset and Reiterate

Buying My Biotech Blowup

  • Uterine fibroids and endometriosis affect one-third of all women at some point during their lives
  • No comprehensive treatment solutions currently exist for these conditions, creating high unmet need
  • The one company involved in four pivotal trials falls on an unrelated data and I’m buying

Steadfast in My Conviction – One of my top picks in the biotechnology sector fell 65% last week, and I am reiterating why I am buying more. In short, the disappointing IVF trial results which prompted the selloff are much less important than upcoming data from four pivotal trials addressing health conditions which effect one-third of all women… and for which there is no comprehensive treatment currently. If any one of these trials produces compelling data, the company will immediately initiate a New Drug Application (NDA) with the Food and Drug Administration, and I expect the stock to rally significantly. Ultimately, I believe there is legitimate potential for the company’s unique approach to become the de facto standard in women’s health, quite possibly attracting buyout interest from large cap pharma.


November 15, 2019

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Ebay for the One Percent

Preeminence in Pre-Owned

  • Sales of personal luxury goods totaled $294B in 2018 and could reach $400B by 2025 based current tends
  • The total addressable market for the resale of these luxury items is $200B according to Frost & Sullivan
  • One company leads global sales of authenticated, pre-owned items, enabling 9.4M transactions since 2011

Treasure Hunt – Costco has brilliantly elevated run-of-the-mill shopping into treasure hunting jaunts everyone can appreciate. You stroll into aisle four expecting to grab paper towels, and instead you find gold bangles the week of Valentine’s Day. Return on a rainy Saturday in July, and you might get free ice cream for the kids. Creating these kinds delightful customer experiences turns shoppers into evangelists, and increasingly, it’s what determines success or failure in a highly competitive sector. One such purveyor of pre-owned luxury items IPO’d in June, and while I initially thought I’d go short, I’ve instead become a fan. The company is so thoughtful about how it merchandises products and interacts with customers, that I cannot help but feel kinship… and I’m not even in their demo! Most of all, theirs is an extremely high margin business with significant repeat traffic and fierce customer loyalty. I rarely venture into retail, but this company is unique, and it’s a great example of American Ingenuity.


November 15, 2019

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Is Hedging Worth It?

Portfolio Put Protection

  • The 24% YTD return for the S&P 500 Index marks the strongest year since 2013 and the 3rd best since 2000
  • Investors have withdrawn $120B from equity funds through October on concerns the market has peaked
  • Volatility (VIX) has fallen to levels consistent with previous equity tops, prompting some to hedge exposure

Bears invariably sound smarter than bulls. They speak in sober tones. They stand for capital preservation. They educate us about what could go wrong… and sometimes they are right. I have been a consistent bull since last December’s selloff, arguing for buying on dips given my belief that we WILL get a trade deal and we WILL NOT get recession. I stand by my thesis, and I also recognize that markets can correct 5-10% during any given week. When the next downdraft happens, bears will tell us it marks the beginning of the end… as they did during each of the three selloffs since March. I will probably say the opposite, but I cannot ignore how many of my picks are fast approaching their targets. Stocks have had quite a run, and buying puts tactically in this environment may make sense, especially with the VIX as low as it is. That makes the cost of hedging relatively cheap. In this note I try to separate fact from fiction, fear from prudence, and consider whether hedging now makes sense.


November 15, 2019

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7.4

As in total containerized freight imports arriving at US ports fell 7.4% in October, with Chinese imports down 19% according to S&P Global.
#WorldNeedsTradeDeal

85

As in the US will account for 85% of the increase in global oil production through 2035, based on projections from the International Energy Agency.
#Shale

3,000,000,000

As in Nvidia’s graphics processors can perform three trillion calculations per second, more than any other chip in the world.
#AmericanKnowHow

 

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“My ideal investing is stuff that looks a little crazy now and in 3-5 years is obvious.”
– Reed Hoffman, Co-Founder LinkedIn.
#AmericanIngenuity

“Developers are still spending too much time dealing with low-level infrastructure tasks instead of building the algorithms and writing the code to transform our business.”
– John Roese, CTO for Dell speaking at the annual Dell Tech Summit.
#Let’ErRip

“If your motivation were to promote economic activity in rural America, 5G is where you would start. There’s a lot of us, and we’re not just clustered in one location.”
– Small business owner Jay Warmke of Philo Ohio quoted in the WSJ.
#Preach